Affordable Housing in Orlando

[smileguy]

We have talked in other threads about housing prices, low wages, homelessness, population growth, and other related topics.  As years of deferred maintenance catch up with our affordable housing stock and federal funding priorities shift, how will the most vulnerable among us fare? 

Locally, I understand that there are 8,000 people currently on the OHA waiting list. It was last opened for one week in September 2015. There is no notice of when this waiting list will reopen, so we don't truly know the size of the need, but it is safe to say that the demand is growing as the total number of units decreased. Central Florida consistently makes the news for our low wages and high cost of living and we see the affordable housing crisis build. 

Nationally, serious policy is being dragged down by partisan and personality politics, including new plans to bar undocumented migrants from living with someone who accepts federal assistance, a policy which could displace 55,000 minors; and removing emergency housing protections for members of the transgender community. 

In what amounts to a money grab for developers, traditional affordable housing programs are seeing drastic cuts, with funding instead subsidizing market-rate and luxury multi-use developments that accommodate fewer people. The voucher programs will, in effect, re-locate the very poor to suburbs and exurbs, increasing dependence on personal automobiles and reducing resilience when emergencies - like those cars needing repair - inevitably come up. 

If you visit public housing in Orlando (and most other places), you will see elderly folks and good, honest people working to support their families. These are our cashiers we know from 7-Eleven, hotel housekeeping, restaurant, and minimum-wage tourism workers. As has been touched on before, we don't see the multi-generational poverty that some other regions have, and a "hand up" when it comes to public housing can truly help people survive temporary setbacks like a lost job or partner.

 

So here are some questions.

Without public money, how can we increase supply in the "missing middle" to make market-rate housing affordable to average people, freeing up supply for those with lower incomes?

How can below-market-rate housing be part of the ecosystem of how people live and work in Central Florida? 

What can we do to reduce the impact of gentrification, not only on neighborhoods like Parramore but blue-collar enclaves in The Milk District and Curry Ford West to keep the problem from growing? 

[AmIReal]

48 minutes ago, smileguy said:

 

Without public money, how can we increase supply in the "missing middle" to make market-rate housing affordable to average people, freeing up supply for those with lower incomes?

Several areas west of 4 are designated enterprise zones. The City, County and State should offer additional incentives to builders to use a portion of those properties (which will essentially create tax free growth) as low income/ moderate income housing.

48 minutes ago, smileguy said:

How can below-market-rate housing be part of the ecosystem of how people live and work in Central Florida?

I'm not sure it is as much a problem to find below market housing as it is too find it in certain rapidly increasing areas. There is a ton of below market stock, just not near downtown/ near ucf/ etc. As you mentioned, this creates new burdens on the consumer as they now need to find transportation (car/ expensive; public/ unreliable). It would be hard to justify below market building in, say South Eola or North Quarter. To me, that's ok. Again, go back to point 1 about using the enterprise zones for a better purpose than developers parking cash for 10 years to walk away with no tax burden.

48 minutes ago, smileguy said:

What can we do to reduce the impact of gentrification, not only on neighborhoods like Parramore but blue-collar enclaves in The Milk District and Curry Ford West to keep the problem from growing?

Sorry, but this is where we part. The market is going to allow money to flow to the hot spots you named. If you are a renter in those areas, you unfortunately have no property rights when the landlord decides to sell out at a sizable profit. If you are an owner in those areas, congrats. This is a feature of our system, not a bug.

I couldn't figure out how to add Spenser's link from another post, but this is encouraging from the other metro projects post.

speser1058

"Affordable Housing project for seniors viewed as part of a Pine Hills renaissance http://www.orlandosentinel.com/news/orange-county/os-ne-affordable-senior-housing-pine-hills-20190605-kw6kcgg4zvbrximxkoksn32hfa-story.html

From the Sentinel 

They’re being built on the former site of Seville Place apartments which were demolished. Dang, I remember when those were new - a friend of my sister moved in after graduating from Evans. I am officially old - JFW, get my walker!"

