Employer-Assisted Housing: The Future of the South Florida Housing Market?

As CEO of South Florida’s largest health organization, Brian Keeley never dreamed he’d be contemplating fabric swatches and paint samples. Then again, he never thought he’d be jumping into the housing business.

But faced with the prospect of opening a sixth hospital without the 800 employees needed to staff it, Baptist Health South Florida plans to build and/or buy affordable housing to attract nurses and other workers.

“No deposit. No owner lease. Just move right in. We’ll even decorate it for you,” Keeley said. “The sole condition is you have to work for us.”

Baptist Health is not alone. The second largest employer in Miami-Dade County, the University of Miami, and the much tinier Keys Federal Credit Union have plunged into the South Florida housing market, signaling the emergence of a trend that, experts say, will spread across the state.

“Employer-assisted housing is the new buzz, the coming thing,” said Jaimie Ross, president of the Florida Housing Coalition. “South Florida will see it first because that’s where housing prices are highest, but it will work its way up.”

Indeed, it may have started at the very bottom - in Monroe County, where the average price of a single-family home is more than $700,000.

With Florida mortgage costs there so much higher than most families could afford, Keys credit union added an employee rental apartment on top of a branch office eight years ago, and is planning a dozen more.

“If we don’t help our employees, we can’t serve our members,” said president John Dolan-Heitlinger.

While few employers can build housing on their own, there is now growing interest in establishing Florida mortgage loan, rental or down-payment assistance programs as employee enticements, Ross said.

The reason is as simple as the solutions are complex.

Even with the housing market cooling off, the gap between housing costs and what employees earn is too wide. Generally, experts say, the price of a Florida home mortgage should not exceed three times the annual salary of the buyer, an impossible benchmark for many Floridians.

In January, the statewide median price of a single-family home slipped by 2 percent over the previous year to $239,300, but according to a 2005 Census estimate, the median household income in Florida hovers near $42,000, leaving the debt-to-income ratio at almost 6-1.

Nowhere is the mismatch greater than in South Florida, where the median price of a single-family house averages more than $380,000.

That’s seven times higher than the median household income in Broward and Palm Beach County, and eight times more than in Miami-Dade.

“Before the market exploded in 2004, the ratio of home value to median household income was about 4-1, a gap that could reasonably be filled by various government programs,” Murray said.

“But when we get to a 7-1 or 8-1 ratio, all government programs fail. I think that’s bringing employers to the forefront.”

Baptist’s CEO said many employees, giddy over escalating home values but fed up with rising property taxes and homeowner’s insurance, are cashing in on their houses and moving to the “new Florida” - the Carolinas, Tennessee and Georgia.

That trend leaves employers wondering how to cope with Florida mortgages so costly that vital employees are fleeing the area.

Continue reading in the Fort Lauderdale Sun-Sentinel …