Panama City News Herald

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.

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.

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 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, but it hits especially hard in growing communities with expensive development
plans. 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.

If that gap persists, 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, 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. 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.

This editorial first appeared in the Daytona New Journal, a News Herald sister paper with GateHouse Media.

Article last accessed on May 31, 2018 here. A print-ready PDF is available here.