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Central Fla. Seeking $100M for Private Affordable Housing Fund

A group of Central Florida business and philanthropy leaders is creating a $100 million fund to address the region’s affordable housing crisis – money that will be used to build, renovate or preserve an estimated 25,000 homes and apartment units over the next decade.

ORLANDO, Fla. – A group of Central Florida business and philanthropy leaders is creating a $100 million fund to address the region’s affordable housing crisis – money that will be used to build, renovate or preserve an estimated 25,000 homes and apartment units over the next decade.

The housing impact fund will give developers of affordable and workforce housing access to low-interest loans, subsidies and gap funding at a time when housing prices have soared and funding from the state’s Sadowski Affordable Housing Trust Fund has been repeatedly redirected by the Florida Legislature for other purposes.

“Everybody in the region is worried about affordable housing,” said Mark Brewer, president and CEO of the Central Florida Foundation. “In 2030, we’ll be the same size as Boston. If we don’t all get involved to find a way to solve this … then we’re just going to be sitting back every year saying, ‘Well, there was no money from Sadowski. I guess there’s nothing we can do this year.’”

The idea for the impact fund comes from the Central Florida Foundation and the Central Florida Regional Housing Trust, created last year to acquire property for affordable and middle-income housing. Already in Parramore, the trust bought, renovated and updated 83 housing units while holding their rents to affordable rates.

The new partnership includes more than 35 regional leaders from banking and finance, real estate and development, major employers, universities, philanthropy and local jurisdictions. After studying efforts elsewhere around the nation, leaders decided the Central Florida response needed to be driven by the private sector.

“Private capital is one of the key factors in solving the housing crisis in Orlando,” said business entrepreneur Rob Panepinto, a former Orange County mayoral candidate who chairs the new fund’s Central Florida Housing Action Team. “There are a lot of great projects that folks want to bring to bear but finding capital sources for those projects either takes too long or is too difficult. Even if Sadowski were fully funded and the dollars came to our community, these [impact fund] dollars are well in excess of whatever we would get.”

The fund should reach its $100 million target – and new affordable housing projects should be announced – by late this year, Brewer said. The money will support affordable housing in Orange, Osceola, Seminole and Lake counties.

Several banks have representatives on the housing action team and are expected to make announcements in the coming months on how much they’re prepared to devote to the project, Panepinto said. Most likely, the banks will agree to offer below-market low-interest loans through the fund, while other companies, charitable foundations and mission-driven investor funds are expected to make donations or long-term investments in the developments.

With over 1,500 people moving to the region every week, Central Florida now has the nation’s most dire shortage of housing for those with extremely low incomes. And nearly half of all residents here spend 50% of their paychecks on housing – well above the 30% maximum recommended by financial experts.

“We aren’t the only state with an affordable housing crisis, and collectively, we are able to tap into nationwide expertise to look at models that can be adapted to help us with the unique challenges we face here,” said Sandy Hostetter, Central Florida regional president of SunTrust (now part of Truist Financial).

The housing impact fund will go to both single-family and multi-family homes for sale and for rent, across a broad range of prices and in neighborhoods throughout Central Florida, Panepinto said. And because it’s non-government funding, it should help speed up development of affordable housing, which can stall while waiting for government approvals.

“I’m excited that there is another pocket of money for this work,” said Steve Smith, a nonprofit housing developer and executive director of Housing for All Lake County, a coalition formed last year to address the housing affordability crisis. “All of the deals we’ve done in Lake have involved subsidies, not just loans, which is what you need if you’re going to keep the housing payments low.”

Panepinto said some businesses are expected to make corporate charitable contributions to the fund while others will become equity investors that get a modest return on their money, typically around 1%.

For employers, “it’s a talent issue,” he said. “Can they find talent? And by the way, that’s not just an issue [for the theme parks] … it’s an issue at more of the [middle-income] jobs as well, because we’re competing with communities across the country for [employees].”

In Pittsburgh, for instance – a city that, like Orlando, is trying to lure tech workers – the average price of a home was $142,000 last year. In Orlando, it was $230,000.

“Particularly in an area that’s growing like ours, where you’ve got UCF turning out all of these students and all this talent that we want to keep in our community, housing costs affect a big swath of the workforce,” Panepinto said.

The fund’s announcement follows a move by Orange County commissioners last month to set aside $10 million for its own affordable-housing trust fund and a pledge by Universal Orlando in December to provide 20 acres of land for as many as 1,000 affordable housing units in the tourism corridor.

“With the depth and the breadth of this problem, there’s no one magic bullet,” Panepinto said. “It really is going to take all the different sectors of our community to attack this. But we think this is an important piece.”

© 2020 The Orlando Sentinel (Orlando, Fla.), Kate Santich. Distributed by Tribune Content Agency, LLC.