South Florida Business Journal - 2/2/2007 12:00:00 AM
by Susan Stabley
Workforce housing advocates see 2007 as the year that talk turns to action, as a growing number of businesses say the impact to labor is becoming too much to bear.
At Palms West Hospital in Loxahatchee, 49 employees - about a third of its turnover in the past year - moved away, said Katie Kato, director of human resources.
Then there was the out-of-town job candidate who turned down a recent offer from the hospital because housing prices were out of reach, she said.
It's a scenario being played out throughout South Florida, as the costs of construction and land have pushed out many developers of inexpensive housing. Some contractors say current building costs render it difficult, if not impossible, to deliver anything less than luxury prices.
"I can't fix the price of concrete," Kato said. "How do I answer this question of affordability?"
Part of the answer has been government subsidies layered with tax credits sold on Wall Street, a financing strategy employed by affordable housing builders such as Pinnacle Housing Group and Carlisle Development Group, both based in Miami.
Yet, while affordable housing developers, including Pinnacle, are building at record numbers, it may not be enough for some businesses.
Mike Jones, president and CEO of the Economic Council of Palm Beach County, points out that affordable housing is the right fit for service workers - about 87 percent of all Palm Beach County jobs - since its rents are fixed for those who make 30 percent to 60 percent of an area's median income.
Yet, individuals eligible for workforce housing - described as those who make from 60 percent to as much as 150 percent in pricey Monroe County - remain underserved, Jones said.
"We have nurses who make $50,000 to $60,000 who can't afford a home," Jones said.
And not only is it nurses, but most of Palm Beach County's workforce. Nearly 90 percent can't afford homeownership, according to a 2006 Florida International University study commissioned by the Housing Leadership Council of Palm Beach County.
Jones' economic council, along with several of Palm Beach County's business groups and chambers, created the nonprofit Housing Leadership Council. The group recently hired Suzanne Cabrera as its first president and CEO, a full-time advocate for workforce housing. On Jan. 30, the group launched a Web site, as well - www.hlcpbc.org.
Their study showed that an additional 98,000 housing units, both rental and for sale, for those with low and moderate incomes, would be needed over the next two decades to meet future employment projections just in Palm Beach.
To put those numbers into perspective, consider the amounts historically built for low- and moderate-income households in the tri-county area.
Miami-Dade County is second only to Orange County for the number of rental units built under Florida housing programs. From 1982 to 2005, 24,838 units in Miami-Dade units were funded by the state.
That's more than double the units built during the same time period in Palm Beach County (12,040) or Broward County (10,336).
Pinnacle is one of the most prolific builders of subsidized rentals in the state, with 3,900 units completed or under construction in the past 10 years, including 312 units in Palm Beach County, 338 in Broward and 1,837 units in Miami-Dade.
Among the latest and nearing completion is the 179-unit Los Sueños, at 500 N.W. 36th St. in Miami. An additional 498 units in Miami-Dade and 402 units in Broward will soon break ground.
Pinnacle credits its success to tax credit programs, said David O. Deutch, one of its four equal partners. While there is more funding as a result of the real estate boom, construction became costlier.
"Where we could once build 200 units, now we can only build 100 units," Deutch said of the impact to budgets.
Still, more than 2,100 units planned by several developers may move forward this year in Miami-Dade, all tied to the county's unique documentary stamp surcharge, scheduled to sunset in 2011.
Miami-Dade officials, seeking a renewal of the surcharge dedicated to housing, may join forces with Broward County leaders, who want a similar funding model.
Several other affordable and workforce initiatives will be vying for approval from state representatives.
A push is under way to have the Legislature lift restrictions on Sadowski Act funds, a pot of more than $945 million generated from documentary stamp surtaxes that is capped at $243 million when it comes to housing uses.
Since 1992, the Sadowski Act has been a dedicated funding source for housing programs. It fuels the State Apartment Incentive Loan (SAIL) program, the State Housing Initiatives Partnership (SHIP) program and the Homeownership Assistance Program (HAP) among
In South Florida, the city of Miami has taken an aggressive tack. Miami Mayor Manny Diaz has pledged to bring $1 billion in affordable housing dollars by 2010.
The city's Department of Community Development is offering to provide gap financing for projects that have been awarded tax credits from the Florida Housing Finance Corp.
Priority will be given to rental projects that are under construction or in certain neighborhoods. They must not have already received funds from the city.
Developers have until March 5 to fill out a request for proposal with the Department of Community Development. Among the funds available to be tapped are the Community Development Block Grant, Home Investment Partnership program, SHIP program loan and the Affordable Housing Trust Fund.
City land is also being made available, about 43 scattered sites for single-family homes and a pair of lots for multi-family buildings.