Veto leaves Pinellas affordable housing officials scrambling

Yonnette Taylor, second from left, and her family on June 23 show off her new house in Dansville that she earned through the Habitat for Humanity program. Habitat for Humanity is one of many nonprofits that utilize state housing money to help fund their services.

CLEARWATER — Local housing officials had high hopes to start 2020.

Year after year, they had watched as state legislators diverted funds earmarked for affordable housing programs to other purposes. In 2018, it was for school safety measures in the wake of the Parkland school shooting. In 2019, it was for Hurricane Michael recovery efforts.

But Gov. Ron DeSantis said no more, and on March 7, it was announced that the $387 million would remain in the Sadowski Affordable Housing Trust Fund, which is generated by a surcharge on real estate transactions.

That meant a huge windfall for local governments that use the funds to offer services such as down-payment assistance and homeowner rehabilitation programs.

“The allocation of just over $1.2 million, to my knowledge, was the largest allocation we’ve ever received,” said Denise Sanderson, director of housing and economic development for the city of Clearwater. “Certainly when we look at it over the last 10 years.”

The previous two years the city had received $202,000 and $157,000, respectively, she said.

Largo was expected to receive nearly $900,000 and St. Petersburg nearly $2.9 million.

But then the coronavirus pandemic arrived and, as DeSantis stated when finalizing the budget June 29, “the circumstances have changed.”

DeSantis line-item vetoed $225 million for the State Housing Initiatives Partnership (SHIP) program — the funds used by local governments for their affordable housing services.

The move means cities like Clearwater went from expecting a record amount of funding to nothing.

“The bread and butter of what we use SHIP funding for and where we’re really going to feel this effect is through our down-payment assistance and homeowner rehab programs,” said Sanderson, adding that the funds also have other uses like new construction.

Nonprofits such as Habitat for Humanity also use the funds to make mortgages affordable for low-income families in its program and for retrofitting homes of seniors and individuals with special needs.

CARES Act

Not all hope is lost, though.

The state recently received $250 million for rental and mortgage assistance programs from the federal government via the Coronavirus Aid, Relief and Economic Security Act. DeSantis said he aims to use those funds to supplant the budget cut.

In a statement released following the veto, Jaimie Ross, facilitator of the Sadowski Coalition and president and CEO of the Florida Housing Coalition, said affordable housing advocates shouldn’t feel dejected yet.

“I know we are very disappointed that SHIP ($225 million) was vetoed but I don’t believe we should look at this as a sweep of SHIP — there is a huge amount of CARES Act funding going to local governments now that has to be deployed immediately,” Ross said, noting the money has to be expended by the end of December.

CARES Act funding, however, likely can’t be used in the same way, Ross said.

“For example, we won’t be able to address any housing issues that are not COVID related with the federal funds. We will lose the new construction, homeownership opportunities, disaster mitigation, and the jobs that are created with all these activities that are the staples of SHIP,” Ross said.

DeSantis announced that $120 million of the $250 million will go to counties based on local unemployment rates. The funds will be used for rental and homeowner assistance programs such as new construction, rehabilitation, mortgage buydowns, and down payment and closing cost assistance.

Cities wait and see

But there’s no telling how much, if any, local municipalities that rely on the funding like Largo and Clearwater will receive.

“We’re going to have to adjust to whatever this allocation may be,” Sanderson said. “We’re not expecting any allocation at this point because it has been vetoed, but if something comes forward we’ll certainly be able to utilize it. We’re scrambling a little bit to try to figure this out.”

Largo city staff said they will be monitoring plans for the distribution of the funding as well as a potential special legislative session in the fall and are prepared to continue advocacy and education efforts to lobby for the SHIP funding.

Even if nothing funnels down to cities, Sanderson said many services will continue because past down-payment assistance and rehab loans do provide income for the programs.

“By no means does it mean that we’re closed down or that these programs don’t exist,” she said. “It just means that we’re really going to have to kind of look at the entire budget and reprioritize things and shift our plans a little bit.”

Funding restrictions on who can receive aid has always been a challenge, Sanderson said, and that challenge has been amplified because of the mounting demand caused by the pandemic.

So, even if federal money is filtered down to local governments, she expects it won’t be a simple task to deliver the aid because new programs often come with new rules and little guidance.

“In this time especially when the challenges are so huge and new, it’s hard to write rules that fast,” she said.

But that doesn’t mean the city won’t try.

“These are big challenges but I know we are all feeling proud and privileged and honored truly to be able to help people, and it’s heartbreaking when you can’t.”