 

Edited June 6, 2019 by AmIReal
added link

[AmIReal]

Just ran across this in Obj

Wells Fargo said it’s committing $1 billion in philanthropy alone through 2025 to address issues tied to the “housing affordability crisis,” including homelessness, available and affordable rentals, transitional housing and homeownership.

Wells Fargo is also creating a $20 million “Housing Affordability Challenge” that will look for innovative ways to rapidly boost the availability of affordable housing. The bank hopes to find new ways to address challenges in construction, financing and support services tied to providing affordable housing to low- and moderate-income families, seniors and the homeless. 

https://www.bizjournals.com/orlando/news/2019/06/05/wells-fargo-bank-wfc-philanthropy-housing-buffett.html?iana=hpmvp_orl_news_headline

It will take a lot more than this, but it is a visible effort and will hopefully engage others.

 

[spenser1058]

Central FL home prices falling for the first time in 86 months:

https://www.orlandosentinel.com/business/os-bz-home-price-peak-20190606-rbsp4foxzbhg7pjc5zdt3fhwrq-story.html?outputType=amp

From the Sentinel 

[spenser1058]

 

[spenser1058]

 

[spenser1058]

The NY Times editorial page talks about Minneapolis’ decision to end single-family zoning to address their housing issues:

https://www.nytimes.com/2019/06/15/opinion/sunday/minneapolis-ends-single-family-zoning.amp.html

[spenser1058]

The latest: we’ve got a lot of work to do.

https://www.mynews13.com/fl/orlando/news/2019/06/25/new-study-reveals-working-class-struggling-to-afford-housing-in-orlando

From the Sentinel 

[HankStrong]

As an aside, one of the reasons I chose Orlando when I left the Midwest was the affordable housing.  I rented a 2b/2ba house off Goldenrod for $650/month.  I was looking to purchase a home for about $55/sq ft. and was impressed by how affordable it was.  It was about $80/sq ft. where I was living outside Indianapolis and I thought that was crazy.

[spenser1058]

A different approach to homeless housing in Seminole:

http://www.orlandosentinel.com/news/seminole-county/os-ne-is-this-the-new-model-for-homeless-housing-central-florida-20190627-zc2rcnd6qjfuhpncmjithzsuw4-story.html

From the Sentinel 

[nite owℓ]

According to RENTCafe, these are the 10 most expensive neighborhoods in Orlando:

10.  Lake Nona	$1,515
9.  Southport	$1,542
8.  Spring Lake	$1,593
7.  Palomar	$1,593
6.  Lake Shore Village	$1,593
5.  College Park	$1,593
4.  Lake Davis - Greenwood	$1,628
3.  Downtown Orlando	$1,647
2.  Lawsona - Fern Creek	$1,696
1.  Baldwin Park	$1,786

	It seems rent prices now exceed mortgage payments and yet home sales are down... so what gives? Are Millennials/Gen Z-ers not interested in buying? And if they can't afford the rent, where are they moving to?? What will be the next affordable up & coming city/neighborhood? Per the OBJ, "the most affordable apartment rental neighborhoods are sprinkled across the region, including the Pine Hills area west of downtown Orlando." I think the market is forcing Millennials into the suburbs even though they want to live more of an urban lifestyle (which explains how places like Winter Garden are becoming more popular.)

[popsiclebrandon]

No one can afford the down payments. I'd pay a lot less if I had a house I owned than if I rented but good lucking coming up with the 20%.

Apartment List did the math, comparing Millennial savings rates with real estate prices. They calculate that it would take two thirds of Millennials at least 20 years to save enough for a mid-priced condo in their market.

[nite owℓ]

16 hours ago, popsiclebrandon said:

No one can afford the down payments. I'd pay a lot less if I had a house I owned than if I rented but good lucking coming up with the 20%.

Apartment List did the math, comparing Millennial savings rates with real estate prices. They calculate that it would take two thirds of Millennials at least 20 years to save enough for a mid-priced condo in their market.

