Affordable Housing Program Picking Up Steam in Delray Beach

Venice Cobb, a single mom, supports her three kids on a Delray Beach city employee’s salary.

With soaring home prices in Delray Beach and throughout South Florida, it’s almost impossible for her to afford a home in the city she serves for a living.

Her chances of becoming a homeowner seemed so bleak that she contemplated moving her family out of state a few months ago. But Cobb decided to stay, thanks to a new initiative in Delray Beach aimed at replacing blighted homes with affordable housing.

Later this month, she tells the Sun-Sentinel, she’s set to become the first homeowner to move into a city-subsidized home obtained through the Delray Beach Community Land Trust. Established in December, it’s one of only a few such trusts in Florida.

“I’m so excited. I’m going to retire here,” said Cobb, 30, who works as an executive assistant and board liaison in Delray Beach’s City Clerk’s Office and has rented in Boynton Beach for the past year.

Cobb’s situation is very similar to many other public employees, such as teachers and police officers, whose salaries simply cannot compete with the meteoric appreciation rates seen in the South Florida housing market.

Since 2002, median home prices in Florida have rocketed 77 percent, but the median income has risen only 1.4 percent, according to a study released in July by the Florida Housing Coalition in Tallahassee.

The backlash of that telling stat? About 90 percent of the workforce in Palm Beach County can’t afford to buy a median-priced home, according to a July report released by the Housing Leadership Council of Palm Beach County, a new group formed by the Palm Beach County Economic Council.

How bad are we talking? It’s a bona fide affordability crisis. Home prices have escalated so much faster than salaries and wages that there’s a $317,378 gap between what homes in Delray Beach cost and what the typical household can realistically pay.

The median-priced single-family home (meaning the point in which half cost more, and half less) in Delray Beach costs $479,000, based on January-March sales. The city’s median income in 2005 was $50,842, data compiled by Florida International University shows.

But Delray Beach officials are determined not to let home prices run out professionals who provide essential service to the city. Under the trust, residents who earn up to 150 percent of the Palm Beach County median income qualify to buy the home, but not the land.

In turn, they get a renewable, 99-year ground lease. Residents are required to put down 5 percent of household income as a down payment.

Other cities also are struggling to find solutions to the workforce housing crunch as well. Boca Raton officials are considering charging developers a fee to be set aside for homebuyer assistance, as well as offering builders incentives to construct affordable houses.

Boynton Beach also is exploring the possibility of establishing its own trust and perhaps partnering with Delray Beach, said Lisa Bright, executive director of the Boynton Beach Community Redevelopment Agency.

Some are calling it the start of a long-overdue trend. Cobb is moving into the first of three new houses recently purchased along 13th Avenue by the trust. The home features four bedrooms, two baths, granite countertops, a garage, fresh landscaping and a fenced-in backyard.

Whereas she would be unable to qualify for a Florida mortgage loan covering the whole amount, the trust will be covering the estimated $100,000 for the land. The price tag for Cobb: $205,000, minus an additional subsidy. Cobb and other homeowners receive subsidies based on income of up to $75,000.

THE CATCH: Owners must offer the same deal when they decide to sell and agree to a resale price that is tied to the compounded annual increase in median income.

“I don’t look at it as an investment,” said an undeterred Cobb. “Why should I profit off something that was put into place to help me and other people?”

There are already 100 applicants.

The trust owns 15 other lots scattered throughout the city, but the trust’s board hasn’t yet finalized contracts to break ground on those. Building could take up to nine months, and the trust is working to acquire other lots through the county to meet the demand.

Some applicants are getting impatient.

“I have gray hairs from the stress,” said Marcia King, an elder caretaker for Heritage Home Health Inc. in Delray Beach.

She and her husband, Ronald King, have the necessary qualifications to purchase a home and are at the top of the waiting list. But in the interim, they’re struggling to live with their three kids in the cramped quarters of Marcia’s father home in Delray Beach.

They were offered one of the trust’s first three properties, but they said the Florida home mortgage needed to finance the home was out of their reach at $1,200 a month. Now they’re getting discouraged.

“They said they were going to find me something in our range. I don’t want granite or double doors. I want nothing fussy, but if it’s going to take another year, I’ll try somewhere else,” she said.

Ultimately, the city can only do so much.

“We’re not trying to cherry pick the easiest to serve. We’re holding people’s hands, but it’s out of our control whether or not people can qualify [for a Florida mortgage]. We can’t take all the subsidies and give it to one person,” said Joe Gray, assistant director of the city’s Community Redevelopment Agency.

For Cobb, it’s been a relatively smooth process.

“I had saved money and had all my paperwork,” she said.

Now she’s looking forward to her housewarming party.