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Money set for cheaper housing

The county establishes a trust fund, starting with $10-million.

By DEMORRIS A. LEE
Published November 26, 2006

For the first time ever, the Pinellas County Commission established a trust fund to help local agencies provide and maintain affordable housing.

The first contribution will be $10-million, with another $10-million earmarked for each of the next two years.

“It’s a good first step, but it falls short of addressing the real scope of the need for affordable housing in Pinellas County,” said Ken Welch, chairman of the County Commission. “We are looking to find dedicated sources for affording housing in the county.”

The first $10-million was approved during the budget process in September. Now the county and several Pinellas cities must come up with plans by Jan. 15 that outline how they will use the money.

The county will get $4.3-million from the fund; Clearwater, $937,000; Largo, $617,000; and St. Petersburg, $2.12-million.

At least 15 percent must be used to serve residents with special needs or very low incomes. Eighty percent has to be earmarked for loans that will eventually be paid back to the trust fund.

The Housing Financing Authority of Pinellas County will use $2-million to facilitate the housing fund countywide.

“We are very excited about the county’s participation at looking at the housing crisis in the county and looking at what we can do together to improve it,” said Geri Campos, Clearwater’s director of economic development and housing.

The participating agencies have yet to finalize their plans for the money and will likely use it to supplement existing housing assistance programs.

“We have more need than we have money,” said Matt Anderson, Largo’s housing manager. “We may try to encourage new construction or some rental conversions to help lower-income families, down payment assistance. … We are looking at all of that.”

Since 1994, Largo has given out more than $1.3-million in down payment assistance to home buyers, helping nearly 270 residents.

For Pinellas County, the new funding couldn’t have come at a better time. In 2003, one of the county’s housing assistance programs provided 104 residents with down payment assistance. So far this year, only 21 home buyers were able to qualify or to locate housing that they could afford.

“With the rising home prices and the income level requirement, a lot fewer people could take advantage of the program,” said Bruce Bussey, urban development manager for Pinellas County. “Home prices outpriced a lot of the population in terms of income and home cost.”

That’s why the county must find a way to provide a permanent revenue stream for its housing fund, Welch said.

“We are looking at a long-term process instead of being on the budget cycle,” Welch said. “We are looking for ways to fund our trust fund locally that do not require a tax increase.”

If tax increases cannot be avoided, one possible solution is a tax on real estate transactions, Welch said.

Finding revenue streams for the housing fund is a priority because of the state’s unwillingness to release all of the money that it has collected for affordable housing, Welch said. Beginning in the 1992-93 fiscal year, the state collected money using the documentary stamp tax that was to be used for affordable housing.

But the state Legislature has not allocated all of the funding in the past, and future funding will be capped well below the total amount collected.

From 1992-93 to 2005-06, more than $3-billion has been collected, but $415-million has gone unappropriated.

“We heard (last) week that maybe the money will be used to offset the increase in homeowner insurances,” Welch said. “But the fund is for affordable housing, and we could use that money right now. I don’t have great hope that the local government is going to ever see that money.”

Demorris A. Lee can be reached at (727) 445-4174 or dalee@sptimes.com.

[Last modified November 26, 2006, 21:07:57]