Palm Beach County looks to other
regions for affordable housing plans
By Andy Reid
Palm Beach
Sun-Sentinel
January 17, 2006
Despite years of
skyrocketing home prices and "Coming Soon" signs mushrooming across
Palm Beach County, builders warn that a proposal requiring more affordable
housing could price them out of town.
But housing
officials in other high-priced parts of the country contend similar rules help
ensure there are homes for teachers, police officers and other moderate-income
workers communities need.
Creating
affordable housing has been part of the price of doing business in Montgomery
County, Maryland for more than 30 years -- resulting in more than 11,000
reduced-price homes in the suburbs of Washington, D.C.
More than 100
communities, mostly in California, followed Maryland's lead and instituted
similar affordable housing standards. Last year, Tallahassee started requiring
new neighborhoods to include housing priced for low- and moderate-income
residents.
"There are
some upsides and downsides ... but it gets them into the marketplace,"
said
Local housing
industry concerns stalled an effort this month to make Palm Beach County one of
the first Florida communities to require developers to include reduced-price
homes in new neighborhoods.
Builders argued
the economic ramifications of limiting prices on 20 percent of new homes would
be too costly.
Palm Beach County
already has a voluntary affordable-housing program, which allows developers to
build more homes than usual if they limit some prices. However, after more than
a year, the program has failed to produce any affordably priced new homes.
"Voluntary
doesn't work," said Deputy County Administrator Verdenia Baker, who is
leading the effort to craft new mandatory affordable-housing guidelines.
"We have to try something. ... We can't wait."
Pricey problem
Past housing
efforts focused on the poor. But with median home prices in Palm Beach County
now at $400,000, county officials plan to create more homes for people making
up to $75,000 a year.
Officials
proposed requiring 20 percent of new homes be affordable, which the county
considers up to $275,000. Builders then would get to build more homes than
otherwise allowed on the property.
The rules were
supposed to let developers "buy out" of the affordable housing
requirement. The county would use the money to build reduced-price homes
elsewhere.
But requiring
builders to include affordable housing will drive up the costs of other homes
in new neighborhoods by as much as $22,000 to $44,000 per home, making it
harder for more people to afford homes, said Edie Ousley, spokeswoman of the
Florida Home Builders Association.
"Someone is
going to subsidize the home ... and it is going to be the market-rate home
buyer," Ousley said. "Middle-income families are effectively squeezed
out."
Building-industry
representatives contend the new rules will reduce profits and scare off
developers. They say building more homes than otherwise allowed would not
compensate for the cost of including affordable housing.
A reduction in
the number of homes built each year could be an "unintended
consequence" of the affordable-housing proposal, said Jeff Spear,
president-elect of the Gold Coast Builders Association.
"It has a
serious dampening effect on the housing market," Spear said. "A new
homeowner should not be used to subsidize affordable housing."
Crying wolf?
Housing officials
in Montgomery County in Maryland heard those same concerns 30 years ago when
they first required developers to include reduced-price homes, said Minton, of
the Housing Opportunities Commission there. Montgomery County requires limiting
the prices on up to 15 percent of the homes at a new development. Developers
then get to build about 22 percent more homes than usually allowed, he said.
Montgomery County
also created a housing fund, fueled by taxes on real estate sales, to help pay
for affordable housing, Minton said. The county developed a 13-story,
mixed-income apartment complex built on top of a county parking lot and metro
station where monthly rents range from $400 to $3,500, Minton said.
Requiring
developers to include some affordable housing doesn't "solve the
problem," but it is one of the necessary tools to provide more
opportunities for more residents to afford a home, Minton said.
"There is
more economic integration," Minton said. "You had mixed-income
communities and it kept the supply of affordable housing growing."
More than 100
communities, mostly in California, have their own rules requiring developers to
build affordable homes, according to a Montgomery County study. In California,
communities as small as Isleton, with 1,000 residents, and as large as San
Diego, with 1.2 million residents, have housing requirements, the study shows.
New York and some
California cities use rent control to preserve affordable housing. Rent control
and "rent stabilization" rules limit rental rates in hot housing
markets.
"The new
solutions look more toward addressing ... the inherent inequity in the
market," said Chris Bender, spokesman for the affordable-housing advocacy
organization Housing California.
Political
pressure
In October,
Tallahassee started requiring developments with at least 50 homes to reserve 10
percent for affordable housing. The city's program sets the maximum price for
an affordable home at $159,378, which can be adjusted annually.
Protecting and
creating affordable housing requires communities to use a variety of tools,
said Anne Williamson, of the University of Florida's Schimberg Center for
Affordable Housing.
She said creating
land trusts and requiring developers to include affordable housing in new
neighborhoods can address the problem.
Palm Beach County
commissioners agreed in November to form a land trust to acquire property that
could be used to build affordable homes. The land trust also could buy mobile
home parks, apartment buildings and other existing rental units to protect them
from pricey redevelopment.
Baker said a new
proposal could go before the County Commission next month, but builder
representatives continue to object to limiting prices.
If approved by
the County Commission, that requirement would apply only to new developments in
the unincorporated areas. Baker said county leaders plan to push for local
municipalities to enact similar, mandatory guidelines.
"It is not
happening on its own," County Commissioner Karen Marcus said. "I
think everybody needs to be at the table."
Andy Reid can be
reached at