County tackles cost of housing

Program for price-capped development falls short

Palm Beach County is searching for solutions to help teachers, restaurant managers and nurses find affordable housing when high rents and home prices are the norms in South Florida.

Suzanne Cabrera, president of Housing Leadership Council of Palm Beach County, said she hears far too often from moderate-income workers affected by the housing crunch. It’s hurting businesses needing to recruit entry-level employees, she said.

“It’s as bad as ever,” Cabrera said. “I dread getting my phone calls. I dread reading my emails. People need things we just don’t have. I am really worried about the effect it’s going to have long term if we don’t address it.”

The county launched an initiative in 2006 to require developers to set aside a certain percentage of new homes and apartments as pricecapped “workforce housing.” In exchange, developers could build more homes than allowed by county development rules. To qualify for workforce housing, a family of four would need to make between $40,740 and $95,060.

But that program hasn’t produced the number of affordably priced units county leaders envisioned. One reason is builders have elected to pay an $81,500 per home buyout fee instead of constructing the workforce housing.

Not one price-capped single-family home has

been built under the program. In its 12-year history, the program has produced 871 priced-capped apartments and 121 townhomes. Developers have contributed about $3 million into an affordable housing fund that commissioners are considering using to provide up to $38,500 in down-payment assistance for people looking to buy those below-market townhomes.

Now, county commissioners are looking at adjustments to the program that a consulting firm says could spur the development of affordable housing. One proposal would raise the developer’s buyout fee for a workforce home to $120,000. Developers would be granted even more density for building workforce housing, potentially doubling the density of their projects. An exchange would be created that would allow builders to partner with affordable housing developers to satisfy the requirement.

Housing prices throughout South Florida are rising. In Palm Beach County, an average apartment rents for $1,370, and the median price of a single-family home is $345,000. In Broward County, an average apartment rents for $1,858, while the median sales price for a home is $335,000. Miami-Dade tenants pay an average of $1,618, and the median price for a home is $332,500.

Other communities are crafting plans to help lower-income workers afford housing. Miami-Dade recently unveiled a proposal to build affordable housing for teachers next to schools in high-rent neighborhoods.

Home prices under Palm Beach County’s workforce housing program can range from about $142,000 to $264,000. That price range gets adjusted through the years, based on the county’s median family income.

Rental rates for homes built under the workforce housing program are also capped. For example, monthly rental prices allowed for a two-bedroom apartment under the program could range from $972 to $2,268.

The county’s consultant — BAE Urban Economics — wants to adjust the program to provide a minimum 10 percent profit margin for builders, an effort to ensure that it would be lucrative enough for developers to actually construct priced-capped housing.

Industry groups aren’t totally on board with the plan. Skeet Jernigan, president of the Community and Economic Development Council, said it shouldn’t fall solely on builders to pay for affordable housing efforts when restaurants and hotels don’t pay a wage that allows people to afford housing.

“You are never going to solve workforce housing by expecting to finance it solely on the back of the builders who build housing in the community,” he said. “It has to be a countywide effort, and other segments of the economy must be involved or this process will totally, totally fail.”

It’s also possible the county’s efforts could carry unintended consequences, Jernigan said. Additional costs — such as higher fees — will be passed on to the buyers of homes not in the county’s workforce program, he said.

Allowing developers greater density could create disputes, too, with neighbors, Commissioner Hal Valeche said.

Commissioners are reviewing the proposals and will likely decide in coming months on how to alter the program.

“If we do this properly, the builders can be profitable with both market rate and affordable units,” Valeche said.

FILE PHOTO Palm Beach County is looking at ways to spur the development of affordable housing.