Jacksonville Housing Market to Add Market-Rate, Affordable Homes to the Mix

Contrary to earlier reports, Mayor John Peyton is worried about Jacksonville’s housing affordability. His recent challenge for the Northeast Florida financial and business community - to have 10,000 units of housing in downtown Jacksonville by the year 2010 - was met with both praise and skepticism from community and industry leaders.

Officials point to the successfully completed projects of Berkman Plaza as proof that housing momentum is picking up in the downtown area. A development report issued in December by Downtown Vision Inc. lists 20 proposed downtown projects that involved residential housing.

Concerns over Jacksonville housing projects

The concern remains, however, that luxury home sales have taken priority over developing a downtown market that will be affordable to buyers in middle-income brackets. Large-scale public funding limited to such projects as the Carling and 11 East Forsyth has had community members questioning how far the city will go to reach its projected goal.

“We felt that it was appropriate to use public funds to jumpstart the market on this type of housing,” said Susie Wiles, spokesperson for the Mayor’s Office. “We do not feel, however, that it is necessarily the government’s role to continue to do so. It is time for investors to step forward and help with these needs.”

Executives at the Jacksonville Economic Development Commission are banking on stepped-up marketing efforts and more specialized incentives to encourage investors to do just that in the future.

“The market-rate housing issue is one of our top three project objectives for this year. We want to facilitate as many projects as we can, and we’re very anxious to get out there and work with developers,” said JEDC Executive Director Ron Barton.

What is market-rate housing?

Market-rate housing is defined as housing that accounts for about 25 percent of household income. In Jacksonville, that is the equivalent of either a condominium unit priced at $100,000 to $200,000 or a one-bedroom apartment that rents for about $700 per month.

“People who buy market-rate or affordable housing, typically those with a median income, represent about 60 percent of the market,” said Ray Rodriguez, an independent analyst and owner of the Real Estate Strategy Center of North Florida Inc.

Of the 20 proposed downtown residential projects in Jacksonville listed by Downtown Vision, less than one-third include plans for housing that would be in the market rate or workforce range.

The future of affordable housing

Projections for 2007 have market-rate housing remaining at 15 percent, but show luxury housing increasing to 38 percent and affordable or workforce Jackonville housing dropping to 2 percent. Two luxury condominium projects are currently under construction on the Southbank of the St. Johns River.”Patience is the key when it comes to downtown development,” said Amy Harrell, director of business development and communications for Downtown Vision. “Of the market-rate housing we have now, occupancy is in the 80 percent range and continues to climb. We anticipate it being near 95 percent in the next few months.”

The issue of affordability is of great concern to anyone seeking a Florida home loan across the state. If Florida real estate continues to remain too expensive, buyers and investors may turn elsewhere.