 

You mentioned conventional loans, but what about FHA? FHA loan requirements remove a lot of roadblocks and really make it so that pretty much anyone can afford the down payment:

• FICO® score at least 580 = 3.5% down payment.
• FICO® score between 500 and 579 = 10% down payment.
• MIP (Mortgage Insurance Premium ) is required.
• Debt-to-Income Ratio < 43%.
• The home must be the borrower's primary residence.
• Borrower must have steady income and proof of employment.
• [Down payment gifts from family are allowed.]

IMO, the rock-bottom credit score requirements should be higher, but otherwise this is still a sustainable option. There are a few FHA approved condos as well (unless they have not renewed). FHA loans make home-ownership even more attainable for Millennials during phases when the real estate market cools down. Sometimes this means considering a starter home vs a dream home.

If it takes 20 years for Millennials to save up for a Conventional down payment, to me it's even riskier to have them blow all that money just to get into a home and then not have any money left over for rainy days or emergencies. IMO, it makes more financial sense to go the FHA route then refinance once MIP can be cancelled. Thoughts?

[HankStrong]

FHA is what we did back in the day.  It was our only option in those days and I'd call it a wonderful experience.  We had about 15% to put down, but only put 10% down (qualified for the lower, though) and saved the 5% as our emergency fund. 

The FHA condo route is tough.  Really tough.

[popsiclebrandon]

I agree FHA is a solid route to go.  There is still the huge problem of actual affordable homes though. Most young people don't want to live in the middle of nowhere and that has pushed home prices in the downtown-ish area to crazy numbers. I get Zillow alerts every day and I just had one for a 2/1.5 that was around 1k sqft for over 350k. Its just crazy so until we see a correction+increased housing inventory I don't think my generation will be doing much in the way of home purchases. That isn't even getting into student loan debt issues.

[Jvest55]

On 7/2/2019 at 10:45 AM, HankStrong said:

FHA is what we did back in the day.  It was our only option in those days and I'd call it a wonderful experience.  We had about 15% to put down, but only put 10% down (qualified for the lower, though) and saved the 5% as our emergency fund. 

The FHA condo route is tough.  Really tough.

99% of the time, the condo you want will not be FHA approved. 20% is needed for a condo. 

[spenser1058]

Lake County tree farm building apartments for migrant workers:

https://www.orlandosentinel.com/business/os-bz-groveland-migrant-employee-housing-20190807-3ysa42eedjabxfsne3ludum64q-story.html

From the Sentinel 

We’ve come a ways since Edward R. Murrow’s classic investigation in 1960 but still have a ways to go:

From CBS News

Edited August 8, 2019 by spenser1058

[spenser1058]

FL Reps. Eskamani and Smith are trying again to work on affordable housing solutions In Tallahassee. They likely won’t be successful until today’s version of the Pork Chop Gang is sent packing but at least they’re still trying:

https://www.orlandosentinel.com/business/os-bz-florida-eskamani-rent-control-20191008-kjic6atg5baddhuv4pcbkqsefa-story.html

From the Sentinel 

[spenser1058]

Should we relax OC zoning rules to create 30,000 more affordable places to live?

https://www.orlandosentinel.com/business/os-bz-task-force-30k-housing-units-20191010-3lumrgfszzhp7iumx5ngsky5ea-story.html

From the Sentinel 

[AmIReal]

16 hours ago, spenser1058 said:

Should we relax OC zoning rules to create 30,000 more affordable places to live?

https://www.orlandosentinel.com/business/os-bz-task-force-30k-housing-units-20191010-3lumrgfszzhp7iumx5ngsky5ea-story.html

From the Sentinel 

I think ADUs make sense in more centralized or urbanized areas, but I don't see it as very useful in the burbs. Does OC have many centralized housing areas where large swaths are not covered by HOAs?  I guess there may be pockets near the Hourglass and southward  that are not in various City limits.

