Growth & Infrastructure Consortium

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Clementine Campbell
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1 AFFORDABLE HOUSING IN FLORIDA: Let the Market do it. James C. Nicholas, Ph.D. University of Florida Growth and Infrastructure Consortium Bradenton, FL November 13, 214 1

2 Florida s Housing Policy It is the intent of this act to assur[e] that by the year 21 each Floridian shall have decent and affordable housing. This strategy must involve state, regional, and local governments working in partnership with communities and the private sector and must involve financial as well as regulatory commitment to accomplish this goal. GOAL.--By the year 21, this state shall ensure that decent and affordable housing is available for all of its residents (set in 199). 2

3 Two Thrusts of Florida Housing Program 1. Local requires all local governments to have Housing Elements, that set out how the local government is going to meet the housing needs of its entire current and anticipated population, including low, very low income, special needs populations, farmworker housing, group homes, and foster care facilities. In addition to the Housing Element, they must also adopt a Future Land Use Map, which identifies adequate sites for affordable housing; this requirement is interpreted to prohibit, for example, the exclusion of multi-family housing from the jurisdiction. 3

4 State 1. William E. Sadowski Affordable Housing Act, documentary stamp tax paid on the transfer of all real estate in Florida -- Housing Finance Corporation 3% and 7% to the local housing trust fund to be used by local governments under the State Housing Initiatives Partnership program (SHIP) created within the Sadowski Act 2. A 1 per $1 real estate doc stamp adopted in In 27 the Legislature capped funds going to housing at $243 million, with no increases since. In 211 this cap was removed. This allowed an additional $4 million for housing, which was promptly swept into the general fund. 4

5 Florida s HFA Florida Housing Finance Agency receives 3% of Sadowski funding for First Time Homeowner Assistance Moderate Income Homeowner Assistance Moderate Income mortgage assistance State Apartment Incentive Loan Program State Elderly Loan Assistance Program Multifamily Mortgage Revenue Bonds Low Income Housing Credits 5

6 Results The state and local programs have put forward above $1 billion in public funds, Which has attracted over $3 billion in private funds For a total of some $5 billion towards affordable housing since 199 6

7 But 1. local government ad hoc set asides for affordable/workforce housing have largely been discontinued 2. The State s Development of Regional (DRI) program had been defanged and is subject to repeal. 7

8 Florida HFA/DCA Two Agencies were charged with responsibility; Florida Department of Community Affairs, and Florida Housing Finance Agency IN 211 the FL Department of Community Affairs was transferred as an agency of the Florida Department of Economic Opportunity and no longer exists. The Florida Housing Finance Agency continues to function 8

9 Florida DRI Process Additionally The State DRI process is again being studied for modification or repeal. We don t hear much about affordable housing issues anymore. 9

10 Affordable Housing is now a function of the private market 1

11 35, 3, 25, 2, 15, 1, 5, All Units Permitted Florida

12 Inventory Growth & Infrastructure Consortium Bringing It All Together Units Permitted 1,6, 1,4, Unsold Inventory 35, 3, 1,2, 1,, 8, 6, 4, 25, 2, 15, 1, 2, Units Permitted 5,

13 Boom and Bust are Normal for Florida 2, 15, 1, 5, Change in Inventory , , -15, 13

14 As of 214 The inventory of unsold dwellings stands at less than one million units ± 1%. Additionally, there are more than 15, partially built or deteriorated units that may have to be torn down. 14

15 In the end... Housing has become more affordable 15

16 1,6, 1,4, 1,2, 1,, 8, Inventory & Prices Florida Inventory Bringing It All Together $3, $25, $2, $15, 6, 4, 2, Md Price $1, $5, $ 16

17 $3, Median Sales Price Florida Bringing It All Together $25, $2, Multi-Family Single Family $15, $1, $5, $

18 Median Price Number Sold Growth & Infrastructure Consortium $3, $25, $2, $15, $1, $5, $ Single Family Florida Sales 8 Price Bringing It All Together 4, 35, 3, 25, 2, 15, 1, 5, 18

19 $3, $25, $2, $15, $1, $5, $ Md Income & Md House Price Florida Bringing It All Together 19

20 Growth & Infrastructure Consortium 4% 35% 3% 25% 2% 15% 1% 5% Md Income as % of Md House Florida Bringing It All Together % 2

21 $3, $25, Affordability Range & Md House Price Florida Md House Price Bringing It All Together $2, $15, $1, Md Affordability at 3% $5, $ 21

22 The results of overbuilding... The substantial overbuilding coupled with the collapse of demand has resulted is a decline of prices that affordability was been restored, but only for those at or above the median level. The housing recovery is tending to reverse affordability. Housing for those with less than the median income remains an issue. The Florida Housing Finance Agency will continue its programs for the foreseeable future. Most local efforts have been abandoned. 22

23 We got affordable housing... The market provided affordable housing in Florida by... Decreasing annual sales by 52%, with 3-4% of those occurring either foreclosures or short sales, Increasing inventory of unsold homes by 1.1 million Decreasing median sales prices Single Family -51% Multi-Family -63% and in excess of 25, residential foreclosures. The anemic housing recovery has reversed this trend, but due more to lagging incomes than price increases. 23

Growth & Infrastructure Consortium

Growth & Infrastructure Consortium : New Normal or Forces from Within? Robert W. Burchell, Ph.D. (Rutgers) James Nicholas, Ph.D. (University of Florida) Julian Conrad Juergensmeyer, JD (Georgia State U College of Law) Catamaran Resort Hotel