Coalition: Repeal Affordable Housing Spending Cap

The threat of hurricanes, rising Florida mortgage costs, spiraling property taxes and ever-rising insurance premiums.

These are some of the many reasons for the housing squeeze experienced by low- and moderate-income families in the Sunshine State.

As part of the solution, a coalition of religious groups, growth-management activists and business leaders is asking the State Legislature to eliminate a law that limits state spending on affordable housing programs.

The Florida Catholic Conference, which represents the state’s bishops on public policy, is extremely active in the effort to make sure people who can’t afford a Florida mortgage at market rates have a chance to own a home.

Jaimie Ross, affordable housing director for 1,000 Friends of Florida, a Tallahassee-based watchdog group, says unless the cap is repealed, state affordable housing programs will lose up to $1 billion in funds.

“Right now, we’re on the defensive,” she said. “We’re not even asking for increased funding. We just want lawmakers to get rid of the cap.”

In 1992, Florida lawmakers enacted a landmark affordable housing law in memory of William E. Sadowski, the former Miami lawmaker who died in a plane crash that year.

Under the Sadowski Act, a portion of the cash raised from the documentary stamp tax on property tax revenue was dedicated to funding affordable housing projects; 30 percent of the money was allocated to the state and the remainder of the money was distributed to local governments.

Taxes on real estate transactions were deliberately chosen as the funding source so that spending for more affordable housing could keep pace with activity in the marketplace.

As the Florida housing market market flourished during this decade, money for affordable housing poured into state coffers. Since 2003, however, lawmakers have refused to appropriate all of the taxes collected.

In each of the last two years, lawmakers have allocated $400 million in affordable housing spending - a boon for residents who cannot afford the Florida home mortgage loan payment on a market-priced property.

This year, a law goes into effect that caps annual appropriations for these programs at $243 million, regardless of what funds are actually available from the real estate tax.

“We haven’t been able to get by on $400 million a year,” says Ross, “So we definitely can’t get by on $243 million.”

According to Robert C. Stroh, director of the University of Florida’s Shimberg Center for Affordable Housing in Gainesville, “There are parts of this state where the cost of housing is so high and payment received by service workers is so low that there is nothing affordable available.”

In the Miami area, the median price for a single-family home was $371,000 last year, up from $286,000 just two years earlier, according to the National Association of Realtors.

As the cost of Florida mortgage loans increases along with property values, so have the cost of property taxes and insurance.

That’s hammering private citizens - but the rising cost of land has hit commercial real estate owners particularly hard.

The Constitution exempts $25,000 of homestead exemption property from taxes and limits the growth in property taxes as long as the home remains in existing hands. Neither of these constitutional limits on property taxes applies to land owned by a business.

The lack of tax limits on commercial real estate helped lift property tax funds by 80 percent from 1999-2006. Property taxes now exceed sales and use taxes as the largest source of government revenue in the state.

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