Dozens of developers fail to build affordable housing after free land grants from Jacksonville

Downtown Jacksonville.

Jacksonville city land grants to developers in exchange for construction of affordable housing in the city have apparently not been fulfilled, and a City Council member is calling the situation a “huge scandal” that he tried to alert the city to nearly two years ago.

More than 170 mostly vacant land parcels primarily in downtown Jacksonville were granted to some developers and others in exchange for the promise that affordable housing would be constructed. An Action News Jax story this month showed out of the 62 entities that were given the land in 2019, only three actually turned the properties into affordable housing developments, according to a city Inspector General’s Office analysis.

Jacksonville City Council member Rory Diamond said he tried to raise alarms about the land giveaway program at least a year and a half ago. He told Florida Politics that the land grants have developed into a massive breakdown of government oversight.

“Eighteen months ago I blew the whistle on this,” Diamond said.

“I demanded to know from the (mayoral) administration why we weren’t taking these properties back and literally just giving properties away. They were supposed to build affordable housing and they did nothing. Some folks sold them for a profit and there’s still no affordable housing on them. It’s ridiculous. It’s a huge scandal.”

Diamond acknowledged he’s frustrated at the lack of any notable accountability for the land giveaways. The Republican Council member, who represents the Jacksonville Beaches area, added that what’s exasperating is that nearly all the properties that were granted are in the downtown area where Jacksonville officials have been pushing for urban renewal, which has been woefully sluggish.

The affordable housing commitment also comes as Jacksonville’s median household prices have exceeded $300,000 for the first time in recorded history this decade, according to figures kept by the Northeast Florida Association of Realtors.

The City Council Finance Committee discussed the land giveaway snafus at their regular meeting Tuesday morning. Diamond acknowledged that the scandal bridges the previous mayoral administration of Lenny Curry into current Mayor Donna Deegan, who was elected and took office a year ago, well after the land giveaways were initiated five years ago.

Finance Committee Chair Ron Salem said there were modifications to the program through council legislation in 2023. But he acknowledged that never accounted for the original property grants four years earlier.

“Clearly the 2019 legislation was flawed and allowed people to do things with these properties that I’m not comfortable with in terms of holding them, selling them, etc., and not developing them over some reasonable time,” Salem said.

Salem said city staff is already looking into the batch of properties granted in 2019. He admitted there’s a lot that needs to be explained.

“They are working diligently to address those and have some statistics on which ones have been addressed and which ones there are in lawsuits, etc. …Clearly, the legislation was flawed and the monitoring of the process could have been done more quickly to catch these problems. That’s what’s upsetting to me,” Salem said.

Terrence Freeman is another Finance Committee member and said at minimum, the situation raises many questions as to why the affordable housing was developed on city-granted land.

“The latest issue that we’re talking about is a scenario where government gets ahead of itself without the proper measures in place to assure how properties are going to be distributed, to who they’re being distributed and we have the accountability and the checks and balances to ensure that we’re being good stewards,” said Freeman, who is an at-large City Council member.

Ultimately, Diamond said there’s been no government oversight whatsoever and the program has spun out of city control.

“The vast majority of these folks never built any houses. But they pocketed the profits when they sold it (the land). In fact, one family alone has more than 30 of these properties. They figured out a way to game the system. That just stinks of corruption,” Diamond said.

He added that he’s turning to Deegan’s administration to step in and bring the situation under control and Diamond expects a thorough investigation from the Inspector General’s Office.

Diamond also said he expects the City Council to get involved and new regulations could be coming.

“We have to now craft legislation and craft more oversight to make sure this doesn’t happen anymore,” Diamond said, adding he’s not sure where the issue could lead. “We don’t know if this was inside-the-city corruption that allowed this to happen or if this is laziness by bureaucrats who never held anybody accountable. But we need to ask those questions. We need to get to the bottom of that.”

Florida Politics requested comment from Deegan’s Office. There was no immediate response as of Tuesday.

“We have people who can’t afford their first home. We have people who are homeless. We have people who can’t afford their rent. This is how you fix that problem and the city just completely failed,” Diamond said.

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Editor’s note: Drew Dixon’s spouse is an employee of Mayor Deegan’s administrative staff.