September 17, 2019

Real Estate

Affordable housing in Florida: Déjà vu, all over again

As the economy has recovered, affordable housing is again an issue in many parts of Florida.

Amy Martinez | 10/26/2018

Supply and Demand

The Orlando Sentinel reported that approximately 8,000 prospective tenants inquired about 201 available units when the Pendana at West Lakes development, a mixed-income apartment complex of one- to three-bedroom apartments, opened near Camping World Stadium. The complex, now completely occupied, has stopped taking applications. It was developed by a partnership of affordable housing groups and features a mix of market-rate and rent-subsidized units. Orlando ranks among the country’s toughest housing markets for the lowest-income renters, according to the National Low Income Housing Coalition.

The same supply/demand dynamics are playing out in South Florida. Over the past five years, the region’s population grew by 369,000. During the same period, 42,388 apartment units were built. That’s one unit for every 8.7 net new residents, according to Cushman & Wakefield.

THE RESPONSES

Targeted Building

In Miami-Dade County, the school system and housing department are considering whether to build housing for teachers as part of a new school in the Brickell area. The county is discussing the idea with federal officials. Meanwhile, JPMorgan Chase has given a grant to a non-profit to develop plans for a separate project that would involve building 300 apartments on the campus of an elementary school north of downtown, according to the Miami Herald.

Regulatory Set-Asides

Since 2006, Palm Beach County has had a program that allows developers to build at increased densities if they include a percentage of price-capped, workforce housing units as part of their developments. The program has largely failed, producing about 870 apartments and townhomes but no single-family homes. Developers have chosen to pay an $81,500 "buyout fee” instead of building the workforce housing, according to the South Florida Sun-Sentinel. County commissioners are now considering whether to raise the buyout fee and offer developers even greater density, and a consultant has recommended offering developers a guaranteed 10% profit on the affordable housing units.

Help from the State

In addition to federal programs administered by the state, Florida has two major affordable housing programs: The State Housing Initiatives Partnership (SHIP), which gives money to cities and counties to provide homeownership and rental assistance to low- and moderate-income residents, and the State Apartment Incentive Loan (SAIL) program, which provides low-interest loans to developers to build affordable rental housing.

Both programs fall under the Sadowski Act trust fund, which the Legislature created in 1992 as a dedicated funding source for housing programs using doc stamp revenue from real estate transactions. For the first 10 years, the Legislature routinely appropriated all the money in the Sadowski fund to affordable housing. In 2003, however, the Legislature began diverting money in the fund for other purposes, and in 2005, it set a limit on the amount of doc-stamp revenue the Sadowski fund could receive at $243 million a year. (Because this was during the housing boom, annual doc stamp revenue ranged from $450 million to $600 million, well above today’s levels.) Although it repealed the cap later, the Legislature has continued to divert money from the Sadowski fund for other purposes.

Since 1992, more than 207,000 housing units statewide have received assistance under SHIP and more than 75,000 units have been financed through SAIL, according to the Florida Housing Finance Corp., which administers the programs. In all, $4 billion of Sadowski money has gone to providing affordable housing, while $2 billion has been swept for other purposes, translating to about 165,000 units foregone.

"It’s become the norm to use the trust fund for member projects or to fill deficits," says Jaimie Ross, executive director of the Florida Housing Coalition, a Tallahassee-based non-profit that advocates for affordable housing. "Fortunately, this may be coming to an end."

State Sen. Kathleen Passidomo, R-Naples, plans to introduce a bill next year to stop the raids on the fund. Ross says she’s encouraged that affordable housing has emerged as a top political issue this fall. "We expect there will be more than $300 million in the state and local trust funds for 2019-20, and we need every penny of it and more," she says.

Printed Homes

3-D printing involves using heat and force to fuse materials like powdered metals and plastic. The process doesn’t require injecting the materials into a mold or carving an object out of a block of material. Instead, metal or plastic is applied layer by layer until the object emerges. The "printer” allows for control and precision and produces very little waste. 3-D printers are now used routinely to manufacture items like engine parts and prosthetics, including dental implants.

Since the mid-1990s, researchers have experimented with ways to apply 3-D printing technology to construction. In recent years, builders in China, the Netherlands and the U.S. have produced small buildings in which concrete is applied, layer-by-layer, until the basic structure is completed. In some cases, a crane-like robot with an arm lays down the concrete; in others, a gantry-like structure allows an applicator nozzle to move around, dispensing concrete.

The relevance of the technology to affordable housing is its potential to reduce construction costs. Less than two years ago, a company called Apis Cor printed a 400-sq.-ft. home in Russia for about half the cost of traditional construction. In March, a non-profit in Austin called ICON unveiled a 3-D printed home using a printer it says can produce a 600- to 800-sq.-ft. structure in less than 24 hours for less than $4,000.

Tags: Real Estate

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