Ocala Star Tribune | January 5, 2015
This articles was reprinted in Leesburg Daily Commerical on January 23, 2015
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, renovations or the purchase of homes and apartments in a price range geared toward everyday workers. 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.
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, went toward other causes.
This past 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 a home purchase remains out of reach for many average-wage workers.
With its widening affordability gap, Florida has more reason than ever to fully utilize the Sadowski trust funds.
Rather than allocating just a portion of the funds, as they did this past year, lawmakers and the governor should strive this year to put all or most of an estimated $245 million to its proper use: financing housing and apartments for mid- to low-income Floridians. The commitment should be sustained over the long term.
There’s really no good reason for political foot-dragging, because the Sadowski funds are fiscally responsible. They’re neither Democratic nor Republican, and they’re a smart, effective, accountable way to serve important state needs and grow the economy. They have the capability to produce over 12,000 units of affordable housing a year.
To be sure, the Sadowski funds cannot single-handedly solve the affordable housing problem. They are meant to be loans used in tandem with other sources of funding.
Nearly 1 million Floridians are reported to spend more than 50 percent of their wages on housing — far over the recommended maximum of 30 percent. They and the state economy can be helped if lawmakers utilize the tool so well designed for this purpose: the full Sadowski trust funds.
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