Likely the more bang for the buck will come with incentives to build multi-family with covenants to ensure affordable housing. However, the public image of those places often scare away buyers.

Whatever they decide, I'm just pleased to see OC finally step up to the plate and make some effort. To the best of my knowledge OC does not even have a housing and/ or community development program.

[HankStrong]

Can't read that paywall article, but OC really needs to establish effective and practical rules on tiny houses.  The tiny house movement (AS SEEN ON TV!) may be a trend that comes and goes, but the concept of smaller homes is one that seems to resonate with the current generation.

My wife and I have talked about it.  We have a lot of home for 2 people.  That's not what we're about, but it is who we currently are.

The concept of a neighborhood based on community and shared common areas is a solid one practiced all over Europe.  I saw a few proposals for communities with small homes and they were nice.  One had some 400-800 sq ft solid, traditionally built (AKA not trailers) homes in a radius around a park with a communal garden which is very German.  You had your plot of garden and there was a communal area for herbs and flowers.  If you need some thyme, basil, or rosemary, you just picked some from the communal area.  If you wanted to grow peppers, cucumbers, or tomatoes you grew them in your section and you could obviously share them with your neighbors or trade for other items.  It brings back the sense of belonging to a neighborhood that McMansions have taken away.

Currently, you cannot build such a neighborhood in OC.  It doesn't meet code.

[spenser1058]

Orange County affordable housing task force recommendations:

https://floridapolitics.com/archives/311349-orange-co-housing-plan-includes-trust-fund-regulatory-changes-preservation-strategy

From Florida Politics 

[popsiclebrandon]

I like what SD is doing. 20% must be allocated to affordable housing and in exchange you can basically build as dense as you want.

https://www.voiceofsandiego.org/topics/government/mayor-rolls-out-long-awaited-height-limit-elimination-sorta-plan/

 

For now, here’s what developers would be obligated to do to take advantage of relaxed regulations:

• Affordable housing: Developers would need to reserve 10 percent of the homes in their project for people with low incomes and would not be allowed to pay a fee to get out of putting low-income homes in their projects. They’d then need to reserve another 10 percent of the homes in their project for people with mid-level incomes. And they’d be required to replace any existing homes reserved for low-income residents that would be demolished as part of the project.
• Neighborhood amenities: Developers would have to build neighborhood perks like small parks, plazas or pedestrianized streetscapes as part of their project, or pay a fee into a newly created fund that the city would use for similar projects citywide. City staff said they aim to set the fee at a level that would encourage developers to just build the outdoor space.
• Design requirements: Any buildings over 90 feet tall would need to obey an additional set of design standards, like how far the building is set back from the street. City planners said it’s an attempt to make taller buildings better blend into their neighborhoods.

And here are the benefits they’d receive:

• Faster process: Developers in the program for the most part would not need special approvals from groups like the Planning Commission or City Council.
• No height and density regulations: Through zoning and community plans, the city imposes strict limitations on how many homes you can build, based on homes per acre, and how tall buildings can be. Those restrictions would no longer apply.
• New regulation instead: Rather than height or density, developments would be limited by a different regulation called floor-area ratio, or FAR. Basically, it would restrict developments to a total square footage, relative to the size of the lot they’re on. They would be able to build as tall as they want, or as many homes as they could fit, into however many square feet are prescribed by that ratio. The hope from city planners, which Campbell, Moreno and Sherman all echoed, is that the change would incentivize developers to build more smaller (and therefore cheaper) homes, instead of bigger more expensive ones. Projects downtown would have no FAR limit. Projects in non-urban areas would have a moderate restriction, and those in urban areas like North Park and City Heights would have one slightly higher than that.
• Lower fees: Developers could also get a decrease in the fees they pay to offset the impacts of their projects, if they opt to build smaller units, because fees would be calculated by an apartment’s square footage.

