Worker housing in Sarasota County would be built using existing taxes

Proponents of a new idea for financing the construction of affordable workforce housing say the method could steadily produce large numbers of units by letting growth pay for itself without raising taxes.

The idea didn’t start with one of the area’s many longtime housing advocates.

Instead, it’s the work of Drayton Saunders – president of Sarasota-based Michael Saunders & Co., the region’s largest real estate brokerage.

Although he unveiled it several years ago, it is now gaining momentum as employers increasingly struggle to retain and recruit workers due to high housing costs, which have priced everyone from nurses and teachers to law enforcement and restaurant workers.

Support for the method includes recent unanimous support from the Greater Sarasota Chamber of Commerce board.

Meanwhile, Saunders — part of Sarasota County’s Affordable Housing Advisory Committee (AHAC) — has seen his proposal rocket to the top of the committee’s recommendations to area elected officials.

His idea is this: Use a percentage of property taxes from new construction projects as a recurring revenue stream to fund a local affordable housing trust fund.

“We’re in the catbird seat,” Saunders said of the area’s robust growth.

But now, he added, community leaders must use that growth to the area’s advantage and find ways to keep the region affordable for the people who live and work here.

“Sometimes your greatest strength is your greatest challenge,” he said.

Financing affordable housing in Sarasota County without raising taxes

Under Saunders’ proposal — passed by AHAC and now backed by the House — the Sarasota County Commission, in consultation with City of Sarasota officials and other local policymakers, would decide on a percentage to be taken from property tax revenue from new developments.

That money would be diverted to the county’s Affordable Housing Trust Fund and used to build a new workforce and affordable housing.

Although the county has already established the trust fund, it often sits empty because there is currently no dedicated revenue source to fill it on a consistent basis.

Saunders’ proposed financing method would see no change in tax rates at all, he pointed out. Property owners would also not see an increase in their tax bills.

“Your bill will look the same whether we do this or not,” Saunders said.

The benefits of this financing method, Saunders said, include local control and oversight, and a stable and virtually guaranteed source of income as long as there is growth.

‘Money is the secret sauce’ for affordable housing in Sarasota

Saunders said he had several “light bulb” moments on the way to coming up with this idea.

As a former board member of the Community Foundation of Sarasota County, he witnessed the deal for Sarasota’s Lofts on Lemon – a public-private partnership with the Sarasota Housing Authority that included grants and low-interest loans from the city and local nonprofits.

However, his time on philanthropic boards has also taught him that nonprofits cannot be a long-term solution or strategy for a housing crisis of this magnitude — given how donor dollars are often tied to a range of other specific missions and responsibilities.

“I admire the nonprofit sector for stepping in, but that won’t happen on every project,” he said.

When Saunders was appointed to AHAC, he became an enthusiastic student of the affordable housing landscape.

It didn’t take long for him and his colleagues to realize that many of the standard recommendations being made – things like waiving parking requirements, speeding up permitting, incentives for developers and more – weren’t delivering nearly enough.

A mix of tools was absolutely essential. But Saunders and his fellow AHAC members found that communities across the country that are making progress on the issue are treating affordable housing as a “strategic asset,” like schools and hospitals, and creating or identifying a dedicated funding source to get it built .

“Money is the secret sauce,” he said.

Imagine, he thought, if just a small portion of the tax revenue from Sarasota’s astonishing growth could be set aside for affordable housing, the way other “tax increment” districts do for things like the arts.

“The idea came after that,” he said, but leaders had to show what could be achieved with a committed influx of money.

“We had to wait for a pandemic and a hurricane to prove it.”

Emergency Assistance is not a reliable source of funding for affordable housing for Sarasota County

The $25 million the county commission has released from its federal pandemic relief funds for affordable housing will create 700 new units of affordable and workforce housing if leveraged with the initiatives of private and public partners.

Currently, the county is accepting applications from developers for a share of an even larger pot of affordable housing funding — $40 million — awarded by HUD in the aftermath of Hurricane Ian.

While advocates greatly welcomed this influx of money and the affordable housing it will bring, they say more is needed to meet demand for not just hundreds, but tens of thousands of additional units.

“Do we want to wait for the next pandemic and hurricane before we can develop an affordable housing strategy?” Saunders said. “I do not think so.”

Instead of the county and its residents waiting for the next round of disaster relief funds or developers taking action on incentives, a reliable financing method for Sarasota’s Affordable Housing Trust would put the county in the driver’s seat.

With cash in hand, affordable housing builders will line up to do business with the province, Saunders predicted.

“The real decision is the overall intention to do it,” he said. “It’s going to take an entire community to say to our elected officials, ‘This is so critical, you can’t touch this.’ You have to step forward and be brave.’”

A game changer for affordable housing in Sarasota County

The Greater Sarasota Chamber is already sold and has announced that it plans to meet with local elected officials in hopes of getting them on board with this funding method as part of the dozens of AHAC recommendations it recently approved.

The funding idea, along with the Chamber’s support, is a “game changer” for affordable housing, said Jon Thaxton, current AHAC chairman and senior vice president for community leadership at the Gulf Coast Community Foundation.

Thaxton, a former county commissioner, had been calling for some kind of recurring revenue source for affordable housing for 20 years before Saunders approached him.

“Drayton had to explain it to me before I could understand it,” Thaxton said.

When it clicked, Thaxton thought Saunders’ idea was “simplistically brilliant.”

Thaxton elaborated on the possibilities of the financing method, noting that the money can be used and deployed with partners to vastly ramp up construction of affordable and employment projects in many ways, from building roads or expanding from utilities to lowering rental thresholds for partner projects, or even the province itself purchases land and construction projects.

Of the many positive aspects of this financing method, Thaxton says he is most excited about the dynamic options it will bring to the county and its residents.

“If we can hold on to that money, you’re going to have competition from developers to build affordable housing, and that’s what makes it work,” he said. “There is nothing better than competition accompanied by a market-driven approach. And that’s what this does.”

“We don’t want a good deal,” Thaxton added. “We want the best deal.”

This story comes from a partnership between the Sarasota Herald-Tribune and the Community Foundation of Sarasota County. Saundra Amrhein reports on the Season of Sharing campaign, along with issues surrounding housing, utilities, childcare and transportation in the area. She can be reached at [email protected].