Tuesday, March 04, 2014

Workforce housing Crisis in South Florida

1. “People follow jobs” and workforce housing Crisis in South Florida

Whereas FIU Metropolitan Center studies for Palm Beach and Broward Counties demonstrated a clear correlation between hosing demand and the economy of South Florida, their most recent study of Monroe County, the summer vacations place of Key West, shows ever further dismay. Startling statistics describe an aging population growing, as the working class is migrating out. For example, in 2006 the influx of newcomers continued (eight percent since 2005), but the overall Monroe County population decreased by six percent from 2000 to 2006.[1]
The ratio of paid workers is low relative to the national average. Monroe County’s per capita income only increased from $26,102 to $36,564, or six percent from 2000-2006, whereas the rest of the country saw a great booming economy. And interesting, household earning social security income increased 16 percent in the same time period. It can be said that more Americans are retiring and moving to Key West, while the working population of the community is leaving. But why would they leave the sun and fun of South Florida?
The Metropolitan Center suggests it’s not affordable. With raising housing costs and low paid salaries for services jobs, workers are not inclined to stay. The community’s schoolteachers, registered nurses, police and sheriff's patrol officers are making a median income of $52,000 per year. Yet, at these salaries people are unable to afford homes to live in.
Using normal baking standards, at that income rate, the average consumer is able to pay, with a five percent down payment, on a single median income home approximately $150,000, but in Monroe County that same house costs $550,000 leaving nearly $400,000 as an affordability gap. For multi-family homes it’s about the same. And rental properties leave the situation even bleaker: whereas at the same rate, monthly affordable rent (set at approximately 30 percent of monthly income after taxes) is approximately $1,300 and spaces available are approximately $2,500 leaving another gap of $1200.
            The irony becomes vindictive when you see the increase in the housing supply. From 1990-2000 Monroe County’s housing inventory increased from 46,215 to 51,617 units or 12 percent growth. Both new single-family (6,235 units) and multi-family (4,408 units) homes were constructed. In addition to condos and other vacation living spaces. Of course the problem becomes clear, as the workforce is forced out of the expensive homes in Monroe County, and the aging population is increasing to live their later years, there is no one there to take care of them. Also the vibrant young community is becoming old and rancid. Therefore, the county government needs to act. It should look at this series of recommendations including the interrelationship amount economic development, housing, transportation and land use in order to change the cycle and create a young vibrant society again.
            First essential recommendation is looking at the housing prices. What will go up must come down and the US is currently on the verge of a recession dictated by the housing prices nation wide. But regardless if the single median income home costs $550,000 were reduced to $400,000, it still would be unattainable to the average working class sales manager. So the county needs to develop local subsidies for regional housing. It can do this in several ways including:  capping rental property to make it more affordable, taxing the landlords of the new condo buildings to pay for workforce housing; and legislating an affordable housing law. If developers and real estate owners are unwilling to pay the tax, the city could enforce that each new building built have X number of units to the workforce population or for people who make below a certain income. The taxed funds could go into a land trust for the city to bid contractors to build its own rental properties, but this should be done at last resort, because there is an increased surplus at this moment of homes.
            The land trust could also be used to improve the local infrastructure. For example it could build better roads for areas outside of the main cities. That way, workers could purchase or live outside the area and drive in. But this doesn’t create a very high quality of life for them, as they will have to be living in their cars instead of enjoying the SOFL sun.
            Future issuance of building permits on the land should also be analyzed. The city government should be more vigilant to where the developers want to build. With a housing supply boom, it is up to the government to decide cites locations for the new constructions through issuing building permits in the appropriate locations. Now that the islands are productive, it is up to the state to manage its resources better.
Another possibility is vouchers offered to workers in particular fields to live in newly constructed buildings. Similarly to school vouchers, the housing voucher offered either by the State of Florida or the Federal government though the offices of Housing and Urban Development (HUD), could assist to off set the costs. A new formula would need to be developed and regulated for who would receive the housing voucher, ensuring the public good of housing meet the workforce demand.
If these housing vouchers were located in local areas where the city centers are located, new mix-use urban spaces could be developed in Key West. The city could create a new vibrant feel—eliminating the need for cars and recreating the true retirement community. This economic development model, creating the retirement community for the future, could spur further growth for the area. In so much that after the first housing crisis is addressed, the model for development, focusing on retirement homes, nurses, doctors and other workers would be attached to move to the area for work as will the retries will want to move to the ideal community to spend their latter days, could produce higher levels of growth.
Working with developers, maybe the best avenue for growth. New mix-use, smart growth concepts will also draw new business into the community. Where as the current housing shortage could turn into an asset if the community creates short term measures for long-term development ideas.
The city government and advantageous engaged people can build the foundation for changing policy. They need to create collaborations, partnerships and alliances between the developers, city government, NGOs, CBCs and organize a lending consortium for the working class to attain affordable mortgages. They can also help by creating an employer assisted housing program and use public education with these sad statistics do generate support.
Additionally, the Metropolitan Center has suggested creating employer-assisted housing (EAH), which engages the employer to pay with a collaborative model for their workers to live in the area. Furthermore, the county can legislate to build rental housing in targeted locations with aggressive land acquisition, regulatory incentives and provide positive economic befits to do so. Finally, the city maybe establish an affordable housing preservation programs whereby they target neighborhoods to rehabilitate existing old homes, by providing purchasing/rehabilitation incentives like tax relief.
If the old adage of “people follow jobs,” is added to the economic development model of catering to the elderly with an attainable quality of life, Monroe County has little to fear. The people, including the government, must make sure they are in control of its own development. It can off set the short-term housing crisis with legislating housing taxes for the working class. Also a land trust can be set up to create housing vouchers. The government can later develop permits for mixed use and smart growth development. Additional resources can aid to build infrastructure; fixing roadways can help attached more people to travel to the area as well as transport the working class. But of course, a consolidated and coordinated working plan is necessary as well as patients, because development takes time. If action is not taken, the housing gap could develop into an employment gap. Currently this is not the case. A pro-active population can control the situation with the various measures listed above to not only have a prosperous society but also one that can afford to live where they work.

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