Housing situation in Lee County ‘rough, getting worse’

Rough and getting worse.

That’s how a housing leader described the housing environment in Lee County for lower- and moderate-income households.

Benjamin Toro-Spears of the Florida Housing Coalition, an authority on affordable housing, spoke at Friday’s meeting of the Horizon Council, which hosted a discussion on attainable housing.

The Horizon Council is a public-private board that advises Lee County commissioners on economic development issues.

Toro-Spears, in his remarks, cited the 2018 Attainable Housing Report. The $10,000 study was prepared by the Florida Housing Coalition on behalf of the Lee County Attainable Housing Coalition, a group that seeks to increase the number of attainable housing units.

The report was funded equally by the Horizon Foundation and Bonita-Estero Area Board of Realtors.

It’s important not to look at housing in a vacuum, he said, noting it has wide-ranging implications for the business community and the area’s “long-term fiscal resilience.”

Addressing the housing issue isn’t a matter of how, but when to take the necessary steps. “The solutions are pretty concrete,” he said. “We know what works.”
Toro-Spears addressed the basics of the challenge, selected findings and proposed solutions.

The basics involve looking at the answers to these questions: How much is a household earning? Can people find an affordable place to live, either by renting or buying? If an affordable place can be found, where is it and what’s the commute time to work? If not, what can be done?

“Spoiler alert: we do need to do something about it,” he said.
Toro-Spears defined affordable housing as housing that is affordable given a household’s income.

The attainable housing report addresses those who earn 80 to 140 percent of Lee’s median income. A two-person household at 120 percent, for example, collectively earns $61,200, the report states.

Attainable housing, he said, can be well designed with high-quality construction, only smaller than what many consider conventional housing. Single-family homes, too, can be affordable with subsidies, whether that’s through Habitat for Humanity or other programs.

Toro-Spears discussed the “housing cost burden,” which kicks in if such costs account for 30 percent or more of income. When it does, people must sacrifice spending in others areas, from food to health care.

In Lee, 28 percent of homeowners and 45 percent of renters spend 35 percent or more of their income on housing. Toro-Spears said the relationship between housing and transportation costs shouldn’t be lost in the equation.

Workers may be able to buy or rent a place farther away — Lehigh Acres or north Cape Coral — from where most people work. However, living there incurs greater costs in gas, car insurance and time, plus it clogs primary roads during peak commute times.

Panelists discuss

Mitch Hutchcraft of Habitat for Humanity said it’s clear in his conversations that “not everybody understands that we have a problem.”

Among the challenges he sees: availability of inexpensive land availability in good locations; the “Not In My Back Yard” crowd that take stands against affordable housing; and the amount of government regulation.

John Talmage of the city of Fort Myers acknowledged it’s necessary to “deconstruct the permitting process,” to make it easier: “Whatever costs time costs money.”

Jason Brewer of BB&T said the mortgage crisis brought tougher lending standards, making it more difficult for lower income families to qualify for a mortgage.

“As heavily regulated as we are, that level of regulation went through the roof after the recession, but it has made the process a lot more onerous,” he said.

Lower income families were also more likely to face foreclosure or bankruptcy in the past decade, tanking credit scores and introducing more barriers to qualifying for a mortgage.

“For those who can, that perceived increased risk results in a higher rate,” Brewer said.

However, “some of the standards have started to loosen up,” with some buyers able to put down as little as 3 percent.

Michelle Zech of Lee Health said it’s important that the county and cities include the business community in discussions and get their feedback as they address these issues.

“Collaboration with employers is going to be critical,” she said.

A Lee Health survey of entry-level staff revealed 47 percent spend more than half their paycheck on housing.

The top employer in the county with more than 13,000 employees, it routinely has hundreds of job openings, with the number expected to increase as new facilities open or expand, including at Gulf Coast Medical Center in south Fort Myers and at Coconut Point in Estero.

While Florida Gulf Coast University and Florida SouthWestern State College are graduating nurses, Lee Health is concerned with attracting and keeping them.

“Lee Health relies on new nurses,” she said. “If they are here and graduate, they may be living with their parents. Can they afford to buy here and not live with their parents forever?”

Toro-Spears said it’s hard to capture the scale of the housing issue, with the attainable housing report not even addressing those workers on the lowest end of the spectrum. Those workers, cashiers and others making perhaps $9- 12 an hour, may rent a room or share a place with several other people.

“That ‘stacking up’ reality is often uncaptured in the data,” he said. “There’s a real challenge here.”

Toro-Spears touted what he called “place-based investment.” That involves finding a chunk of inexpensive land and building something that would appeal to a host of diverse incomes.

This approach requires multi-sector investment and capital resources which could include partnering with the transportation and health care sectors, as well as local government.

“That’s where you can really make a big difference,” he said. “If you can identify a community that’s ripe and create the economic conditions around it, you can create an environment where lower income households can afford in that community.”

Talmage called the city’s planned midtown project such an investment, “the jewel that we’re baking a lot of things into,” with the potential for as many as 3,000 new housing units close to downtown.

“Midtown is a great opportunity to get this right before costs get out of control,” Toro-Spears said. “Once the market takes off, it’s hard to catch back up.”

While Midtown is one solution, Toro-Spears said there are “tons of opportunity in Lee County” for this approach.

What about tiny homes, though? A question-and-answer session prompted such an inquiry.

“People love tiny homes,” Toro-Spears said. “Thank you HGTV.”

There are a lot of tiny home prototypes, so scaling it can be a challenge without some degree of uniformity. While it can play a role, he said it targets a “very narrow segment of the market.”

It can be more affordable, but once you factor everything in, including land costs, “it gets surprisingly expensive for the square footage you get.”

Proposing solutions

Toro-Spears of the Florida Housing Coalition proposed many solutions, such as:

Impact fees: Local government should collect these fees on a “square-foot” basis rather than on a unit basis to encourage construction of smaller units. Such fees pay for all or a portion of the costs of providing public services to a new development.

Accessory Dwelling Units: Reduce the minimum lot size to build ADUs, sometimes called “granny flats.” Attainable housing liaison: The county should hire such a person to help people overcome regulatory hurdles and deal with permitting and zoning issues. The city of Fort Myers is hiring for such roles. Be flexible: Allow flexible lot configurations, including zero lot-line options.

Community Land Trust: Adopt such a model, which allows a nonprofit to hold title to land, but not the title to the structure atop it. Separating the two can allow for more affordable options.

Inclusionary zoning: Local government should require a percentage of new multifamily units are set aside as attainable to the workforce population.

Housing trust funds: These can be used to increase the amount of money dedicated to attainable housing in the county.

Low-Income Housing Tax Credit: Encourages tax credit development via strategic partnerships. It is the federal government’s primary program for encouraging the investment of private equity in the development of affordable rental housing for low-income households. It can be complicated. “It takes a little time, but you can do it.”

Opportunity Zones: a small provision in the December 2017 tax reform bill. It’s a tax incentive in which investors can put unrealized capital gains into a fund. It can act as a write-off for capital gains.

Article last accessed on May 31, 2018 here. A print-ready PDF is available here.