[AndyPok1]

On 7/2/2019 at 7:42 AM, nite owℓ said:

If it takes 20 years for Millennials to save up for a Conventional down payment, to me it's even riskier to have them blow all that money just to get into a home and then not have any money left over for rainy days or emergencies. IMO, it makes more financial sense to go the FHA route then refinance once MIP can be cancelled. Thoughts?

Catching up on threads I never read, so apologies for the months old quote but...

The problem with FHA is the approval process.  With how hot the realty market can be in Orlando, lots of sellers don't want to dead with the complications of an FHA loan because they can just wait a few days and get an offer from someone without one.  

Anecdotally, it took my parents over 3 months to close when selling their house up north to FHA buyers and the stipulations (painting shutters?!) were utterly ridiculous.

Trustco does an amazing thing for our community by offering 5% (with a quarter percent interest rate hike) or 10.5% as default.  *With* no Mortgage Insurance OR escrow.  You need to have a very good credit score (I think 720+) to qualify, but it basically gives you the benefits of FHA in the framing of a conventional loan.  I wouldn't have been able to buy my place without it.

[AmIReal]

On 12/6/2019 at 2:02 PM, popsiclebrandon said:

I like what SD is doing. 20% must be allocated to affordable housing and in exchange you can basically build as dense as you want.

https://www.voiceofsandiego.org/topics/government/mayor-rolls-out-long-awaited-height-limit-elimination-sorta-plan/

 

For now, here’s what developers would be obligated to do to take advantage of relaxed regulations:

• Affordable housing: Developers would need to reserve 10 percent of the homes in their project for people with low incomes and would not be allowed to pay a fee to get out of putting low-income homes in their projects. They’d then need to reserve another 10 percent of the homes in their project for people with mid-level incomes. And they’d be required to replace any existing homes reserved for low-income residents that would be demolished as part of the project.
• Neighborhood amenities: Developers would have to build neighborhood perks like small parks, plazas or pedestrianized streetscapes as part of their project, or pay a fee into a newly created fund that the city would use for similar projects citywide. City staff said they aim to set the fee at a level that would encourage developers to just build the outdoor space.
• Design requirements: Any buildings over 90 feet tall would need to obey an additional set of design standards, like how far the building is set back from the street. City planners said it’s an attempt to make taller buildings better blend into their neighborhoods.

And here are the benefits they’d receive:

• Faster process: Developers in the program for the most part would not need special approvals from groups like the Planning Commission or City Council.
• No height and density regulations: Through zoning and community plans, the city imposes strict limitations on how many homes you can build, based on homes per acre, and how tall buildings can be. Those restrictions would no longer apply.
• New regulation instead: Rather than height or density, developments would be limited by a different regulation called floor-area ratio, or FAR. Basically, it would restrict developments to a total square footage, relative to the size of the lot they’re on. They would be able to build as tall as they want, or as many homes as they could fit, into however many square feet are prescribed by that ratio. The hope from city planners, which Campbell, Moreno and Sherman all echoed, is that the change would incentivize developers to build more smaller (and therefore cheaper) homes, instead of bigger more expensive ones. Projects downtown would have no FAR limit. Projects in non-urban areas would have a moderate restriction, and those in urban areas like North Park and City Heights would have one slightly higher than that.
• Lower fees: Developers could also get a decrease in the fees they pay to offset the impacts of their projects, if they opt to build smaller units, because fees would be calculated by an apartment’s square footage.

Florida has a very lucrative initiative to fund affordable housing call the Sadowski Affordable Housing Trust Fund. The fund is a small percentage of doc stamps that are put aside from every property sale in Florida and since it was created 25 years ago the fund has raised nearly $6 billion. Unfortunately, the Florida Legislature has diverted over $2billion of that fund to pay for things like corporate tax breaks and general funds and for the past 12 sessions has refused to fully fund the account.

I agree the San Diego initiatives are very interesting and many of those should be looked at here. I also think if the legislature would keep their fingers out of this particular purse and fund it as they have agreed to, it would make it easier for communities to enact some of their cool ideas.