Consultant working on review of surplus county parcels that could be offered for projects
In hosting a workshop on how they can spur the creation of more affordable housing units, the Sarasota County commissioners heard an array of suggestions — from their donation of surplus county land for projects to approving a dramatic increase in density for infill development to speeding up the time it takes for a developer to win approval for residential housing.
In the entire state of Florida last year, only 5,000 affordable dwelling units were constructed, Jon Mast, chair of the board’s Affordable Housing Advisory Committee, told the commissioners on Aug. 21.
In the past 10 years, 440 affordable units have been approved for Sarasota County through a federal tax-credit process, William Russell, president and CEO of the Sarasota Housing Authority, pointed out to the board.
Commission Chair Charles Hines, especially, seemed taken aback by the statistics. “We need 5,000 [affordable homes] here,” he said. “I’m getting very anxious.”
Within the next couple of months, Hines added, he hopes a consultant working with staff will have identified up to five county-owned surplus parcels that the board could offer for projects. “I’d really like to see us make a decision.”
Russell was the speaker who proposed that the commissioners authorize a Request for Proposals (RFP) for one or more of those county parcels, which the board could donate for a project, and then review responses from companies interested in building affordable housing on the sites.
The price of land, Russell and other speakers emphasized, is the most expensive factor of any development in Sarasota County.
Matt Osterhoudt, director of the county’s Planning and Development Services Department, explained during the workshop that staff had hired a consultant, Colliers International — which has an office in Fort Myers — to review all the surplus lands the county owns to determine which parcels would be suitable for affordable housing projects. The parcels were identified through a thorough, department-by-department review that concluded in 2018.
The firm is expected to finish its report within the next two months, Osterhoudt added; that will be provided first to County Administration and then to the commission.
Collier’s also could handle marketing and brokerage services for the county, Osterhoudt said, if that ultimately is the desire of the commission.
During the early portion of the two-hour-and-45-minute workshop, Jane Grogg, manager of the county’s Neighborhood Services Division, provided statistics to underscore the seriousness of the affordable housing situation in the community.
“Over 50% of renters in Sarasota County spend more than 30% on housing,” she said. “Actually, we also have one in every four renters in Sarasota County who are … severely cost-burdened,” as they are spending more than 50% of their income on rent.
According to the U.S. Department of Housing and Urban Development (HUD), Grogg pointed out, the area median income (AMI) for the North-Port-Sarasota-Bradenton Metropolitan Statistical Area is $70,900. Eighty percent of the AMI is considered low income, she said; that equates to $56,720. Extremely low income is approximately 30% or less of the AMI, or $25,750.
Commissioner Nancy Detert, who used to own a mortgage business, pointed out that by the time a family’s tax payments were deducted from the $56,720, the figure could be reduced to $40,800. Then the family would have $3,400 a month for other expenses, Detert said.
This year, according to another slide Grogg showed the board, the fair market rental rate for a one-bedroom unit is $925; for a two-bedroom apartment, $1,180.
“It shows a more serious spin on what the problem is,” Detert added.
The median earnings for a full-time single worker in Sarasota County this year is $42,239, Grogg said. However, since 2000, she continued, the fair market rate for housing has been tending much higher than the AMI. In fact, she pointed out, “That income has stayed rather flat, while the prices have increased.”
This year, the median price of a Sarasota County home is $280,000, according to another slide Grogg showed the board.
An additional issue in the community that contributes to the affordable housing problem is the fact, she said, that “we have quite a few homes that are seasonal or are only used occasionally.”
Grogg presented another slide ranking the types of jobs by their growth in the county in 2017, with salary details. Only one of those professions — registered nurse — provided an annual income level that came close to what was necessary to purchase a median-priced home in the market that year. The registered nurse’s income was $63,024, the slide said, while the amount needed for the home purchase was $65,709.
The top position in demand in the county in 2017 was “Retail Salespersons,” with average income of $22,381, the slide noted.
