Using money that annually accrues in the state’s Sadowski Affordable Housing Trust Fund for affordable housing programs rather than partially sweeping them into the general fund was among Gov. Ron DeSantis’ budget priorities.
“Everyone understands that the circumstances have changed,” DeSantis said Monday. “We could see an economic downturn (was anticipated), but we could not forecast the economy simply stopping for a time. None of us is going to get what we want.”
In cutting more than $1 billion from the budget, which goes into effect July 1st, the governor slashed affordable housing spending by $242 million to $145 million.
Despite eliminating nearly two-thirds of the affordable housing appropriation, DeSantis said the state’s affordable housing programs still will be better funded next fiscal year than this year because of federal assistance from the Coronavirus Aid, Relief and Economic Security (CARES) Act approved by Congress in March.
Florida received $250 million last week for state rental and mortgage assistance programs from the CARES Act.
DeSantis said he was certain the state could use the $250 million in federal money to supplant the $242 million budget cut.
“Any economic hardship now will be tied to this pandemic,” he said. “So with the $250 million in CARES money, you end up with having more money (for affordable housing) than what was actually in the budget.”
The state will earmark all but $10 million to help Floridians who have lost their jobs or business incomes during the COVID-19 emergency with rent or mortgage payments.
The state’s Rental Assistance for Affordable Housing Tenants fund, managed by the Florida Housing Finance Corporation (FHFC), will receive $120 million in short-term rental assistance for households affected by the COVID-19 emergency; more than 2.4 million Floridians have lost jobs or been furloughed since March.
Using this money, FHFC will reimburse participating multifamily properties with rental assistance for April through December for households that have lost jobs or income.
The budget adopted by lawmakers in March included $387 million in funding for the Sadowski Affordable Housing Trust Fund. DeSantis and the Senate prevailed over the House, which had budgeted $144 million in its proposed spending plan.
The budget allocated $267 million to the State Housing Initiatives Partnership (SHIP) program and $120 million for the affordable apartments program.
The Sadowski fund was created in 1992 to leverage private and federal funding for affordable and workforce housing. Its 10-cent surcharge for every $100 paid on real estate transactions was doubled to 20 cents in 1995. This year, it is projected to generate nearly $400 million.
During the early 2000s housing boom, trust fund revenues grew and legislators began diverting millions from the fund for other purposes. A 2018 Senate Community Affairs Committee analysis determined lawmakers had swept more than $2 billion from the fund since 2001 to plug budget holes and provide tax relief.
Last year, lawmakers swept $240 million of the fund’s $332 million, including $115 million for Hurricane Michael recovery.
In 2018, Sadowski money financed the state’s $400 million response to the Marjory Stoneman Douglas High School shooting.