The Florida Housing Coalition (FHC), an NLIHC State Coalition Partner, and advocates across the state won a major budget victory with passage of the 2015-2016 General Appropriations Act on June 19. The budget appropriates $175 million for Florida’s Sadowski Trust Funds, including $105 million for the State Housing Initiatives Partnership (SHIP) program and $48 million for the State Apartment Incentive Loan (SAIL) program. The appropriation also includes $22 million to fund other existing programs administered by the Florida Housing Finance Corporation (FHFC).
SHIP and SAIL are capitalized through funding established by the William E. Sadowski Affordable Housing Act, enacted in 1992. The Sadowski Act created a dedicated source of revenue for affordable housing programs by setting aside 16.19% of the documentary stamp tax paid on all real estate transactions. Revenue from the documentary stamp tax must be appropriated by the Florida legislature, and the affordable housing set-aside must be directed into two housing trust funds: the Local Government Housing Trust Fund (LGHTF) and the State Housing Trust Fund (SHTF). Collectively, the LGHTF and SHTF are known as the Sadowski Trust Funds. The LGHTF funds SHIP program, and the SHTF funds the FHFC, which administers the SAIL program.
SHIP, administered through a network of county-level trust funds, provides funds to local governments to serve as an incentive to create partnerships that produce and preserve affordable homeownership and multifamily housing. A minimum of 30% of SHIP funds are reserved for households with income at or below 50% of the area median income (AMI).
SAIL, administered by the FHFC, provides low-interest loans for affordable multifamily developments, with a minimum of 20% of the units set aside for households with income at or below 50% of AMI. When federal Low Income Housing Tax Credits are used in conjunction with SAIL, a minimum of 40% of the units are set aside for residents with income at or below 60% of AMI.
Passage of a ballot measure in November 2014, known as Amendment 1, complicated efforts to obtain adequate funding for the Sadowski Trust Funds in this year’s budget. Amendment 1, which passed with a 75% majority, directed the Florida legislature to set up a 20-year funding pool for land and water conservation using 33% of the documentary stamp revenue.
Although advocates for Amendment 1 campaigned on the promise that conservation funds would not cut into funding for affordable housing, the implementing bill initially drafted by the Florida Senate did not fulfill this promise. Instead of appropriating 33% for Amendment 1 and the standard 16.19% for the Sadowski Trust Funds from the total pool of documentary stamp revenue, the Senate bill (S.B. 586) would appropriate the 33% for Amendment 1 from the total revenue and then apply the 16.19% for the Sadowski Trust Funds to the pool of revenue that remained – a pool diminished by 33%. This would have resulted in a loss of $113 million for the Sadowski Trust Funds in FY15-16 and losses in future budget years.
In response to S.B. 586, FHC and thousands of advocates across Florida mobilized a grassroots campaign to change the Senate bill. The result was that the Senate redrafted the bill to effectively restore the funding levels received under the traditional set-aside for the Sadowski Trust Funds. The same language was adopted in the House bill.
Of the $175 million for the Sadowski Trust Funds, $105 million will go to the SHIP program with $4 million set aside to fund the Department of Children and Families’ Challenge Grant program, which awards funds on a competitive basis to Continuum of Care (CoC) lead organizations. The lead agencies may allocate these funds to programs, services, or housing providers that implement their CoC plan.
The remaining $70 million will go to the SHTF, with $48 million allocated to the SAIL program. Of the remaining $22 million, $10 million will be set aside for a competitive grant program for developments designed, constructed, and targeted for persons with developmental disabilities. Grantees must be private nonprofit organizations with a primary mission of serving this population. FHFC will use the remaining $12 million to fund existing programs at its discretion.
Overall, the appropriation of $175 million for FY15-16 represents an increase of $7.3 million over FY14-15 levels. According to Jaimie Ross, FHC President, “Disagreement between the two state houses over Medicaid expansion threatened all funding this session. In light of the volatility, we consider this appropriation a testament to the value of educating legislators about the importance of housing and to never giving up.”
For more information, contact Jaimie Ross, Florida Housing Coalition, [email protected].