A bevy of suggestions
During his presentation, Russell of the Sarasota Housing Authority told the commissioners that, over the past 10 years, in working with the Florida Housing Finance Corp., the Housing Authority has been able to provide land and HUD subsidies to achieve the construction of three phases of Janie’s Garden in Sarasota. Two other affordable housing projects are in pre-development, he added: Amaryllis Park on North Orange Avenue in Sarasota, which will have 84 units for elderly tenants; and Lofts on Lemon in the Rosemary District of Sarasota, with 130 apartments.
The total investment in those projects, he continued, is about $96.5 million. “This is really significant.”
Although the county has a great need for affordable housing, Russell continued, “No private developer is going to take less money than they could get [for new homes]. Construction costs are very high right now.”
If the commission agreed to pursue a Request for Proposals process for some of its surplus parcels, Russell said, it could allow developers to construct a mix of units, so some would be affordable and others would have market-rate prices. He also suggested the board members invite developers to tell them how many affordable units the developers would commit to maintaining as affordable over the long term.
In response to comments from Commissioner Detert, Russell agreed that the prices of the affordable units should be allowed to rise gradually, with each subsequent sale. He further emphasized that the affordability restriction should be linked to income level and not to specific units. “We hope incomes rise over time.”
During the next presentation, former state Sen. Pat Neal, founder of Neal Communities, pointed out that his company builds and sells about 1,200 homes a year in 10 jurisdictions. About 57% of the initial sales, he added, are to people moving to Florida from another state.
“Mostly, I’m blaming the government for the problems” with creating affordable housing, he told the commission.
For example, he said, it will have taken four years — from the time he began working with county staff to win approval for the Grand Lakes project south of Clark Road and east of Interstate 75 — before the first house is constructed. That delay will add about $30,000 to the price of each home, Neal stressed, because of Neal Communities’ investment in the land.
Thus, he continued, his first suggestion to the board was to ask its professional staff to “focus on the matter of time.”
Among the county regulations — and delays — with which developers have to contend, he explained, are archaeological surveys and facets of the county’s fire code, which he contends are unnecessary. With regard to the latter, he said, the code dictates the construction of a “fire road” that would enable the Fire Department to reach a home under construction in a remote area of a development site if a fire erupted. “We’d just as soon let the house burn down as build a $120,000 road,” Neal said, because Neal Communities has to tear out that road after the homes and neighborhood roads have been completed.
A third speaker, John Wiseman, president of CORE Construction in Sarasota, concurred with Neal about the rising expenses for developers because of the time it takes to gain approval for projects. “That’s probably the biggest thing that you could look at.”
“We work all over the state of Florida,” Wiseman continued. Where projects can be built with greater density, he added, more affordable housing can be created.
The most cost-effective urban infill projects, he noted, would entail buildings standing six stories over retail space or parking. “I’ve seen very tastefully well-done communities with 50 units an acre.”
He also encouraged the commissioners to ease parking requirements even more, especially in urban areas where residents can walk to services they need.
One example he cited — which Commissioners Alan Maio and Hines have discussed in the past — is construction of residential units above retail spaces in older shopping centers. In such a situation, Wiseman and Maio agreed, people who live in the dwelling units most likely would need parking spaces before and after the hours the retail businesses would be open.
The final speaker was Jon Mast, who chaired the county’s Affordable Housing Advisory Committee. Mast is CEO of the Manatee-Sarasota Building Industry Association.
Construction companies need to make a profit, Mast pointed out. “Many times, the public is naïve when it comes to that conversation. … A builder [typically] has a 10-year warranty [on new homes],” which is a necessity.
He encouraged the board members to waive impact fees for affordable housing projects, and he concurred with Wiseman about allowing for more density in the urban core.
Further, Mast proposed that the commissioners remove the requirements for affordable housing projects in the 2050 Plan for new communities east of I-75. He pointed out that the developers of those neighborhoods already will have to contend with building water and sewer lines, as such infrastructure does not exist out east. “I still think 2050 needs work.”