Affordable Housing in Florida

Financing

What makes the housing affordable is a decrease in monthly rent so that the income eligible household can pay less for the housing than it would otherwise cost at “market rate”. Lower monthly rent payment is a result of  affordable housing financing. The financing of affordable housing is made possible through government programs such as the Low-Income Housing Tax Credit Program (referred to as the Housing Credit program by the Florida Housing Finance Corporation), SAIL (the State Apartment Incentive Loan Program) and SHIP (State Housing Initiatives Partnership) program.

Affordable rental housing is built by the private sector, sometimes by the very same companies who also build market rate housing. The affordable apartments are physically indistinguishable from market rate apartments. In fact, affordable rental housing is so well built and situated in Florida that the governments providing subsidy for the development need to ensure that the property will remain affordable long term or in perpetuity. The properties can easily be sold for market rate housing as soon as the restrictions keeping the rents affordable expire. It is incumbent on the government body providing subsidy to ensure that government contributions are conditioned upon long term or perpetual affordability.

In Florida, affordable housing developments often carry at least a  50-year land use restriction agreement which requires the development to have professional management, substantial resident amenities and services, and meet strict compliance standards as to the eligibility of the residents and the condition of the units.

Most of the affordable housing need in Florida is for rental units.  But an important piece of the affordable housing continuum is homeownership. The SHIP program in particular helps lower income households to become first time home buyers by providing down payment and closing cost assistance. Typically, when a household can move from renting a market rate apartment into an affordable home, the household has a lower monthly mortgage payment than it spent on rent each month. And the fixed rate mortgage provides stability with a savings plan and the wealth building that often comes from home equity.

How is Affordable Housing Developed?

Affordable Housing improves the economic health of the community and enhances the livability of the community for everyone.

When a community has dilapidated housing, or people living on the streets, the entire community suffers. Those who are in the dilapidated housing or without any housing certainly suffer the most. But inadequate housing affects everyone in the community. None of us want to explain to our children why one of the richest countries in the world has people living in shacks or without homes at all. Some would argue that adequate housing is a moral imperative as much as a legal obligation for local governments to comply with the Housing Element law. A deficit of affordable housing and rising market rate rents leads to an increase in people experiencing homelessness from the economic strain of housing costs.

Aside from the legal obligation to provide housing for the entire current and anticipated population, every local government in Florida should provide a mix of housing so that it can continue to grow economically. When new industries evaluate a prospective community, one of the factors they consider is whether adequate  housing is available for employees. New industries provide jobs and a substantial ad valorem tax base. To attract new industry and raise the ad valorem tax base of  the community through the development of nonresidential properties, there must be an adequate inventory of affordable housing. In some communities, where housing is extremely expensive, such as the Florida Keys, Naples, and any number of other waterfront communities, there is a very real threat of losing basic services such as teachers and police protection due to a lack of affordable housing.

Regulatory Reform

Reforming regulations that add to the cost of housing is an essential local government tool. But housing quality must be maintained while costs are reduced. If too many reliefs from regulation are granted simultaneously, such as reduced setbacks, combined with narrow streets, and on-street parking, the quality of the development will be reduced, giving the neighborhood a legitimate reason for opposing the development. But regulatory reforms that are balanced and provided as a matter of right will increase the delivery of affordable homes.

When the SHIP program was enacted in 1992 in the William E. Sadowski Affordable Housing Act, it provided that the funds would be  distributed on a population-based formula, as grant monies to local government for the production of affordable housing.  But it came with certain statutory parameters and some conditions.  One of those conditions is that local government do its part to reduce the cost of housing by expediting permits specifically for affordable housing.

“Permits” are defined broadly in accordance with  Section 163.3164 (7),(8), Florida Statutes:

A permit is a development order which means any order granting, denying, or granting with conditions an application for a development permit. A development permit includes any building permit, zoning permit, subdivision approval, rezoning, certification, special exception, variance, or any other official action of local government having the effect of permitting the development of land.

When local government submits its annual SHIP report to FHFC it must include a dollar estimate for the increase in housing costs associated with the adoption of land development regulations during the preceding year. To accomplish this local government will need a housing economic impact assessment each time it adopts an ordinance so that an annual tally can be made. This process does not prevent local government from adopting ordinances that increase the cost of housing, but it does insist upon an awareness of the consequences for affordable housing from the various changes to the land use and permitting processes.

Who Lives in Affordable Housing?

Affordable housing is sometimes referred to as “workforce housing”. This is because affordable housing serves the needs of people employed in the jobs that we rely upon to make every community viable. They are people such as teachers, teacher’s aids, nursing assistants, medical technologists, retail workers, government employees, emergency services providers, and law enforcement. They are also the service workers that our tourist economy relies upon for hotels, restaurants, and all manner of essential services that pay very low wages.