A report from the Office of the Inspector General revealed that the city of Jacksonville has been giving away free land to people in an effort to build more affordable housing. However, since 2019, the city has failed to hold the land recipients accountable.

Out of 62 people who got free property from the city, 59 of them violated the agreement. In some cases, the properties were sold for profit, News4Jax reported.

The city gave away 174 parcels of land in 2020 to the 62 grantees. Those who signed up had two years to build affordable housing and get it on the market at below-market rates.

The report estimates the city lost about $600,000 in revenues from the 174 land donations. Since then:

• Forty-seven properties were completed.
• Seven were voluntarily donated back, and two more are in the process of being returned.

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• Five properties are undergoing pending lawsuits.
• Sixty-four property owners were contacted by mail about returning their property to the city. Of those, 15 have paid the city back for the assessed value of the properties, recouping $270,000 in revenue that will be dedicated to future affordable housing projects.
• Seven properties have had grant extensions approved.
• Thirty-five additional properties are asking for grant extensions.

The OIG report was front and center at Tuesday’s Finance Committee meeting, where council members called the findings “scathing” and “disturbing.”

Anne Brosche, chief financial officer for the city of Jacksonville, addressed the committee with the corrective actions the city has taken since the discovery that the land was misused, in part because of a lack of oversight.

“Tack on the instability of leadership changes and heavy turnover and you have a formula for failure,” Brosche said.

The OIG report found that 95% of the people who got free land to build affordable homes never did. Finance Committee Chair and former council President Ron Salem requested the Deegan administration be present at Tuesday’s meeting.

“Very frustrated that we’re here,” Salem said, talking to News4JAX after the meeting adjourned. “We have a big emphasis on affordable housing, and we’ve got people that are sitting on property for years and not creating affordable housing.”

City leaders say they have addressed all the corrective action items recommended by the inspector general for future land donations. That includes a more stringent application process, requiring quarterly updates from the land recipients, and dedicating a staff member to oversee compliance.

“The division will be standardizing our compliance work and the way in which we maintain contract management and contract oversight,” Brosche said while addressing the committee. “By appointing someone responsible for that function and building out a team separate from the individuals who are managing the contracts, this avoids the problem of never getting to the compliance or not doing it as thoroughly as we should.”

News4JAX asked Salem if anyone had been dedicated to grant compliance since 2019.

“Well, compliance, to be honest with you, has been an issue in this administration, in past administrations,” Salem said. “I’m pleased with Miss Brosche’s comments in terms of trying to really tighten it up. I think she now has a chief over that area that will be much more efficient in trying to get compliance where it should be.”

The city has also updated its donation agreements to prevent free land from being sold for profit in the future.

Travis Jeffrey, chief of housing and community development for the city, said the original land donation agreement did not specifically say that grantees could not sell the land.

“We went in and updated the legislation in the fall of 2023 to encompass all of that so now it does say they cannot convey the property as part of the donation agreement,” Jeffrey said.

Jeffrey also explained that the application requirements for land donations have changed. Recipients are limited to three properties instead of five and will need to prove they have past development experience and are financially capable of building affordable housing.

Grantees also will be required to contact the city before they sell the property to ensure they are below the affordable housing threshold.

In addition to new compliance standards, the Finance Committee will revisit the progress of the free land donations every three months.

In a statement, Mayor Donna Deegan’s office said: “As is all too often the case, Mayor Deegan’s administration is fixing mistakes made well before she took office. The Housing and Community Development Division and Office of General Counsel have already implemented measures that address all the recommendations in the inspector general’s report.”

This story was produced by News4Jax, a Jacksonville Today news partner.