A view of debris in front of Lori Jones and Kim Kenney’s tent at Castaways RV Park at Father Tony Way & Avenue C in Big Pine Key. Hurricane Irma has led to an affordable housing crisis in the Keys.
Hurricanes Irma and Maria decimated housing stock in the Florida Keys, left hundreds homeless and brought thousands more to Florida from Puerto Rico, but those hoping to use the money the state has set aside to construct affordable housing are going to face a battle again this year. The Florida House says it’s not a priority.
Anyone who purchases real estate in Florida pays a documentary stamp tax on the transaction, a portion of which is earmarked for trust funds to develop affordable housing. This year, the trust funds will collect about $322 million.
For the 11th consecutive year, Republican leaders in the Florida House have decided to sweep more than half of the money collected out of the trust funds and use it to plug budget holes and fund other priorities — a total of $182 million.
The Senate, which has traditionally gone along with trust fund sweeps, has had a change of heart this year. Its budget proposal not only spends all the money intended for affordable housing, it is also moving SB 874 by Sarasota Republican Rep. Kathleen Passidomo that would ban future legislatures from steering the housing funds to other needs.
“We’ve all heard from advocates in our community, from the housing industry and from Realtors and others who are addressing this issue, that it is important to maintain a sufficient amount of money to keep these programs going,” said Senate President Joe Negron, R-Stuart.
Negron said a priority are programs aimed at senior citizens, people with disabilities and people in “urgent housing situations” such as the Puerto Rican evacuees.
House Speaker Richard Corcoran, R-Land O’Lakes, argues that the Legislature has the final authority to write the budget and just because money was earmarked for a specific purposes doesn’t mean it will get spent there. He defends the House’s decision as a statement of the House’s priorities.
“It’s a tight budget year and, as we do every year, it’s just a prioritization,” Corcoran said. He said education is the chamber’s top priority and, with increases in costs and population, the budget includes $1.5 billion just to meet those needs.
“We’ve got to fund our law enforcement. We’ve got to fund our K-12 system. The Senate’s putting a great emphasis on funding the higher educational system,” he said.
More than 25 years ago, Florida leaders saw that as wages in Florida were not keeping up with its population growth there was an increasing demand for low-income housing. They put a 10-cent surcharge (per $100 paid) on every real estate transaction and directed the money into the William E. Sadowski Affordable Housing Trust Funds to go into state and local housing programs. Three years later, they steered another 10 cents of the tax into the funds.
The funds were designed to leverage private and federal funding to help develop affordable housing for the workforce, the elderly and disabled. But by the housing boom of 2000, monies in the trust fund for affordable housing soared and then-Gov. Jeb Bush and legislators decided the industry couldn’t use it fast enough. They began diverting millions from the trust fund to other purposes, from tax breaks to spending.
According to an analysis by the Senate Committee on Community Affairs, since legislators first started steering money from the housing trust fund to other uses in 2001, the state has swept more than $2 billion into the general revenue account to help it plug budget holes and finance tax relief.
Housing advocates now say that is short-sighted planning. They point to data that show that even before the hurricane, Florida faced a housing crisis for many middle- and low-income families.
The Shimberg Center at the University of Florida reports that in 2015, 744,662 low-income renters paid more than 40 percent of their earnings for housing — a 35 percent increase from 2005. According to the 2017 Home Matters report by the Florida Housing Coalition, a non-profit housing advocacy group, 31 percent of all home owners in Florida and 18 percent of all renters spend more than 50 percent of their income on housing — a significant cost burden.
Florida has the third highest population of homeless of any state, the report also notes, and Florida’s rental stock is particularly stressed.
Rep. John Cortes, a Kissimmee Democrat, said that in his Central Florida district the low wages of the hospitality industry make it difficult for people to afford the security deposit to rent an apartment, which he said includes first, last and current month rents and can mean a couple thousand dollars, so many people live paycheck to paycheck in extended-stay hotels.
“If you have to have $5,000 to rent an apartment for a job that pays $8.25, it’s not going to happen,” he said.
This year, draft budgets from the House and Senate allocate money through the State Apartment Incentive loan program, funded by the Sadowski trust fund, to counties that have sustained hurricane damage. The Senate directs $90 million to the programs and proposes another $10 million for the Monroe County Land authority for housing redevelopment.
“I don’t want to be lectured by the other side, saying there’s no money, when the definition of fiscal irresponsibility is sweeping $1 billion and breaking a promise that we made to Floridians,” Shaw told reporters this week. “Let’s finally stop pretending that affordable housing is not an issue in Florida.”