Affordable Housing Out of Reach for Many

This essay, written by Graceful Solutions President Bill Wilson, first appeared in the Tallahassee Democrat on December 1, 2017.

Is your home affordable? Is your rent affordable? A large number of people in Tallahassee and Leon County would answer no to those questions.

During 2017, I had the honor of serving as the Chair of the Tallahassee-Leon County Affordable Housing Workgroup appointed jointly by the City and County Commissions. We presented our final report and 26 recommendations in a meeting of the joint Commissions in late October.

During our months of exploration and discussion about affordable housing, we found there was a lack of understanding of the term. One large misconception is that affordable housing means housing for poor people. For sure, people on the lower end of the income scale need to be able to find housing that is affordable for them. It is also true, however, that people like teachers, police officers and fire fighters also need to find housing they can afford. There are cities in Florida where the price of housing is such that people in this income level are not able to live in the city they serve.

What people in the housing field mean when they talk about housing affordability, applies to people at all income levels. If your housing costs (either rent or a combination of mortgage, interest, taxes, insurance and utilities) exceeds 30% of your income, your housing is not considered affordable for you. This 30% standard is also defined in Florida Law as the measure of affordability.

Using the 30% standard, we have a significant challenge in Leon County and the City of Tallahassee. We don’t have enough housing that is affordable across the income spectrum.

Part of the challenge is the cost of housing and the other part is the income levels of our residents. The United Way of Florida produces an annual ALICE Report. ALICE is an acronym for Asset Limited, Income Constrained, Employed. It applies to people who are working and earn more than the national poverty level but don’t make enough to support a survival budget. According to the ALICE report 41% of the households in Leon County earn less than is necessary to cover the basic costs of living. The breakdown is 22% percent of our households are below the poverty level and another 19% are struggling.

The challenges for the low income resident in our community were made visible when the Tallahassee Housing Authority opened their waiting list for Housing Choice Vouchers. The waiting list had not been opened for 10 years.

The Housing Authority has fewer than 3,000 vouchers and they only have about 250 available each year as a result of people improving their income to a level that made them ineligible or they had other life changes. After duplicates were removed and income verification was complete, there were over 15,000 eligible families on the waiting list.

Another community issue that is impacted by the lack of affordable housing is retaining the talent we are developing in Tallahassee. Why are our best and brightest leaving? One of the reasons is the difference between wages and housing prices. Housing shortages drive up housing prices and there is a shortage in the portion of the market referred to as “workforce housing”. When you consider what you can make and what it will cost to live there are other options in the state that fare better than Tallahassee.

Solving our affordable housing shortage across all income levels is vital to not only creating stability for families but to also be able to attract and retain a quality workforce for our community.

The recommendations from the Workgroup are a good start. One of those recommendations was to create an Affordable Housing Leadership Council to continue the work and ensure that the recommendations of this group are implemented. That needs to happen soon so we don’t lose the momentum that the Workgroup has created around the issue.


An Affordable Solution: It’s Time to Work on Inclusionary Zoning

This essay, written by Graceful Solutions President Bill Wilson, first appeared in the Tallahassee Democrat on October 17, 2018.

A recent item on the agenda of the City of Tallahassee’s Develop Review Committee triggered my call to city staff. The item was to develop 21.83 acres of a 117.5-acre parcel in the SouthWood development as 49 single family lots.

The reason for the call was that the city’s Inclusionary Zoning Ordinance requires any development of 50 units or more, must provide a percentage of affordable housing units. The question was, why 49 units? Is this another attempt to avoid the Inclusionary Zoning Ordinance?

Well, in this case, it is not. When the original Development of Regional Impact for SouthWood was approved years ago, and before there was a city Inclusionary Zoning Ordinance, SouthWood agreed to pay a fee instead of providing affordable housing. The initial fee was $150,000 for the first 1,000 units in the development. Less than the price for one home. After that, they pay a fee of $160 per unit. So this new 49-unit development will result $7,840 to support the development of affordable housing. That is likely less than half the price of one lot.

The SouthWood deal is done and we will have to live with it.

The Joint City/County Affordable Housing Workgroup, in its final report last October, recommended that the City and County “should have a cohesive inclusionary housing policy” to support a greater number of affordable housing units. To date, nothing has been done to make that happen.

There is a shortage now and it is getting worse. At the recent Chamber of Commerce Conference, the housing panel suggested we will have a shortage of over 8,000 affordable units in the next few years.

The city has an inclusionary zoning ordinance that needs to be updated. The county does not. Two things have happened in the past. One, developments in the city have been proposed for 48 or 49 units to avoid the 50-unit trigger. Two, development in the county have been platted for more than 50 units and when approved, the developer then moves to have the property annexed into the city, thereby avoiding the city’s affordable housing requirement but having access to city services.

