Palm Beach County Eases Affordable Housing Restictions On Area Developers

Palm Beach County commissioners reacted to a softening Florida housing market this week by reducing the number of cheaper homes developers would have to build under a proposed program devised to address the area’s affordability crisis.

For example, a development of 130 homes at two units per acre would have 22 workforce housing-priced homes, five fewer than previously proposed.

The decision does not affect west-central farmland where most development is expected, such as Mecca Farms and Callery-Judge Grove. There, 20 percent of the homes will have to qualify as affordable housing.

The concessions slightly gratified the local builders association, even if officials didn’t drop the number of workforce-priced homes development companies must provide to the levels they would have preferred.

And the program doesn’t guarantee significant headway will be made toward getting many of the 31,000 new affordable homes and rental units Palm Beach County projects it will need by 2010.

The mandatory program “will have an effect on projects that are proposed,” said Joshua Fowler, Executive V.P. of the Gold Coast Builders Association. “If they (builders) can’t make the numbers work, they’re not going to submit the project.”

Fowler said the association was pleased that the commission seems to have considered some things they hadn’t until now, specifically the bursting of the housing bubble. Developers had said their companies would lose jobs and be forced to build elsewhere under proposed stricter standards.

The Florida Association of Realtors this week announced the median price of an existing home in Palm Beach County dropped from $411,400 in August 2005 to $386,000 last month. Home sales have plunged and foreclosure rates are on the rise throughout the state.

Commissioners voted 5-2, with Mary McCarty and Chairman Tony Masilotti in opposition, to appease area builders but move ahead with the workforce housing program.

The program is aimed at producing homes in the $164,000-304,000 range for households earning between $38,600-96,600 a year.

Developers would qualify for bonuses that would allow them to build more homes in certain areas. Proposed county code changes would accommodate the extra homes, including traffic exemptions, changes in housing layout and a quicker permitting and review process.

As experts armed with Ph.D.’s defended the positions of Palm Beach County and the builders, commissioners agreed to reevaluate the program a year after it’s in place to consider real estate market conditions at that time. But some said it was time to do something about the affordable housing crunch.

“We are looking to one industry to solve the affordable housing issue. I don’t know whether or not that’s fair,” McCarty said. “As it stands, the construction industry is still a third of our economy. I don’t want to be drowning the industry.”

Some researchers argue that in a weak market, price increases are less readily accepted by market-rate home buyers, and the developer is less willing to build housing, either affordable or market rate. As Florida mortgage rates retreat somewhat, builders would like to wait and see what happens before being restricted under the new guidelines.

Barbara Alterman, director of the county’s planning, zoning and building department, said building permits have shifted toward multi-family homes and away from single-family homes.

In addition, the county is looking into luxury-home fees and an extra fee for commercial businesses to help pay for employee housing. A study is expected early next year.

Commissioner Burt Aaronson proposed the workforce housing formula approved by the board, and describes it as a compromise between what they endorsed in April and what local builders want.

“I want to encourage builders to keep on building. I want to keep builders employed,” Aaronson said.