New Affordable Housing Grant, Policy Raise Some Eyebrows in Tallahassee
The city of Tallahassee’s recent decision to join a real estate developer’s application for a $5 million state grant isn’t sitting well with some affordable housing advocates.
Their concern: Almost half of the city’s $2.69 million match, or $1.2 million, would come from the city’s Affordable Housing Trust Fund.
In the past, the Tallahassee Democrat reports, money has gone to help a poorer population than the teachers, firefighters and other professionals targeted by K2 Urbancorp’s “essential workforce housing” proposal.
“That fund was not created to be used the way the city is using it,” said Dorothy Inman-Johnson, executive director of the Capital Area Community Action Agency.
But David Wamsley, K2’s CEO, said the company committed to making a $600,000 donation back to the fund, which held about $1.8 million in September. And over time, part of the new homes’ appreciating values would be funneled into a new affordable housing trust that the city could use for whatever housing projects it chooses.
Wamsley estimated that new fund would grow between $600,000 and $750,000 every five years. In the past, the existing trust fund has been used to help people pay make a down payment or for infrastructure at a multihome Habitat for Humanity project, for example.
This time, it would help K2 keep costs low enough to offer homes below market rates. But they’d still be too expensive for a lot of people for whom making today’s Florida mortgage payments would be impossible.
“It’s a legitimate philosophical discussion,” said City Commissioner Mark Mustian. “There are limited resources, so what do you use them for? We don’t have enough money now for the lower-income people, and this serves a slightly higher income group.”
Mustian abstained from voting because of a potential conflict of interest with his law firm. The other commissioners all agreed to the concept in November.
The city’s $2.69 million share, plus $358,000 in private land donations, adds up to the 15-percent match of the $20.2 million development that the state requires.
Proponents say city-developer partnerships are the way of the future and will help working class people afford homes close to where they work instead of having to move into outlying rural counties where land prices haven’t surged yet.
“The soul of the community is lost when people can’t live where they work,” said Jeffrey Sharkey, a lobbyist who helped draft the legislation creating the state grant program.
Between 2002-2005, the state’s median existing home price jumped more than 70 percent, while the median family income went up less than 2 percent, according to the Florida Association of Realtors and the U.S. Department of Housing and Urban Development.
The disparity isn’t as wide in the North Florida housing market - the median price for an existing house went up 43 percent from 2001-2006 in Tallahassee, according to the Florida Association of Realtors - but some working people are still getting priced out of the market.
To help remedy the problem, the 2006 Florida Legislature passed a housing bill that includes $50 million for an affordable-housing pilot program called the Community Workforce Housing Innovation Pilot Program, or CWHIP. The program seeks to offset developers’ costs by providing money and making permitting faster and easier.
If K2 is awarded a CWHIP grant, they propose to build 92 one-, two- and three-bedroom town houses on the site of the ongoing Evening Rose development, inside Capital Circle Northeast just north of Mahan Drive. That would almost double the number of homes at Evening Rose, which is the first development built under the city’s inclusionary-housing ordinance and is currently set to feature 99 units, 10 of which will be priced just under $160,000.
With the state grant, a two-bedroom/two-bath town house would sell for as low as $159,000, instead of the market rate of $260,000, according to the developer. Assuming a 20 percent down payment, that would knock the monthly Florida home loan payment down significantly, from $1,500 a month or more to under $1,000 at current rates.
