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Poor take a big hit in state's
raid of 'trust funds'
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January 13, 2009
TALLAHASSEE - With Florida near the top nationally in lost construction
jobs and home foreclosures, state lawmakers are taking a $190 million
bite out of a pot of money intended to build low-rent apartments and
moderately priced homes.
More than half of the $2.6 billion in budget savings legislators
scraped together for a final vote Wednesday comes from borrowing and
sweeping up money that's sitting in "trust funds," accounts dedicated
to a variety of state projects and policies.
Some $70 million will be taken from a fund intended to fight insurance
fraud and support the state fire marshal; state conservation land buys
will be frozen until at least July 1; $6 million will be diverted from
radios for law enforcement.
Florida's affordable-housing trust fund -- created in 1992 to generate
annual money for low-income housing and named for the late legislator
William Sadowski -- stands to take the biggest whack: $190 million.
Lawmakers aren't just taking the money to help offset the $2.3 billon
budget deficit. They also mandate the cut has to come from construction
projects -- leaving untouched millions of dollars the Florida Housing
Finance Corp. gives out as block grants to local governments and
down-payment help on homes.
The fight over the housing dollars pitted Realtors laboring to sell
vacant and foreclosed homes against home builders desperate to
jump-start new projects.
"We have a market full of built houses that no one is living in," said
Senate economic-development budget chief Mike Fasano, R-New Port Richey.
Affordable--housing advocates say the policy forces the state to
abandon contracts it has inked with apartment developers and hits the
lowest end of the income spectrum: those who can't qualify to buy homes
even in Florida's depressed housing market.
"They've got the notion that because there's a lot of foreclosures,
they don't need to build any more affordable housing," said Mark
Hendrickson, a Tallahassee-based affordable-housing consultant whose
clients include Hillsborough County. "What possible good is a $400,000
foreclosed house to someone making $25,000 a year?"
Florida's housing agency had committed to spend $391 million this year
on programs that range from construction to helping farm workers and
the extremely poor with rent, to providing down-payment and mortgage
assistance to workers close to the state's median income level.
Since the budget forces the agency to cut the construction spending
first, housing experts expect virtually all of the $131 million pledged
to developers through its apartment loan program will be on the
Lloyd Boggio, a Miami developer and chairman of the state's Coalition
of Affordable Housing Providers, said builders anticipating those state
dollars had committed at least $115 million in financing on 36
projects, totaling 4,000 units, in 17 counties.
In a letter to Florida Housing Corporation executive director Steve
Auger, he called the funding raid "wrongheaded, shortsighted,
dishonorable, and arguably illegal."
In Orange County, at least three projects, totaling 298 units, could be
delayed, along with 90-plus-unit projects in Lake and Seminole
counties. However, officials said Monday that the state had yet to
determine which projects would lose their funds.
Besides the apartment projects, another 80 deals to construct 6,000
rental units through two other state programs could be at risk, housing
Florida Housing Finance Corp. spokeswoman Cecka Rose Green said the
cuts were "unprecedented in amount, and we're still looking at how
we'll do this."
Fasano and his House counterparts also steered another $24 million away
from apartment construction and into a program that helps local
governments assist would-be homeowners with down payments.
Fasano defended the action Monday by saying some of the money for
apartment projects had been committed for several years and builders
still hadn't lined up underwriting to start construction.
"I've asked many of them, 'When do you think you'll get underwriting?'
They can't give me an answer," he said.
"The strategy was to put as many dollars in an area where we can get
the biggest bang out of the taxpayers' money."
Senate Ways and Means Chairman J.D. Alexander, R-Lake Wales, conceded
Monday that the result was "not perfect policy" but defended lawmakers'
"We've got a glut of housing in Florida, and we want to look at
reshaping the policy to help people stay in their homes or use existing
housing stock rather than building new housing stock," he said.
However, Florida Housing Coalition president Jaimie Ross said reneging
on contracts could scare away builders from doing business with the
state in the future.
"There's going to be an immediate economic detriment," she said, "but
the damage may be longer."