DeSantis ally put on leave, under investigation at Florida housing organization

TALLAHASSEE, Fla. – The head of Florida’s affordable housing organization has been put on paid leave and subject to an inspector general’s investigation six months into his tenure as Gov. Ron DeSantis’ hand-picked leader of the multi-billion-dollar public corporation. 

Michael DiNapoli, executive director of the Florida Housing Finance Corp., was ordered to step away by the corporation’s Board of Directors Chair Mario Facella, according to sources familiar with the situation.

While state Senate President Kathleen Passidomo's office confirmed that there were "personnel matters" within the corporation, details behind the July 21 decision were not given. But DiNapoli, who could not be reached for comment, was told to stay away from FHFC’s Tallahassee office and is barred from email access.

The DeSantis-appointed board is scheduled to reconvene Sept. 8 and the organization’s inspector general’s report is expected by then to be finalized. DiNapoli’s future with the corporation will likely be an agenda item, said a half-dozen sources interviewed about the matter.

These sources say the investigation focuses on questions about DiNapoli’s management and accusations that he’s created a hostile work environment at FHFC, which has more than 130 employees.

A year marked by sweeping overhaul

The Florida Housing Finance Corp. already has undergone dramatic turnover this year.

DiNapoli was brought on in February to replace longtime executive director Trey Price, who resigned after six years at the helm of the organization, which is charged with promoting home ownership and affordable rental housing in a state becoming prohibitively expensive.

FHFC uses more than $2 billion of state and federal funding to create almost $6 billion in economic activity, according to a 2021 study of the agency by Florida State University.

FHFC has not publicly commented on DiNapoli or confirmed his departure. The corporation’s external affairs director, Amanda Prater, said only, “I’ll have to run it up the flagpole,” when asked by the USA TODAY NETWORK-Florida about his status.

She also didn’t respond to further email inquiries and a request for records related to her boss’s absence. DeSantis’ office also did not respond immediately to a request for comment on the matter.

On Monday, after this story was published, FHFC provided a copy of Facella's July 21 email informing DiNapoli that he was being put on administrative leave until Sept. 8.

Organizational chart in change

Angie Sellers, FHFC’s longtime chief financial officer, has stepped in as interim executive director. Hugh Brown, the organization’s general counsel and chief ethics officer, left in April and his successor, Betty Zachem, resigned Thursday.

All told, the management disruption comes at an awkward time for FHFC, which is central to the ongoing rollout of the largest investment for housing in Florida history.

The “Live Local Act,” signed into law by DeSantis in March, steers $711 million toward housing and rental programs, providing incentives for investment in lower-cost housing, and encourages more mixed-use developments in declining commercial areas across the state.

FHFC is the lead organization implementing the law, which was a priority of Passidomo, a Republican. The measure is aimed at easing a shortage of workforce housing worsened by the state’s soaring real estate market and shortage of rental property.

“The president’s office was made aware of the recent personnel matters at FHFC,” said Katie Betta, a Passidomo spokeswoman. “She is closely monitoring the implementation of Live Local.”

Eye-catching in the governor's office

DiNapoli had caught the eye of the governor’s office after working five years for the Department of Economic Opportunity, which is now incorporated into the state’s newly created Department of Commerce, led since June by J. Alex Kelly, who served closely with DeSantis as his deputy chief of staff.

DiNapoli was selected by the board in February after the governor urged then-Acting DEO Secretary Meredith Ivey to nominate him.

Now as Commerce chief, Kelly has a seat on FHFC’s board of directors.

DiNapoli stood out at DEO by guiding the state’s distribution of its share of the federal Homeowner Assistance Fund, which helped thousands of Floridians prevent mortgage delinquencies and defaults, foreclosures and utility shut-offs during the COVID-19 years.

The money came from the American Rescue Plan Act, pushed by President Joe Biden.

DeSantis, as a Republican presidential candidate, has been railing against Biden for such spending, saying COVID-era federal decisions drove inflation and undermined the nation’s economy.

Still, the governor has relied on federal COVID funds to finance many of his top Florida initiatives, including tax breaks, law enforcement pay raises and construction projects across the state.

Florida has so far spent more than $518 million to help 26,500 homeowners through the Homeowner Assistance Fund.

DeSantis had mostly drawn praise from housing advocates

While the upheaval at the housing corporation is troubling many in the industry, some say it also conflicts with what has been a generally positive view of DeSantis as a promoter of affordable housing.

Florida’s Republican-controlled Legislature had siphoned off $2.5 billion intended for affordable housing over the past two decades, using the cash in state housing trust funds to plug budget holes and pay for other priorities.

But DeSantis has largely put a stop to such diversions over the last couple of years, drawing praise from advocates. His signing of the Live Local initiative was viewed as a major, needed step.

Betta, with Passidomo’s office, said that FHFC has already held several workshops and webinars outlining how the new Live Local effort is aimed at spurring lower-cost housing. She remains confident in the corporation, Betta said.

“From President Passidomo’s standpoint, implementation is well underway and FHFC continues to lead that important effort,” she added.

John Kennedy is part of USA TODAY Network’s Florida Capital Bureau. He can be reached at jkennedy2@gannett.com, or on Twitter at @JKennedyReport.

This article originally appeared on Tallahassee Democrat: DeSantis pick on leave, under investigation at Florida Housing Corp.