With the Florida House and Senate both scheduled to debate the future of the Affordable Housing Trust Fund on Wednesday, Florida Realtors are urging lawmakers not to divert hundreds of millions of dollars from the trust, and the Realtors say, lawmakers should not make the sweeps permanent in future years. Lawmakers want to sweep about $200 million in affordable housing funds this year toward environmental infrastructure projects, and are considering a permanent reduction in the amount of money available in the trust in future years.
According to data from the Sadowski Housing Coalition, Florida currently has 344,000 low income families awaiting assistance from the fund.
The Florida legislature has regularly relied on similar “trust fund sweeps” to divert cash from dedicated revenue sources like the Affordable Housing Trust in order to fund other projects. It’s a controversial practice that has resulted in a growing backlog of low-income families awaiting help. Many of those families are police officers and firefighters who live and work in communities with a significantly higher cost of living than other parts of the state. The Affordable Housing Trust Fund helps those families make down payments which lower their borrowing costs.
Using the pandemic’s impact on the state budget as justification, lawmakers initially proposed sweeping as much as two-thirds of the Housing Trust, or about $282 million, to use for environmental infrastructure projects. But as realtors and low-income housing advocates ratcheted up the pressure in recent weeks, Senate President Wilton Simpson and House Speaker Chris Sprowls pushed for a compromise that would only take about half the funds from the trust.
However, part of the compromise still includes an ominous provision that would establish an automatic sweep of about 50 percent of the trust fund in future years, absolving future lawmakers from any criticism for diverting the funds.
While Florida Realtors say they understand the motivation behind the proposed sweep, they’re especially unhappy with the provision in the proposed bill that would make the sweep automatic and permanent every year.
“We appreciate the good intentions behind this proposal,” said Mike Artelli, Public Policy Chair of Florida Realtors. “But we have significant concerns over the permanent nature of these changes.”
The trust is funded specifically using tax collections when real estate is bought and sold, which serves as a direct linkage between the cost of housing and the money available to help low-income families.
“The hotter the real estate market, the higher the doc stamp collections. There is never more money in the trust funds than what is needed (by low income families),” a Florida Realtor briefing document points out. “The higher the cost of housing, the more subsidy is needed to help Florida’s workforce and those living on fixed incomes find housing.”
In short, Realtors say, every dollar currently in the fund is needed by low-income families to address the rising cost of living in Florida. And making the sweeps automatic and permanent would only make matters worse.
While lawmakers point to the pandemic as justification to sweep funds out of the trust, the Sadowski Housing Coalition says the pandemic has actually made housing less affordable. Fewer builders are constructing new homes, and more people are staying put, meaning fewer houses are on the real estate market.
“Home prices and rents are high,” said the Coalition in briefing document prepared for lawmakers. “There is a severe shortage available for Florida’s workforce.”
The trust was created nearly 30 years ago, as Florida Realtors worked with members of the Legislature to the documentary stamp tax mechanism “to create a dedicated funding source for Florida’s growing affordable housing needs,” says Cheryl Lambert, 2021 president of Florida Realtors® and broker-owner with Only Way Realty Citrus in Inverness. “We did this because we saw the escalating problem and we wanted to be part of the solution. The issue has only intensified as our population has grown, and diverting hundreds of millions of dollars away from these critical programs will make the situation worse.”
“Hard-working Floridians like teachers, firefighters, nurses and other essential workers consistently rely on these funds to secure stable housing and achieve the American dream of homeownership,” says Lambert. “Permanently reducing the amount of funds available to help them, especially given the turbulent times we find ourselves in, only hurts those who have been helping us the most during this unprecedented pandemic.”
With recent state revenue estimates revised up by over $2 billion more than anticipated, combined with billions more in federal funding expected in the near future, Florida Realtors say they plan to continue to advocate that the public housing trust funds be used for their intended purpose: public housing.