Tampa Bay Times

Apartment supply lags demand

Affordable housing stays out of reach | Editorial, Dec. 1

As the 2018-2019 president of the Bay Area Apartment Association, which represents the apartment industry in 12 counties around Tampa Bay, I note your editorial said that “almost 800,000 new renter households came to Florida from 2000 to 2017.” This highlights the increased demand for apartment homes but misses that supply hasn’t kept pace with this demand. According to the Florida Apartment Association’s (FAA) Housing Affordability Toolkit, about 48,000 apartment homes need to be built statewide each year to meet demand, but in 2018 only 40,000 were constructed; in 2017, just 32,000. Previous years saw even lower numbers, and the toolkit highlights multiple factors that have contributed to this. Land costs are up 76 percent since 2000. Construction costs are up 24 percent since 2004.

The steady rise of taxes and fees add to the cost of building and operating apartment homes. Together, these are formidable hurdles for apartment developers to attract the investors they need to build market-rate apartments, let alone much-needed affordable apartment homes offered at below-market rate.

To secure a greater supply of affordable housing that we all want, elected officials should work with developers to bridge the financing gap. As suggested in the editorial, providing city land at a discount is a good step — this lowers one of biggest upfront costs. Other key actions include waving impact fees, mobility fees, and non-ad valorem taxes, which, according to the toolkit, are the most effective methods for driving new development. Local government also should avoid further mandates on apartment homes that add mountains of paperwork, burdensome bureaucracy, and increased legal risks that drive up costs. Lastly, everyone should support full funding of the state’s Sadowski trust fund; while not a silver bullet, our present-day challenges would be less if the $2 billion diverted from that fund over the last several years had been spent on affordable housing, as it was intended.

Article last accessed on December 9, 2019 here. A print-ready version is available here.