Why a uniform policy for the city and county? First to avoid the situation noted above and second to create a more economically diverse community. We are one of the most economically segregated cities in the country and research shows that communities that are more diverse are more successful over time.

To develop a “cohesive inclusionary housing policy,” it is going to take a process that involves a variety of groups that will have an interest in this issue. It won’t be an easy task. It won’t happen quickly. But it needs to happen, and the City and County Commissions have to get the process started.


Community Land Trust is a Tool for Affordable Housing

This essay, written by Graceful Solutions President Bill Wilson, first appeared in the Tallahassee Democrat on February 9, 2018.

Community Land Trusts have been around for a while but have not been used in Tallahassee or Leon County to support the development of affordable housing. Some years ago forward-thinking people included the concept in the local Comprehensive Plan so it is an available tool.

The Tallahassee/Leon County Affordable Housing Workgroup recommended to the Commissions that they move forward with the concept and it appears that both Commissions will have discussions about establishing a Community Land Trust in the near future.

So, what is a CLT and how does it work? A CLT home is a step between renting and buying a market rate home. It allows families to acquire a home and start building equity when they are not able to afford the size home they need.

In a CLT, housing is made affordable by separating the value of the house from the value of the land underneath it. A qualified low-income homebuyer can purchase the house, but the land is owned by a community‐based nonprofit corporation, which provides a 99‐year ground lease to the homeowner. Because the sales price of the home does not include the value of the land, the homebuyer has an affordable monthly mortgage payment and a nominal ground lease payment.

Let’s look at an example of how this works with a house that is selling for $185,000 and the land value is $50,000. Today you can get a mortgage for 97% of the purchase price, or in this case, $179,450. The monthly payment (30-year mortgage at 4%) would be $857 plus taxes and insurance.

In the case of the CLT house, you would only borrow $130,950 which would require a monthly payment of $625 a month plus taxes, insurance, and a ground lease payment of $30 – $50. That is around $200 a month less. That makes the $185,000 home more affordable for a much larger group of people.

According to the Florida Community Land Trust Institute, several local governments in Florida recognize that CLTs can play an important role as stewards of community resources for current and future residents. Local governments typically provide CLTs with essential resources for startup and sustained operation, including donating publicly owned land, providing construction financing, offering down payment assistance to CLT homebuyers, and providing ongoing administrative support to the CLT.

The terms of the 99‐year ground lease place limitations on the resale of the home, requiring that the home be sold to another family that is income‐qualified. This provides the investment that the local government makes is serving low-income families in perpetuity which is not the case with one-time subsidies.

There is always a discussion when a new CLT is formed around limiting a homeowner’s ability to realize the full appreciation of the value of the home when they sell it. The resale limits in the lease provide for sharing that increase in value with the homeowner and generally the percentage they receive is tied to how long they are in the home.

Clearly, there is a trade-off in terms of getting in at the lower price and the amount of appreciated value you receive at resale time.

Another feature of the CLT is the support that the trustee provides to the homeowners. The CLT typically has a stewardship program which provides ongoing education on home maintenance and support with budget and financial management education and counseling.

During the burst of the housing bubble in 2008 when foreclosure rates for market-rate homes hit 10%, the foreclosure rate for CLT homes was less than 1% because the trustees in the CLT were able to step in early and support the homeowners with various resources to help them keep their homes.

With the city and county both committed to increasing homeownership in our community, it may be time to use the CLT model as another tool to support housing affordability.


Housing is Part of the Solution for Our Crime Problem

This essay, written by Graceful Solutions President Bill Wilson, first appeared in the Tallahassee Democrat on December 22, 2017.

It is well established that most crime is committed by people who are desperate. Financially desperate, emotionally desperate, or just plain desperate. It is also well established that most of that crime is committed by people with limited educational success. What is not as well-known is the link between the unstable nature of a families’ housing and the low achievement of the children in that household in school.

I served for eight years on the Leon County School Board. In looking at the data we found that there was considerable difference in the performance of children who were in a given school for three years or more, and children that changed schools frequently. School stability resulted in better student outcomes.

The families were moving for various reasons but mostly as a result of financial issues. They were not able to make their rent payment at apartment A so they moved to apartment B which happened to be in another school zone. Move the kids. There was a dispute with a spouse or girl/boyfriend, mostly about money or the lack of it. Find a new home, move the kids.

This was most prevalent in several schools on the south side of Tallahassee. The “fix” was to allow students in these schools to remain in the same school regardless of where they moved in a new multi-school zone. We provided transportation between the schools to facilitate this stability.

