Details: Kemp’s $35.7 million plan for affordable housing

By David Pendered

Jan. 16 – Gov. Brian Kemp’s $35.7 million proposal to fund affordable housing initiatives relies on redirecting state funds in an authority created by the state in 2000 to allocate some of Georgia’s share of the settlement with tobacco companies over health costs of smoking-related illnesses.

The proposed structure of the Rural Workforce Housing Fund program could enable funds to flow immediately from state coffers to local governments and entities that help develop and maintain affordable housing, according to the governor’s proposed budget package. The money could help pay for houses to be built, older ones to be updated, and perhaps commercial structures to be retrofitted into apartments. The money is earmarked in the budget for the current fiscal year, which ends June 30, though funds don’t have to be allocated or spent by that time.

The map of counties eligible for funding from the OneGeorgia Authority are in dark green. Counties in light green may be eligible and the counties in gray are ineligible. (Credit: DCA)

The highest levels of state government would oversee the workforce housing fund.

For starters, the governor chairs the OneGeorgia Authority, which is to oversee the allocation of workforce housing funds. OneGeorgia’s executive director is the commissioner of the Department of Community Affairs.

OneGeorgia is housed in DCA, which already has relations with local governments and entities to pass through federal and state dollars to help finance community and economic development, and housing. Most of Georgia is eligible to receive funds from OneGeorgia, according to a map.

The Legislature must approve the governor’s initiative for it to be implemented. The governor is to present his budget Tuesday to the Joint Appropriations Committee of the House and Senate. DCA’s presentation to the committee does not appear to be listed on the agenda of meetings scheduled through Thursday.

Even if approved, the measure is not ensured future funding. The item does not appear to be funded in the fiscal year that begins July 1.

However, money could be available in future years. One potential source is the annual payments to Georgia by tobacco companies for the tobacco settlement. Payments are to continue forever. Georgia has collected $3.7 billion in tobacco settlement payments, from 2000 through April 20, 2022, according to a report by the National Association of Attorneys General.

The purpose of OneGeorgia is to spend some of the money collected from tobacco settlement on projects that promote the economic livelihood of rural Georgia. Then-Gov. Roy Barnes proposed, and the Legislature concurred, that some of the tobacco money should go to rural regions with few well-paid jobs in addition to their share of smoking-related health costs.

Kemp’s plan addresses a housing affordability issue once limited mostly to Georgia’s cities. Now the issue is arising in rural Georgia.

The OneGeorgia Authority outlines its mission in this statement. (Credit: DCA)

The influx of new jobs actively sought by the state is revealing a shortage of homes across the state. Just as they have across the nation, rental prices have risen throughout the pandemic and mortgage rates began rising last year in response to the Federal Reserve’s efforts to curb inflation.

This is how the governor’s proposed budget describes the housing affordability issue:

  • “As we grow business opportunities across the state, affordable housing for our workforce will continue to be a growing need. Therefore, I am recommending to reallocate $35.7 million within OneGeorgia to establish the Rural Workforce Housing Fund, allowing local development and housing authorities to prepare land for housing developments to support upcoming economic development projects and ensure our workforce has access to quality work and affordable housing opportunities.”

The plan calls for redirecting two existing pots of money that haven’t been spent on their authorized purpose. The governor’s budget proposal provides this language for the proposed redirect:

The governor’s proposal for the amended FY2023 budget provides:

  • “35,703,211 in reserved funds reallocated for the establishment of the Rural Workforce Housing Fund to ensure rural communities have the housing necessary to accommodate economic development projects.

The recommended change in DCA’s budget states:

  • “Reallocate the FY 2022 broadband infrastructure grant program carryover ($21,500,000) and FY 2022 Rural Yes Innovation Fund carryover ($14,203,211) to establish the Rural Workforce Housing Fund.”

Georgia’s tobacco settlement payments are part of an agreement between some tobacco companies and 46 states, four U.S. territories, Puerto Rico and the District of Columbia.

Tobacco manufacturers are to continue payments forever, in exchange for a release from the from “past and future legal claims for costs incurred by the states for smoking-related illnesses and death and for equitable relief,” according to an overview of the Master Settlement Agreement posted by the Public Health Law Center at Mitchell Hamlin School of Law.

Commercial buildings in Downtown Waycross could be retrofitted into affordable housing with funds from Gov. Brian Kemp’s Rural Workforce Housing Fund. (Credit: David Pendered, 2020)