Wanted: More Affordable Housing in N. Florida

Angela Hicks suffered many disappointments trying to buy her first home.

“I looked and looked for nine months. Everything was just out of my reach,” she told the Florida Times-Union.

An affordable housing shortage has reached a crisis in North Florida as home ownership remains out of reach for about 60 percent of the region’s work force.

Hurricanes, the resulting rise in insurance rates and construction costs, coupled with higher property values and tax increases, all during an era of historically low Florida mortgage loan rates, have caused housing prices to soar a lot faster than wages.

In Clay County (see map, in red), single-family home prices and land costs have increased about 80 percent since 2002.

NOTHING AFFORDABLE OUT THERE

A minimum-wage earner, who makes $6.40 per hour and about $13,300 a year, would need to work about 170 hours per week to afford a median-priced home in North Florida, which was about $181,000 in 2005.

The median sales price for a home in Clay County in 2005, the most recent available, was $199,100, according to the property appraiser’s office.

Officials define a home as affordable if the owners spend no more than 30 percent of their income on housing. Few homes in Clay are priced at $140,000 or less, said Barbara Taylor, coordinator of Clay County’s State Housing Initiative Partnership, or SHIP, which provides low-income families assistance when putting a down payment on a new or existing home.

Homes she looked into this year for under $140,000 were dilapidated, shed-like structures, 900 square feet or smaller, or were in less desirable neighborhoods.

“Where are our teachers, health-care workers, firefighters and police officers going to live if they can’t afford a home here?” she said. “Gardeners, housekeepers, restaurant workers?”

Another hurdle is insurance.

About 90 percent of Clay County homes were built before 1990 and some companies won’t write policies on homes more than a decade old.

The Florida League of Cities, the state Department of Community Affairs, Florida Housing Finance Corp. and Florida Housing Coalition are bringing officials, developers and housing experts together for seminars that began October 13 and end August 15 to discuss solutions that include density, changing land use and improving transportation.

North Florida real estate shot up dramatically in the past five years, and developers don’t seem to be building anything but high-end dwellings.

CONSTRUCTION LOANS

Pete Morgan and Ben Dinkins, two Orange Park, Fla., developers, are in the process of building Clay County’s only affordable housing, according to Betty Andersen, director of the Clay County Housing Finance Authority, appointed by the Clay County Commission to issue commercial real estate loans to developers who agree to their terms for selling.

The authority is funded mainly through the sale of 30-year tax-free bonds. But the market is so bad now, the authority isn’t issuing any bonds.

Existing funds were used to give construction loans to Morgan and Dinkins to build Kingsley Junction, 14 two-story cracker-style detached single-family homes on Railroad Avenue in Orange Park, priced at $140,000 to start. That makes for an affordable Florida mortgage payment for people with modest incomes.

Three homes are complete, and Hicks recently closed on the first one.

“It’s a good start place,” said Hicks, who now lives in an apartment and can’t wait to prepare her fenced-in back yard for her foster children. “I want to give them a good home where they are safe and happy. It’s very attractive; it’s what I need.”

Andersen said Morgan and Dinkins are heroes at the moment for agreeing to the project.

“There’s a real issue out there, a lack of workforce housing,” said Morgan, who is Orange Park’s mayor and serves on Clay Habitat’s board of directors. “Don’t you think teachers, policemen, firemen should be able to buy houses? These people are essential to the well-being of society, and we’ve created a scenario where they can’t afford to buy a house here.”

HOME-BUYER ASSISTANCE

To live in Kingsley Junction, income limits and buyer education classes are required. Plus, investors can’t buy and flip them for profit.

Meanwhile, Realtors say fixer-uppers — homes needing thousands of dollars worth of repairs — are plentiful in Clay County. But that’s not what most folks want, said Realtor Tiffany Lee-Pitt, adding that financial help is out there, but buyers and sellers don’t always know where to look.

“Homeowners aren’t educated enough to know about the availability of homes and the assistance programs available to them,” she said.

Some banks and credit unions have first-time home buyer assistance programs, and there are a number of government-backed programs to provide Florida home mortgage help to middle- and lower-income buyers as well.

For instance, SHIP, established in 1992, uses fees from recording deeds and Florida mortgages to help low income people put down payments on new or existing homes. The fees collected at the county level are sent to the state and a portion is returned to the county’s SHIP program. Home buyers who qualify can get from $20,000-40,000 in down payment assistance.
Hicks got assistance from SHIP.

So did Marsha Loper, a single mother who raves about the SHIP program that helped her purchase a 1,200-square-foot three-bedroom home in a quiet part of Green Cove Springs.

“Without it, I wouldn’t have been able to achieve my goal. I have been recommending it to every single person. Homes within my price range were pretty trashed,” she said.

Unfortunately, Taylor said, SHIP funding allocated for both 2005-06, and 2006-07, is gone.

“It went much faster than we anticipated. That’s an example of the need out there,” Taylor said. “I wish a bunch of developers would call me tomorrow and offer to build affordable homes.”

The U.S. Department of Agriculture’s Rural Development Office — aimed at promoting rural development — helps put low-income families in homes with very low-cost home loans.

For example, a Clay County family, with a $24,000 annual income, just closed on a home with a monthly Florida mortgage payment under $500.

There’s also Clay County Habitat for Humanity, based in Middleburg, a non-profit Christian housing program. Through volunteer labor and donations of money and materials, Habitat builds simple houses and sells them to low-income families using no-interest loans.

Homeowners are required to make a down payment, keep up the monthly Florida mortgage payments and to invest hundreds of hours helping build the home or other Habitat homes. To date, the program has helped 98 families qualify and get themselves into decent homes.