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A quarter-century ago, Florida lawmakers had the foresight to establish a trust fund to help the state meet its growing demand for affordable housing.
Over the last 16 years, though, legislators have betrayed that trust by using the money for purposes other than what it was intended — while the supply of affordable housing has continued to lag.
In 1992, the Legislature increased the state tax on real estate transactions and funneled those additional revenues into the Sadowski State and Local Housing Trust Fund. It subsidizes building affordable housing and helps low- income people pay rent or make a down payment on a home.
GateHouse Media’s Zac Anderson reports that between 1992 and 2001 all of the trust fund money went toward affordable housing programs. Since 2001, $2.2 billion has been diverted from the fund for other, non-related expenditures, including $182 million removed from the fund in the 2018-19 budget.
The state agency that administers the affordable housing programs estimates that those missing funds through last year would have helped subsidize an additional 166,746 housing units in Florida — nearly 2 percent of the state’s total housing.
That’s the direct loss. Then there are the indirect effects — the federal funds available for affordable housing that don’t materialize because there’s less state money to supplement.
The impact is felt statewide, including in Marion County. The area is experiencing a housing boom, with thousands of new homes being built or planned in new developments. Many of these residences will sell for more than $200,000. At the same time, the community is suffering from a shortage of affordable housing to accommodate low-wage employees of the service industry that powers the economy.
Last year, according to the Joint Center for Housing Studies for Harvard University, 47 percent of renters in Ocala/Marion County are burdened by a combination of too-low wages and high rents. That’s about 18,000 households in our community.
If the lack of affordable housing persists in our community and state, it could adversely affect economic development. Businesses will find it increasingly difficult to maintain work staffs if their employees can’t afford to live here. If the workforce shrinks because fewer people can afford even a decent apartment, then fewer businesses will invest in this area.
Obviously, paying higher wages would address one end of the problem; Marion County’s median wage, while improving, consistently lags behind the state average. But the other end requires making housing more affordable by increasing its stock. It becomes a simple equation of supply and demand setting the price. When something is scarce, it costs more.
Hiking the minimum wage by a substantial amount artificially inflates the cost of labor, which can have deleterious economic effects that include reducing the employment opportunities of those it seeks to help most. It also would be politically difficult to achieve in Florida.
The state has a much easier and clearer path to making housing more affordable and more plentiful. It doesn’t require calling for new taxes or additional spending. The means to accomplish this already exist. All it requires is for lawmakers to rededicate themselves to using the Sadowski Trust for what it was intended — as a helping hand for low-income Floridians trying to make ends meet, or start careers or families, and not as a pot of free money to be used to avoid making hard choices in other areas of the budget.
Article last accessed on May 31, 2018 here. A print-ready PDF is available here.