For 75 Percent of Broward County Residents, Single-Family Homes Not an Option

Say you earn $58,100 a year, the median income in Broward County.

How realistic is it to expect to be able to buy a new single-family house here? The answer, sadly, is not at all. With Florida real estate becoming increasingly scarce, particularly near the water, and years of low home loan rates fueling a price boom, most prospective buyers are out in the cold.

In Broward, a new 1,800-square foot house without luxury upgrades costs almost $600,000 to build, and would require an income of about $133,000 a year to afford. That’s assuming a 20 percent down payment and a 30-year, fixed-rate Florida home loan at a prime rate of around 6.5 percent.

“The [new] detached single-family home in Broward County is unattainable for most South Florida workers. It’s become the American fantasy,” said Joe Kocy, the former assistant to the county administrator for housing.

Sharing the blame are:

• Soaring costs of land, at around $120,000 per standard lot.
• Building materials and labor, which will run you about $150,000.
• Site development, to the tune of another $30,000.
• Then there are government fees and permits, costs for architects, engineers and marketing, and loan financing, which add $190,000 to the cost.
• Factor in 20 percent profit for the builder, and your dream house (which is actually a pretty standard house) costs $588,000.

Wages, meanwhile, remain stagnant.

Builders say Broward’s future, therefore, lies not in traditional housing developments but in multifamily developments like townhouses and condos. Even Habitat for Humanity, a charity that has built more than 200 single-family homes for low-income people in Broward since 1983, is now getting into multi-family home construction here.

“Our biggest challenge is the land. If we can put up more units on a piece of property and help more people while balancing the increased density with our mission, it makes sense to do it,” Jason Crush, Habitat’s executive director in Broward, said.

The organization plans to build about three-dozen homes per year for the next few years with a mix of single-family, attached villas and townhomes, spending only $140,151 to build each of its 1,400-square foot houses. As Habitat doesn’t pay hefty government fees and receives much of its material and labor via donations, it can build at a fraction of the price.

Gregg Halkuff, 29, a Sawgrass Springs middle school teacher who grew up in Coral Springs, was determined to buy a single-family home. And he did.

But his new four-bedroom house, which he got for $190,000, is near Raleigh-Durham, N.C.

“I wish I didn’t have to leave but I don’t want my first house to be a condo and I don’t want to raise my kids in a condo. I want to have what my parents had and I don’t feel like I can do that here,” Halkuff said.

Even resales of single-family homes are out of reach for 75 percent of Broward households, with a median price of $360,600. At that cost, you would need around $90,000 a year to even entertain buying such a home. And while the South Florida housing market has cooled off recently, prices are not falling by much… if at all.

“The expectation for most of us is still that we are going to live in a single-family house and, unfortunately, that is a dream of the past and not of the future,” said James Carras, President of the Broward Housing Partnership.

The Broward coalition is setting up housing trust funds and asking state and local governments and businesses, including banks and insurance firms, to contribute. The funds would underwrite the construction of affordable housing and help workers get decent Florida home loans.

Lani Kahn Drody, Executive V.P. of Lowell Homes in Miami, commented that more affordable housing would be possible if cities and the county would streamline the permitting process and waive impact fees for developers.

“There are so many builders who would like to build more moderately priced housing and it’s very difficult to find those opportunities,” she said.

Faced with a record number of building permits after Hurricane Wilma and a shortage of home inspectors, officials throughout the county say they are struggling just to keep up and have done all that they can to speed up the process. In addition, they say waiving fees is not an option because they need revenue to provide services and pay for roads, schools and parks.

The state has put forth several affordable housing initiatives, while some cities like Lauderdale Lakes have embraced the idea and rewritten their codes to encourage it. Pompano Beach is working with both lenders and charities and making public-private partnerships in Valencia Estates, a community of 43 lower-income homes. Hallandale Beach is busy buying lots for affordable housing as well.

Others, such as Fort Lauderdale, Broward’s largest city, are shying away. On June 6, the city rejected a plan to force developers to sell/rent new houses at artificially low prices, or contribute money to a pot that middle-class buyers could then use to buy or rent homes.

Buyers such as Kathy Baker aren’t waiting for local governments to act.

“My first choice would have been a house, but that was out of the question financially,” said Baker, 56, an administrative assistant who paid around $250,000 for a Fort Lauderdale condo after her two grown daughters moved out of her single-family home. “One of the nice points about a condo is you can lock the door and go and not have to worry about anything. But I miss a yard and the gardening.”