Stephen Auger worked his way up to the position of executive director of the Florida Housing Finance Corp. after five years at the agency, most recently serving as deputy development officer of multifamily programs.
He took over the top post in August 2005 after former executive director Orlando Cabrera left to become assistant secretary at the Department of Housing and Urban Development.
Auger shares with Affordable Housing Finance how his state will help provide the funds and land needed for affordable housing. Florida Housing will allocate about $33 million in low-income housing tax credits this year.
Q What are some challenges you are facing with financing affordable housing? How are you dealing with them?
A In the last couple of years, we’ve dealt with land, construction and insurance costs. We’re being challenged to think about growth-management issues.
A lot of counties and urban areas are built out. There’s a big growth-management initiative … that will be implemented now. It creates a lot of funding for growth management, requiring local governments to be thoughtful about zoning and density, to think about roads, schools and affordable housing needs.
Q How is hurricane recovery changing your priorities?
A One of the silver linings of the storm is that it raised affordable housing issues for a lot of communities. A lot of local elected officials became aware of its importance, which translated to a lot of support and extra funding for affordable housing last year. We got an extra $350 million.
[Gov. Jeb Bush was proposing at press time to increase funding for Florida Housing’s affordable housing programs by 26% to $243 million next fiscal year, which starts Oct. 1.]
Q What trends are you seeing in affordable housing in your state?
A There’s certainly concern about costs rising and incomes not keeping pace. Gaps in financing structures are getting wider, requiring more subsidy per unit. For us, that means fewer units.
The good news is that will force us to be more creative. We will look at recommendations for more comprehensive preservation strategies [such as creating community land trusts with HOME dollars].
For the 2006 tax credit cycle, we raised the request limit for 9% tax credits by about 5% [to $2.5 million per project]. Most areas damaged by Hurricane Wilma will get a 30% boost to their eligibility basis.
Q Some developers say that it’s been more difficult to finance with tax-exempt bonds. Do you agree?
AIt’s true we currently have a lot of unused bond authority. It goes with the increase in costs and no increase in incomes. It’s harder to support debt.
In the last couple of years, we have paired state dollars from the State Apartment Incentive Loan (SAIL) as gap financing. We’re looking to make SAIL loans more flexible with rates and loan-to-value ratios to make those second mortgages more useful in using 4% tax credits.
High construction cost areas may still not be feasible to use tax-exempt bonds. With these changes, [at least] many other areas will be feasible to do bond deals.
[The] legislature is proposing a Rental Recovery Loan Program again this year. Funded from state housing trust fund dollars, it’s designed to work with bonds [especially in hurricane-affected areas]. Last year, the program got $42 million. The governor will recommend $176 million in the next legislative session for counties affected in 2004 and 2005.