political perspective The Future of Bay County's Affordable Housing by: Brandi DeRuiter, VP of Governmental Affairs, Bay County Chamber of Commerce
Affordable Housing Funds
was of poor quality and dilapidated. In 1937, the U.S. Housing Act
munity’s needs. These issues present themselves when incomes
addressed housing needs of low-income people through public
are not great enough to afford the ever-increasing price of hous-
housing providing significant improvements in living conditions.
ing. Housing issues, although longstanding and widespread, are increasingly complex to solve. In 1992, the Florida legislature enacted the William E. Sadowski Act. The Sadowski Act was brilliantly designed to alleviate just that and bridge the affordable housing gap. Sadowski funds are for vulnerable populations, such as the frail elderly and persons with disabilities; first time homebuyers; and low-income persons. Unfortunately, this fund is targeted by the legislature almost annually, diverting millions to the state’s general fund. What began out of need during the recession has become routine. In the last legislative session, $125 million of the trust fund’s $332 million was transferred into general revenue, bringing the total up to around $2 billion over the last 10 years.
Federal Beginnings Housing programs have grown and shifted based on changing economic, social, cultural, and political landscapes of the times. The programs and agencies that led to the establishment of the federal department, now known as Housing and Urban Development
6
Much of the nation’s housing stock for poor families during this era
Affordable housing is often top of mind when asked of our com-
Unfortunately, over time, the cost of operating public housing exceeded the revenue from rents collected. Incentives for existing housing were found to be less expensive than new construction, triggering subsidies to be shifted to rental assistance, block grants and low-income housing tax credits. This shift provided state and local governments with greater access to federal resources to fund local housing and community development priorities. Typically, local communities have better knowledge about how to provide housing, and can do so more efficiently. From the late 1980s through the 1990s, Congress acknowledged the value of local control and gave more decision-making authority over housing policy to state and local governments through the creation of block grants and tax credits. The Brooke Amendment, enacted by Congress in 1969, set a limitation on the percentage of income a public housing resident could be expected to pay in rent. The original figure of 25% was later raised to the 30% standard that exists today.
(HUD), began in the early 1930s with construction and finance pro-
State Beginnings and the Sadowski Fund
grams meant to alleviate some of the housing hardships caused by
The Florida Housing Finance Corporation was created in 1985 and
the Great Depression.
originally accessed only federal resources to finance housing. To
BAY B I Z / S P R I N G 2020
