Mayor Donna Deegan will include $10 million in her next budget specifically to provide loans to affordable housing developers, she announced Wednesday.
The funds will ultimately represent a quarter of a larger private-public partnership that she hopes will raise at least $40 million in the upcoming year for the program and ultimately generate $120 million in new multifamily rental housing.
The plan has been in the works in the private sector for years, leaders of the Jessie Ball duPont Fund and The Community Foundation of Northeast Florida said. The city’s involvement now, Deegan said, was a matter of prioritization.
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“We have seen this issue [affordable housing] accelerate to the top of the list of concerns for our community,” Deegan said. “We hear about it every day. We know what a big deterrent it is to the success of many members of our community, and so we just moved it to the top of the priority list.”
Deegan’s transition committees and two City Council committees have studied the rental housing crisis in the city over the past two years. Both the council and the mayor’s office have passed a number of programs, such as the recent downpayment assistance initiative.
Deegan hoped the $10 million would be the start of the larger initiative to increase the supply of affordable housing in the city, pointing to the current shortage of only 48 units for every 100 cost-burdened renters. She will need City Council budget approval in October to allocate the money to the loan program.
Joshua Hicks, the city’s affordable housing director, said he hoped City Council would approve the budget funding because the city still had “a long way to go.”
“My hope is once this fund is launched, we’ll be able to move pretty quickly, within a month or two, to start to approve a development, to later this year or early 2025, to start using these resources to our advantage,” Hicks said.
How would the program work?
The program aims to help developers find “gap funding,” a term used to describe the difference between the financing resources already acquired and the amount still needed to make a project feasible.
By offering loans, the city will be able to recycle the payments back into the program itself. Officials expect it to revolve four times to support between eight to 10 acquisitions over 20 years.
At the end of the 20 year period, the city’s loan will be repaid.
“This is one of those situations, like with so many other things, the solution seems like it should be simple, but it’s just often been overlooked or underutilized,” Deegan said. “Sothis is a very elegant solution that will create a lot of affordable housing for us.”
Hicks, the affordable housing director, said the city will work with Self-Help Ventures Fund, the administer of the loans, to develop the specific requirements for the projects and work with the Jacksonville Housing Finance Authority.
Self-Help estimated the partnership could finance the acquisition and development of 500-1,000 housing units over the tax credit compliance period, the city said in a press release.
The city hopes to raise at least $30 million in private investments for the fund, and Hicks estimated they already had about $14 million pledged. He anticipated it would only be a matter of months before they reached their goal.
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