Palm Beach County Affordable Housing Plan Receives Harsh Criticism From Builders

In Palm Beach County, an affordable housing plan that took effect late last year still has South Florida home builders livid.

To help teachers, firefighters and other middle-income workers afford homes in South Florida, officials passed a zoning ordinance requiring builders to make, on average, 16.5 percent of new homes affordable in developments with 10 or more houses.

How cheap is affordable housing? From $164,000 to $304,000, based on the county’s median household income of $48,099, according to the U.S. Census.

With skyrocketing land, labor and materials costs, plus government fees and taxes, “you can hardly build a house for $304,000,” said Joshua Fowler, executive vice president of the Gold Coast Builders Association.

Fowler fears the one-two punch of the so-called inclusionary zoning and the soft South Florida housing market will drive many home builders out of town for good, resulting in job losses.

“It’s possible that some of these … builders will decide it’s too much trouble to build in Palm Beach County and close up shop,” he said.

But while builders complain about not being able to build affordable homes, they are doing just that, says Verdenia Baker, deputy county administrator, who worked with the builders to draft the ordinance.

Moreover, before the ordinance went into effect, Palm Beach County hired a consultant, who determined that the plan wouldn’t harm the local construction trade.

“I think we have been more than fair with industry,” Baker said.

She pointed out with the dual intentions of keeping businesses strong and making the cost of a Florida mortgage more attainable to lower- and middle-class borrowers, Palm Beach County made concessions, including allowing builders to increase density in order to build more homes.

But Fowler argues that the bonus density is not always usable because of wetlands or the terrain of individual parcels.

Broward County has no similar inclusionary zoning ordinance. But some local affordable housing groups there are using community land trusts to acquire parcels that builders can develop for free. If builders don’t have to pay for the land, they can construct lower-cost houses, he said.

Fowler said he and his peers agree that the high cost of housing in South Florida needs to be a priority, but he calls Palm Beach County’s plan “bad politics.”

Toll Brothers will give prospective home buyers a chance this month to meet with officials for a behind-the-scenes peek at the construction process.

On January 27-28, the nation’s largest luxury home builder will open four Palm Beach County developments, allowing visitors to preview new products, learn about land planning and check out building technology and other aspects of Toll’s homes.

Toll said fiscal fourth-quarter home building revenue fell 10 percent and orders dropped by more than half. With fewer buyers able to get the Florida mortgage loan financing needed to close on a home, the company reduced its forecast for the number of homes it plans to build this year and is also re-evaluating plans to buy land.

CEO Robert Toll said last month that the housing market might have reached bottom. That could be true in other areas nationwide, but analysts agree that home sales in Palm Beach County and up the Treasure Coast will remain tepid in 2007.