A lot has changed since then in the school system, in terms of student assignments and choices, but the underlying issues are still the same. Where there is housing instability, the children’s education suffers. When the children’s education suffers, their potential for becoming a statistic in the criminal justice system in greatly increased.

And while there is greater choice in the school system today that choice is only available to families that are able to transport their student to the new school. Therefore, choice is mostly available to the families with more resources and underperforming schools end up with more and more students from disadvantaged families.

Both Sheriff O’Neil and Chief DeLeo have talked about dealing with the underlying reason people commit crime as well as dealing with the people currently committing the crimes. There has been a lot of talk about the part that education and jobs play in that longer range plan. People with better education get better jobs and are not as likely to commit crimes. Stable housing is also a leg on that stool.

I am clear this is a long range answer to a systemic problem but we need to be looking at dealing with the systemic issues in addition to trying to police our community out of the current crisis.

The other piece of this puzzle is the geography of our town. We still have a railroad track that runs through town and still provides a deep divide. We need to do more to build the bridges that will cross those tracks. The big question of course is: How do we redevelop the South Side of Tallahassee to attract more people that are higher on the income scale while at the same time developing strategies to create truly economically diverse neighborhoods north of the tracks?

The research is clear in terms of the success of low income families’ future success. When communities establish more economically integrated neighborhoods, the NIMBs (Not In My Backyard) come out in force. The research also shows that economic integration does not have a detrimental impact on the overall neighborhood. When families are able to live in economically integrated neighborhoods with access to improved amenities and better schools, their children do better and the whole family becomes more successful. The common phrase: All boats rise.

The plans for the redevelopment of the Orange Avenue apartment complex owned by the Tallahassee Housing Authority, and the overall conceptual plan for the Orange Avenue corridor, is a vision for how we can make a difference on the south side to attract a more economically diverse population to this area. Implementation of that plan will take years, a lot of money and strong political will. While we work on that, we also need to develop strategies for economic diversification on the north side of the tracks. That will probably take more political will but it can make a big difference for a lot of families a lot sooner.


The Fickle Funding for Affordable Housing

This essay, written by Graceful Solutions President Bill Wilson, first appeared in the Tallahassee Democrat on March 24, 2018.

Florida was the first state to adopt a dedicated source of funding for affordable housing. A coalition of affordable housing advocates led by the Florida Housing Coalition, builders, realtors, financial institutions and others banded together and pressed the legislature for stable housing funding.

The response was the creation of the Sadowski Affordable Housing Trust Fund. Real Estate transactions in the State of Florida are required to have documentary stamps attached when they are filed with the Clerk of the Court. There is a fee for these stamps based on the value of the transaction. The trust fund receives a portion of the documentary stamps that are paid on each real estate transaction.

For a number of years, from 1992 when the fund was established until 2001, all the money from the doc stamps went to the trust fund. In 2001, the legislature starting “sweeping” the trust fund and using the money to balance the state budget.

Apparently, the dedicated source of revenue was no longer dedicated. It was just another source of money the legislature could use to do whatever it wanted. As an example, in 2004/05 the trust fund would have generated $502 million for housing. In that year, the legislature only appropriated $192 million for housing and used the rest of the money for other things.

This past session was no different. The trust fund in the coming fiscal year is projected to generate over $300 million but only $123 million was allocated for housing. The rest was “swept” to fund other activities.

The estimates for the funding that will come to Tallahassee and Leon County this year are $167,323 for Leon and $322,928 for Tallahassee. Most of this money will be used for the City and County rehab programs. If you were using it to build new housing, it would support the development of maybe five homes. That will hardly meet the locally identified need. The recent activity of the Tallahassee Housing Authority identified over 15,000 families seeking affordable housing assistance.

Since 2001 when the sweeping started, the legislature has redirected over $2.5 billion that was supposed to be dedicated to affordable housing to fund other activities. This approach by the legislature had made it difficult for local government to plan because they never know how much money they are going to have from year to year.

The most recent years have been the worst. Since 2008, when the housing crisis hit, the legislature has taken more than 70 percent of the “dedicated housing money” for other purposes. In 2011/12 and 2013/14 the legislature took all the money and didn’t appropriate any for the State Housing Initiatives Partnership (SHIP). SHIP is the vehicle that moves the trust fund money to local governments to support their housing plans.

The Tallahassee/Leon County Affordable Housing Workgroup recommended that the two commissions consider finding a stable local source of revenue to meet the affordable housing needs in our community. We need a plan to develop more affordable housing and that is going to take a stable funding source.

There are a number of options for funding sources and the two commissions should consider the appointment of a group to study those options, gather citizen input and make recommendations for a stable revenue source for affordable housing. That revenue source needs to be implemented in a way that local government can’t work the same way the legislature does and we continue to have fickle funding for affordable housing.