Speculators, low wages tipping housing balance

There’s a wide gap in Southwest Florida between the cost of housing and what many residents can afford, and it’s going to take a joint effort by government and the private sector to narrow it.

That was the theme that emerged when a wide range of panelists talked about affordable housing Thursday at a Lee County Horizon Council Affordable Housing Symposium. The meeting was the latest attempt to find solutions to what is widely being termed an affordable housing crisis.

“Let’s define the problem. Very often I hear people say they don’t exactly understand affordable housing,” said Don Upton, the event’s moderator. “People don’t know if it’s a long-term problem, a short-term problem, how does is affect the county’s competitiveness in the market, what are the best practices sustainable over time.”

James Nicholas, professor of urban and regional planning at the University of Florida, pointed out forces that have caused the market shift.

External demand, much of it from real-estate speculators, has created an imbalance between supply and demand and skewed prices upward, putting most homes beyond the reach of local residents.

Incomes in Lee County grew at an average of 31 percent from 2000 to 2005. Housing prices grew 158 percent, Nicholas said.

Another telling statistic is that almost 113,000 Lee households earn an average of $36,368 annually, Nicholas said. Housing is considered affordable if it doesn’t account for more than 30 percent of a family’s income, meaning those households can afford to pay a maximum of $122,225 for a home.

The median Lee County home price is more than $289,000.

Buying a house at that price would require a household income of about $89,489, Nicholas said. Close to 90 percent of the county’s households do not earn that much.

“The problem here is where is the future labor force going to come from for hospitality, tourism, education and essential services?” Nicholas said. “If we try to raise wages you are going to need very high wages.”

Part of the solution could come from employers, said Beth Marcus, a consultant and former Fannie Mae employee. Helping employees buy houses not only helps the workers, it is also good for their employers, she said.

“If you are an area hospital,” Marcus said, “you are going to be interested in employee housing if it helps you retain nurses because you need nurses to continue providing the service you do.”

Employer assistance for housing can come in a variety of forms and can involve buying or renting a home. Options include discounts negotiated by the employer with an outside entity or outright or matching grants.

Marcus said some employers she has worked with have offered employees interest-free loans or matching funds to employees who agree to stay longer than three years.

“If they leave before that time, they have to pay the loan back. Or the employer can offer to match to a certain level what the employee has saved in three years,” Marcus said. “But for an employer trying to recruit, those strategies wouldn’t work. They would have to offer something up front.”

Marcus’ presentation ties in with recently passed state legislation, said Jamie Ross, affordable housing director for 1000 Friends of Florida.

“Part of what did pass (in the legislative session) was a measure encouraging employers to have a housing-assistance program as part of a strategy of recruitment and retention,” Ross said.

Southwest Florida isn’t alone in facing an affordable housing crisis. James Carras, president of the Broward Housing Partnership, presented a case study of his county.

The county lost 22,000 rental units in the last two years to condominium conversions and Hurricane Wilma, he said, giving the county the lowest rental vacancy rates in the country.

“If you think you have a problem here, I have bad news for you from the other coast,” he said.

For Broward and other high growth counties, the state has created the Community Workforce Housing Innovation Program, said Nancy Muller, policy director for the Florida Housing Finance Corporation.

The pilot program will provide $50 million to develop housing for essential personnel in communities. The program hopes to encourage counties to come up with innovative solutions for affordable housing, she said. The program will require long-term affordability of units, both rental and owner-occupied, in return for funding.

“This is the opportunity to bring folks together and get funding to assist in keeping essential personnel here, to encourage local governments to work on regulators barriers that affect affordable housing and to create a non-traditional public-private partnership,” she said.

When they started the campaign for a documentary stamp tax for housing money in 1992, Ross said, advocates used to wear buttons that said, “Housing equals jobs.”

“Today the slogan is still true, but it means something completely different,” Ross said. “Today housing means being able to hold on to your employees and keep jobs here.”