Public-private partnership addresses chronic funding shortfalls to increase supply of affordable multifamily rental housing units – April 10, 2024 (Jacksonville, Florida) – Jacksonville Mayor Donna Deegan today announced she is committing $10 million in her proposed 2024-2025 budget to jumpstart an innovative affordable housing loan fund, a public-private partnership that would ultimately catalyze $120 million in new multifamily rental housing.
The fund would be capitalized through public, private and philanthropic low-interest loans, offering low-cost financing to developers, who can then unlock underutilized 4 percent tax credit financing from the state. The city’s investment of $10 million is a loan that would be repaid at the end of the 20-year investment period. As the critical first piece of the larger, $40 million affordable housing fund, the city’s contribution would allow the fund to leverage additional investors into the effort, growing the impact of the dollars far beyond the original investment.
“We’re facing a crisis of affordable housing in Jacksonville, and this innovative housing fund presents the opportunity for us to attract an additional $12 of investment for every $1 the city invests,” said Mayor Donna Deegan said. “This shows what is possible when we all come together to find solutions to our city’s challenges. I’m grateful for all the philanthropic, business, City Council, and community leaders who are working together to solve the challenge of affordable housing.”
According to research studies, the typical Jacksonville renter has been rent-burdened since 2011, spending over 50% of income on housing. Households earning 50% or less of Area Median Income (AMI) are facing a major deficit in supply: for every 100 renters at 50% AMI looking for housing, there are only 48 affordable units available to them, according to the University of Florida Shimberg Center for Housing Studies.
In the meantime, developers looking to create more affordable housing units are facing a shortfall in gap financing. In 2023, there were more than $50 million in applications from Duval County developers for low-interest loans from the Florida Housing Finance Corporation as part of their State Apartment Incentive Loan (SAIL) program – many of which went unmet. This community-specific fund would be the first in Florida to create a local source of gap financing that can allow those proposed projects to proceed.
Self-Help Ventures Fund, which would administer the fund as they have in other communities, estimates the partnership could finance acquisition and development of 500-1,000 housing units over the tax credit compliance period. Importantly, by design, the capital in the loan fund can be re-invested again and again, to continue increasing the supply of housing for decades to come.
“Florida has prioritized affordable housing through an existing vehicle for providing funding to developers – the statewide SAIL program for low-interest loans to developers building affordable housing units – but that vehicle runs out of fuel every year,” said Amanda Frazier Wong, President of Self-Help Ventures Fund. “This loan fund puts more fuel in the tank so that more affordable housing can be built and preserved each year.”
Private and philanthropic investment must total $30 million to match the city’s $10 million, which would then allow developers to leverage additional financing through other sources, such as bond financing, tax credit equity, and bank financing. Private and philanthropic partners including the Jessie Ball duPont Fund, The Community Foundation for Northeast Florida and its donors, and Northern Trust have expressed interest in being investors of the fund. These partners will be working over the next several months to secure the remaining loan dollars from the private sector including philanthropy, corporations, and financial and anchor institutions.
“The duPont Fund and our partners have conducted research and been in conversations with experts for years about the most effective strategies to finance affordable housing in Jacksonville,” said Mari Kuraishi, President of the Jessie Ball duPont Fund. “This model is unique because it can attract private and philanthropic dollars that would otherwise be sitting on the sidelines and return the capital to be re-invested in the community.”
“The Community Foundation has worked with donors to make impact investments for years, and the housing fund presents an exciting opportunity to expand the scale of those investments,” said Isaiah M. Oliver, President of The Community Foundation. “I want to thank the mayor for taking this critical first step, and I look forward to more conversations with the city and potential investors about why we believe the fund is a promising solution for a specific need in our community.”
“This loan fund represents true innovation in unlocking the supply of affordable housing for renters who need it most,” said John Donahoo, Senior Managing Director for North Florida for Northern Trust, which was integral in identifying the need for this model in Duval County. “Northern Trust applauds Mayor Deegan and our philanthropic partners for the creativity and dedication it takes to bring this loan fund to life.”
City Council Member Joe Carlucci has invited the duPont Fund and The Community Foundation to present on the affordable housing fund at the April 22 meeting of the City Council’s Special Committee on Affordable Housing and Homelessness, which he chairs.
“We must tackle our affordable housing crisis on all fronts, and this fund could be a critical piece of the puzzle for building more inventory,” said Councilmember Michael Boylan. “I look forward to exploring the concept more with my colleagues and building on the work of our special committees focused on this important issue.”
Unlocking the challenge of affordable housing supply has been a focus of Jacksonville’s public and private sectors for many years, with this loan fund as the number one recommendation from the Mayor’s Housing Summit in 2022 and was also one of the key recommendations from Mayor Deegan’s transition committee on affordable housing.
The Mayor will include this $10 million allocation in her budget, which will be presented to the City Council in July 2024 and ratified by City Council in fall 2024.
“This is an exciting day for our work to address the affordable housing crisis in Jacksonville,” said City of Jacksonville Affordable Housing Director Joshua Hicks.
###
About the City of Jacksonville
The City of Jacksonville is the largest city by land mass in the contiguous United States, serving nearly one million residents. City of Jacksonville leadership includes Mayor Donna Deegan and a 19-member City Council led by President Ron Salem. The City of Jacksonville and Duval County are the only consolidated city-county government in Florida. To learn more, visit jacksonville.gov.
Be the first to comment