Affordable Housing Proposals Stir Debate in Indian River County, Fla.

Like much of Florida, Indian River County is confronting the issue of staggering home prices with new affordable housing initiatives. But there has been great debate over how to accomplish the collective goal. The county’s top planning advisor says the latest plan falls short of the mark by not assuring new homes, if resold by the first buyers, would remain affordable.

The Planning and Zoning Commission will meet later this month to discuss a proposed ordinance allowing developers to build homes on smaller-than-average lots if they ensure the homes are priced withing range of low- and middle-income buyers.

But Donna Keys, the board’s chairperson, says the county’s proposal doesn’t go far enough to keep affordable homes affordable.

“I’m disappointed we can’t seem to come up with a way to keep homes at the affordable housing income level,” she said.

The county’s latest proposal would start a small-lot home’s price at under $199,800, three times the county’s moderate income level, and restrict the price for 10 years, allowing an increase of 3 percent per year if the owner sold before then. After 10 years, the proposal states, the home could be sold at market price.

With area home prices through the roof and the rising costs of Florida home loans pinching cash-strapped buyers even harder, planners are proposing a way to control an affordable home’s price by permanently restricting its size to 1,500 square feet — rather than making sure all prospective buyers of a home meet income guidelines.

“We’re looking at something that is not administratively complex and not subsidy-based,” Community Development Director Bob Keating said.

Keys complains that Keating is reluctant to “police” affordable housing, and says she is drafting an alternate plan that would make sure homes marketed as affordable or work force housing would remain that way in subsequent resales. Her plan includes:

• A provision ensuring that qualified buyers would be classified either as extremely low-, very low-, low- or moderate-income households, based on their relationship to the county’s median income, as per the guidelines established by the Florida Housing Finance Corp.
• An extremely-low income threshold of less than 30 percent of the county’s median income (currently $53,250), while the moderate income classification could go up to 20 percent over the median.
• The guarantee that when the first buyer resells a home, the sales price must stay within that household’s income level or below.

“If a very-low-income family buys a home, they can’t resell to a moderate-income family,” Keys said, urging that to allow that practice would take that house out of the reach of families it was built for. “My way would make affordable homes available and keep them in the affordable-housing arena without the county financing affordable housing.”

The Executive Director of the Indian River County Housing Authority, Mark Thomas, has suggested his agency might be able to qualify subsequent buyers for affordable housing if Keating didn’t have the staff for it. That would require a new staff position and office. But Keating says the problem with qualifying buyers for affordable housing resales is not that simple.

Keating cited his own department’s 13 years of experience qualifying first-time home buyers through the State Housing Initiative Partnership (SHIP) program, in which Indian River County uses state money to make loans to help buyers with down payments and closing costs.

Qualifying buyers for such assistance is already tough, Keating said, as banks don’t always agree with the county on such issues as whether child support should count as income or whether children in school should still count as part of the family expenses if they have their own jobs.

“We’d be telling someone who they can’t sell to. There’s a lot more brain damage, I think, in doing this than any benefit you would get out of it,” Keating said, adding that re-sales would be private deals between the first buyer and the next, with no direct role played by the county.

The Florida housing market has boomed so dramatically and for so long that officials are scrambling (and disagreeing) on how to best address the lack of reasonably-priced housing. In this case, Keating’s version focuses on the property; Keys’ approach on the buyer.

Keating visualizes home prices up to $199,800 with restricted rents and sales prices for 10 years, allowing an increase of 3 percent per year if resold. It permanently restricts house sizes to 1,500 square feet, and prohibits additions. Keys’ plan is centered around classification of buyers into specific income levels, as well as how they can resell the home.

Hopefully, a consensus can be reached so affordable Florida home loan options remain available to lower- and middle-class residents, whose contributions to the economy are irreplaceable.