The lack of affordable housing threatens the economy

WEST PALM BEACH, Fla. (AP) — Palm Beach County’s lack of affordable housing has begun to hamper the growth of its economy, to the point where its recent expansion is in jeopardy, speakers at a housing summit said last week.

Some firms interested in moving their headquarters to Palm Beach County have put their plans on hold until the situation improves, Kelly Smallridge, executive director of the county’s Economic Development Board, said as she attended a panel Thursday at the Palm Beach County Convention Center.

One company even explored the possibility of buying a house for its employees but couldn’t do so because of the cost, she said.

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Downtown West Palm Beach on April 14, 2021

Smallridge said some employees resigned days after they were hired because they couldn’t find housing that matched their salaries.

“We offer competitive wages,” said Clinton Forbes, executive director of Palm Tran, the county’s bus system, “but we’re having trouble hiring and retaining employees. People want to live where they work and that is difficult for our drivers.”

The starting salary for bus drivers is $65,000 — enough to buy a home that costs about $200,000 on a 30-year mortgage, according to online calculators.

Only a fraction of new housing in Palm Beach County is budget-driven by “workers.”

Analysts have put the lack of affordable housing in the county at tens of thousands of homes, condos, or apartments. In the past five years, the county has created about 1,000 workers’ shelters, a number that County Commissioner Mack Bernard has in the past called grossly inadequate.

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“It will take us all to preserve paradise,” said District Administrator Verdenia Baker, noting that the district’s population has grown from 863,503 in 1990 to over 1.5 million.

Demand for housing has pushed the average home cost to more than $600,000, Baker found, almost four times the 1990 level.

Thursday’s summit came as commissioners are considering asking voters to approve a referendum in November on $200 million in bonds to build more affordable housing for workers. Bernard, a panelist, said approving the bond will help create more capacity.

“We need this badly,” he said, noting that prices will come down as more units are built. Other commissioners have questioned the prudence of seeking the bond at a time of high inflation and with monies from previous county housing funds unspent.

Bernard, who represents Riviera Beach and parts of the central area of ​​Palm Beach County, also acknowledged that the county needs to “use current dollars more effectively.”

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High rise condominiums in West Palm Beach

Some want to hold a $200 million vote on real estate bonds

Jack Weir, president of Eastwind Development, another panelist, said the bond issue will provide a special source of funding for developers.

He expects the funds to be used as “gap” financing, which provides soft loans to pay for some of the construction costs of apartments and condos. The builders would have to reserve some apartments at market prices.

The county’s worker housing program is designed to create housing that people in essential jobs like teaching, nursing, and public safety can afford.

The rents that may be charged by the developers involved are linked to household income: the lower the income, the lower the rent. These rents are between 60% and 140% of median family income.

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Rents for a one-bedroom apartment, for example, must be capped at $1,318 for households earning up to $63,280. The rent can increase to $2,306 for a household with an income of $110,740.

The county requires new housing developments to reserve a percentage of their units for income-earning households. In return, developers can increase the density of their projects, sometimes doubling what the zone code allows. Rental limits apply to units between one and four bedrooms.

For the areas without their own legal personality, the guidelines of the district apply. Some municipalities have their own guidelines.

Nick Rojo, President of Affiliated Development, noted that any solution must come from the local or county level. “We can’t rely on Tallahassee,” he said.

Weir noted that the state legislature has often taken money from a state housing fund to balance the state budget. Backed by the state’s Republican-led legislature, Gov. Ron DeSantis signed a bill in 2021 to divert half of Florida’s Affordable Housing Trust fund — known as the Sadowski Fund — to fund sanitation systems and sea-level rise projects.

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Weir and Rojo said developers also need to do a better job of addressing the “not in my backyard” argument, which aims to discourage city, township and village officials from approving denser and taller developments, such as apartment buildings, in single-family home-dominated neighborhoods.

“We need to make sure the future tenants of these apartment buildings are represented at public hearings,” Weir said, “so that elected officials understand that there are two sides to this situation.”

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