When it comes to affordable housing, government makes things worse -- and better.
No quick fix
The Legislature, whose regular session starts March 6, isn't likely to deal with this problem in a comprehensive way this year. It's way too complicated -- a lot worse than property insurance, where the state could just take over some risk from insurers and pray for no more hurricanes.
Besides a general assault on property-tax levels, at issue this session will be money for the state's subsidy programs, which comes primarily from the 1992 Sadowski Act and an additional 10-cent documentary-stamp tax on each $100 worth of property transferred. Over the years through fiscal 2006, says the legislative Committee on Intergovernmental Relations, $2.3 billion has been spent on affordable housing programs, while $350 million was diverted to other uses and $450 million was collected but not spent (most of that in the last three years).
Two years ago then-Gov. Jeb Bush wanted to eliminate the Sadowski (and other) trust funds. The legislative compromise was a cap on the portion of documentary-stamp taxes set aside for housing programs. Unless the cap is lifted, only $243 million will be available for affordable housing for 2007-08, compared with more than $600 million (including $250 million in hurricane relief) in the current year. Even without the cap, the number of units created under these plans has fallen from 19,000 five years ago to 7,000 in 2006 because of a wider gap between market prices and affordable prices for homes, says Lloyd Boggio, whose Carlisle Development Group in Miami builds subsidized housing.
There are really three basic subsidies:
? Subsidies to developers to help them finance developments with lower selling prices;
? Low-interest or no-interest loans directly to home buyers;
? Equity-sharing arrangements, in which the government or an employer puts up part of the down payment on a house in exchange for a share of the future profits upon sale or in which a "community land trust" owns the land and leases it for free to qualified home buyers, who pay only for the house. Some local governments offer to waive some growth regulations or fees for builders who include lower-priced housing in their developments.
At the Shimberg Center on Housing at the University of Florida, director Robert Stroh urges the use of employer bargaining power. "An employer with a large nursing staff might say, 'I'll direct them to you, Mr. Banker, if you'll cut three points off the loan cost.' It doesn't cost the employer a penny."