Affordable Housing Projects In Jeopardy

By CHRISTIAN M. WADE
cwade@tampatrib.com
Published: March 7, 2009

TAMPA - Several affordable housing projects in Hillsborough County are imperiled by the Florida Legislature's decision to pull $190 million out of a pot of state money intended to build apartments and moderately priced homes for working-class families.
The Richman Group, a West Palm Beach-based developer, is planning to break ground this year on three affordable housing complexes in unincorporated Hillsborough, nearly $96 million in projects that combined would provide more than 670 low-rent apartments.
The projects include the $48.2 million Kensington Gardens complex off Progress Boulevard; the $32.9 million Cross Creek complex off U.S. 301 and Sligh Avenue; and the $15.6 million Sabal Ridge development off Martin Luther King Jr. Boulevard.
To help offset the cost of construction, the developers had been pledged more than $15 million in additional funding from Florida's State Apartment Incentive Loan program.
But the Legislature's decision to pull money out of the state's affordable housing fund to plug a $2.3 billion budget gap means those projects might never get off the ground.
"If we can't find alternative financing, it could mean that these projects don't go forward," said Todd Fabbri, the company's executive vice president. "We are very concerned."
The Florida Housing Finance Corporation, which provides funding for affordable housing projects, wants to plug the gaps in financing by allowing developers to apply for federal tax credits in exchange for money the state government had pledged to their projects.
Under the proposed changes, set for a vote by the housing corporation's board of directors on March 13, a project would have to be located in a county that has had a 95 percent occupancy rate of existing affordable housing units during the past six months to qualify for housing tax credits.
In theory, developers would be able to sell credits to investors in exchange for financing.
But affordable housing officials estimate only about six of Florida's 67 counties would qualify for credits under the proposed changes, and Hillsborough is not one of them.
"This would basically say there isn't a need for more affordable housing in the county," said Sharon West, Tampa's housing and community development manager.
Currently, Hillsborough's occupancy rate is estimated at slightly more than 90 percent; Tampa's is estimated at 94.3 percent. Both fall short of the 95 percent threshold.
Florida's affordable housing trust fund was created in 1992 to generate money for low-income housing in the state. It was named after the late legislator William Sadowski.
County officials say the Legislature's decision to pull the money out of the fund will hurt those who can't qualify to buy homes even in Florida's depressed housing market.
"It's going to impact us tremendously," said Valmarie Turner, director of Hillsborough's affordable housing office. "With the economic recession, there has never been a greater demand for affordable housing and losing this funding will affect those most in need."
Statewide, some 50 low-income projects could be affected by the Legislature's decision to pull the money, and developers who had been pledged those dollars for projects are threatening to file lawsuits if the state reneges on the commitments.
Housing corporation spokeswoman Cecka Green said the state agency is caught between developers who were pledged funding and lawmakers who are facing a record budget deficit.
"We have to give that money back to the Legislature," she said. "We have no choice."
Mark Hendrickson, a financial adviser for Hillsborough's affordable housing programs, said the housing corporation's methodology to determine the demand for rental housing is flawed.
"There's a misconception that foreclosures and falling house prices mitigate the need for new affordable rental housing," he said. "As if housing that once sold for $225,000 and now sells for $170,000 is somehow affordable to a family earning $30,000 a year."