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rI IV. LOCAL GOVERNMENT AFFORDABLE HOUSING REQUIREMENTS. STATE AFFORDABLEHOUSING PROGRAMS, LOCAL AFFORDABLE HOUSING INCENTIVES Susan Leigh, Executive Director, Florida Housing Finance Agency, presented a FHFA folder of information to the Board members and others. (CLERK'S NOTE: This booklet, which includes a 1995-96 annual report, has been placed in the backup file of the meeting.) Ms. Leigh then reviewed the following in an informative and comprehensive narrative. Florida Housing Finance Agency 227 forth I3ronough St., Suite 5000 Tallahassee, Florida 32301-1329 (904) 488-4197 AGENCY PHILOSOPHY: • The Agency does not build housing, our private sector partners do. The FHFA programs are based upon the principal that the private sector is the primary producer of affordable housing. with state and local incentives leveraged as loans, whenever possible, to encourage public/private partnerships. To ensure that state monies are spent ort housing instead of administration, local governments should be rewarded for providing incentives and financial assistance for the production of affordable housing, particularly mixed income projects. POLICY FORMULATION: • The unique Board structure accomplishes its statutory obligations through private sector input, a critical component of public/private partnerships. A nine (9) member Board comprised of eight (8) representatives from various designated housing -related industries is appointed to four-year terms by the Governor and is subject to confirmation by the Florida Senate. The ninth position is reserved for the Secretary of the Department of Community Affairs. who serves as an ex -officio, voting member of the Board. PRIVATIZATION: • The Florida Housing Finance Agency IS the model public/ private partnership citizens are demanding from their government. The Agency, since its creation in 1980. has stressed the maximization of production and the minimization of overhead. With hundreds of partners. FHFA receives input from individuals and organizations representing housing advocates. developers, bankers, investors, attorneys, the real estate industry, construction. labor, and the elderly. As a result. the Agency generates income to pay for its efforts without general revenue. FLEXIBLE TOOLS - A MUST FOR SUCCESS: • To cause private sector developers to carry out state and federal initiatives, products must be readily, adaptable to rapidly changing market conditions. es Developers will dedicate significant resources to affordable housing only if they are assured that appropriate financial assistance will be provided by their public sector partners and made available when and where needed. Fluctuating interest rates, sunsetting federal and state programs, and finite resources/subsidies necessitate an on-going re-evalua- tion of program structures to ensure the continual existence of these public/privatc partnerships. ACCOUNTABILITY • The Agency employs a "Big 6" accounting firm to audit vearly activities. State audits, monthly financial reports and public meetings, and a detailed annual report to the Governor are also provided as documentation of the Agency's progress and proceedings. 12 FHFA programs are structured to be financially self-sufficient. Therefore, maximum effort is placed on ensuring the cost effectiveness of projects for all panics involved. The nine member Board reviews and approves all Agency activities on a monthly basis and contracts for all services, including banking and legal. high arc awarded through competitive bids using the states Request for Proposals (RFP) process. which THE BOTTOM LINE: BENEFITS TO FLORIDIANS - Private sector partners infuse private sector monies to leverage state funds. - Privatization of Agency resources eliminates need for general revenue for FIiFA administration. - Flexibility maximizes responsiveness to diverse communities. - Permanence of FHFA alloys private sector to make long-term commitment of resources to affordable housing - Svncrcy created by private sector partnerships creates new and improved "+yaws of doing business." Provides important stimulus to the state economy. 19 February 27, 1997 BOOK J 'J ma"Vii I