Use revenue available from Florida’s smart source
December 21, 2014 | Sarasota Herald-Tribune
The combination of low wages and high housing costs creates a financial struggle for many Floridians. To the state’s credit, though, it had the foresight, 22 years ago, to create an effective tool for boosting the supply of affordable housing.
That tool is known as the Sadowski housing trust funds: a pool of money to be used throughout the state to finance or subsidize construction, renovation or purchase of homes and apartments in a price range geared toward everyday workers — the kind we all depend on. The funds also help to create and preserve housing for the elderly, the disabled and the homeless.
As a tool for carrying out constructive public policy, the Sadowski funds — named after the late legislator William Sadowski — are ingenious. The money comes from a slice of the documentary stamp tax on real estate transactions. That levy was increased a smidgen in 1992 to bring in revenue for the state’s affordable housing trust funds. The increase was agreed to by builders and real-estate interests, who recognized that the money would be plowed back into their industries and the Florida economy — a win for everyone.
The documentary-stamp approach has another advantage: Its revenues rise during times of high real-estate values — when there is the greatest need to fund more affordable housing.
Money has been shifted
But starting about a decade ago, the political consensus that created the Sadowski tool eroded. State lawmakers restricted the trust-fund revenue or shifted it to other purposes during the recession.
As a result, the financing of affordable housing suffered. Hundreds of millions of dollars, which could have enabled a substantial increase in moderately priced housing for hard-pressed Floridians, went toward other causes.
This year, some of the housing allocations have been restored, because the recovering economy has improved state government’s budget outlook. There also was some funding assistance provided from the national banking settlement on mortgage misdeeds. But much more funding is needed. Rental rates have risen faster than wages, and — except for a brief time at the nadir of the real estate crash — a home purchase remains out of reach for many average-wage workers.
As the region witnessed during the housing bubble, a shortage of affordable units can inhibit job growth and worsen homelessness, which brings on a host of other challenges that are costly from both a financial and human perspective.
Make a commitment
With its widening affordability gap, Florida has more reason than ever to fully utilize the Sadowski trust funds.
Accessed at: http://www.heraldtribune.com/article/20141221/OPINION/312219996/-1/www.wellyee.com?Title=Editorial-Fund-affordable-housing on December 22, 2014
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