The Lofts at Cathedral in Downtown Jacksonville are an affordable housing development using Sadowski trust funds.The Lofts at Cathedral in Downtown Jacksonville are an affordable housing development using Sadowski trust funds.
The Lofts at Cathedral in Downtown Jacksonville are an affordable housing development using Sadowski trust funds.

Jacksonville pledges $10M for affordable housing

Published on April 10, 2024 at 2:58 pm

Calling it a “very elegant solution” to Jacksonville’s affordable housing crisis, Mayor Donna Deegan and others announced plans to allocate $10 million to jump-start an affordable housing loan fund to build more multifamily rental housing.

If City Council approves the money, it would allow $30 million or more in public, private and philanthropic funding to offer low-cost financing to developers so they can build affordable housing.

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The public-private partnership could ultimately create $120 million in new multifamily rental housing over 20 years, Deegan said Wednesday. It is “not a giveaway or a grant,” but a $10 million city loan that would be paid back at the end of a 20-year investment period, Deegan said.

“The city’s contribution allows the fund to bring in additional investors into this effort, and there are millions of dollars in pledges that are already lined up to match our investment,” Deegan emphasized during a news conference at the Jessie Ball duPont Fund on East Adams Street. “That is how we grow the impact of our dollars far beyond our original investment. It also allows us to reinvest funds over and over again to continue increasing our affordable housing supply for decades to come.”

With this fund, the city will soon address that affordable housing crisis “head on,” said Joshua Hicks, the city’s director of affordable housing and community development.

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“While this is truly just a part of the overall housing solution, it is an important, major first step that will leverage resources with this fund over the next 20 years for attainable housing development,” Hicks said. “Over 1,000-plus units will be built by leveraging available tax credits with the Jacksonville Housing Financing Authority, all with just a $10 million investment by the city, a loan that the city will get back in 20 years.”

Since 2011, the typical Jacksonville renter has been rent-burdened, spending more than half of their income on housing, Deegan said. And for those who can rent, there is a major shortage of places to do so, she said.

Mayor Donna Deegan announces the city’s new affordable housing funding program at the Jessie Ball duPont Fund on East Adams Street on Wednesday, April 10, 2024. | News4Jax

Calling it a problem that has “become embedded in almost everything” the city is dealing with, Deegan said only 48 housing units are available for every 100 renters who fall into that rent-burdened category. The solution, so far unattainable, is more affordable housing, she said.

City officials point to how Duval County developers applied for more than $50 million in low-interest loans last year from the Florida Housing Finance Corp., only to find that many of them went unmet.

Then city officials began investigating a possible $10 million buy-in for a public-private partnership that could help developers like the nonprofit Jacksonville Community Land Trust acquire properties across Duval County. A partnership proposal was made by Chris Crothers, director of impact investing for the Jessie Ball duPont Fund, and The Community Foundation, and brought to the city. duPont is a private foundation that uses grantmaking, investments, research and partnerships to invest in the Jacksonville community.

The issue at hand is that while some nonprofit and for-profit developers in Jacksonville are committed to building affordable housing, organizations like the Jacksonville Community Land Trust need initial funding to buy the land. The Land Trust creates home ownership options for low- and moderate-income individuals and families.

Developers usually use a mix of funding sources to build a project, from bonds to a state 4% investment tax credit, the mayor said. But there has been a shortage of the final financing need to complete many projects.

“What we are doing is making a public-private community funding source available to fill that gap,” Deegan said. “It will allow developers to unlock underutilized 4% tax credit financing from the state and move forward with their affordable housing projects that would otherwise remain stalled.”

Councilman Michael Boylan worked on a City Council committee investigating the loan project. He said one key recommendation from that group is the importance of the public, private and nonprofit sectors working together on the affordable housing crisis.

Boylan pointed out that City Council approved almost $60 million in tax-exempt bonds for the Jacksonville Housing Financing Authority late Tuesday to build three more housing communities.

“As the mayor said, inventory is the greatest challenge we face, and we need to do it as quickly as we can to build homes people will be comfortable living in and be proud,” he said.

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, the city said.

So far, private and philanthropic partners like the Jessie Ball duPont Fund and Community Foundation for Northeast Florida have expressed interest in being investors of the fund, the city said. That has resulted in about $14 million in commitments so far, Hicks said. Those partners will work over the next several months to secure the remaining loan dollars from the private sector including philanthropy, corporations, and financial and anchor institutions. 

“It will leverage the initial investment by the city to generate initial investments from private and philanthropic partners. By design, the capital and loan fund will be reinvested again and again to continue increasing the supply of housing for decades to come,” said Mari Kuraishi, duPont Fund president.

The mayor said Jacksonville is the first Florida city to implement a community specific fund that offers that gap financing to let projects proceed.

Self Help Ventures Fund, which manages higher-risk business loans, real estate development and home loan secondary market programs, will administer the program, as it has in other cities, the mayor said. The $10 million proposal will be added to the 2024-2025 city budget that the mayor’s office sends to City Council in July for debate and approval by October. If approved as part of the city’s next budget, the $10 million would be available, Deegan said.

This is not the first program the city has announced that could help those seeking affordable housing.

In March, Deegan announced a new Down-Payment Assistance Home Ownership pilot program that can provide up to 75% of the total as required by the mortgage writer. Applicants should be first-time homeowners.


author image Reporter, WJCT News 89.9 email Dan Scanlan is a veteran journalist with almost 40 years of experience in radio, television, and print reporting. He has worked at various stations in the Northeast and Jacksonville. Prior to joining the WJCT News team, Dan spent 34 years at The Florida Times-Union as a police and current affairs reporter.

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