Solutions to the Affordable Housing Crisis in Palm Beach

Earlier this week, we reported on the problem of affordable housing in Palm Beach County. Seems as though someone was listening.

Under a new policy enacted the Palm Beach County Commission, between seven percent and 20 percent of homes in new developments are to cost from $164,000 to $304,000. How did the government arrive at this home price?

It used the “two-and-a-half rule” to measure affordability - which holds the maximum price a household can afford for a home is 2.5 times its annual income. Therefore, those homes would be affordable for households making $65,600 to $121,600 a year.

The median home price in West Palm Beach-Boca Raton in January, the most recent month for which statistics are available, was $393,700 (up from $361,800 the same month the year before) Using the “two-and-a-half rule,” the most recent price is affordable for a household making $157,480 a year.

Palm Beach County plans wider code changes toward the end of the year.

For now, the rules may allow developers to either build the less-pricey homes, donate land to the county or pay an about $100,000 fee per home the county said should have been affordable, but was sold at market rates.

Some developers said such limits will only drive up the prices on those market-rate homes. However, the county said, cooperating developers may receive permission to build up to 30 percent more homes than previously permitted. Either way, this is an important step on the way to affordable Florida home loans in the area.