Palm Beach County Mulls New Affordable Housing Fee System

A fee to help build affordable housing may be tacked onto the cost of new luxury homes in Palm Beach County.

County officials are surveying 3,500 residents to determine whether there is a link between luxury homes and the county’s ongoing housing crisis.

The logic: Owners of luxury homes hire many workers, including lawn crews, nannies, pool cleaners and maids, who might not earn a living wage for their work.

Under the plan being considered, money raised with a “luxury home fee” would go into a fund that would pay for cheaper homes for the county’s workforce. The fee would help offset the lower salaries luxury homeowners pay their employees by creating affordable housing for workers to live.

“The theory is whenever you build a luxury home in Palm Beach County, you generate the need for people to provide services in the home,” said Willie Swoope, the county’s impact fee coordinator.

“Those people will have a need for affordable housing.”

A growing shortage of affordable homes and rental units amid skyrocketing Florida mortgage costs has left county officials scrambling for solutions.

A county study shows a shortage of 93,000 homes through 2020 for households now earning up to $93,150, or 150 percent of the county’s median income.

The survey was sent to a sampling of homeowners across all property values. It asks residents what kinds of services are provided by their homeowners association, property management company or on-site caretaker.

As part of its study, the county also is mulling a “linkage fee” on new commercial businesses and big-box retailers that don’t provide high-paying jobs. The money raised would flow into the same housing pot.

County officials have been discussing the luxury home and linkage fees in the past year while working on a mandatory workforce housing program, which requires developers to set aside a percentage of homes in the price range of $164,000 to $304,000 for all new developments.

Developers, in turn, are granted the option to build more homes in their projects - an option officials believe will result in more housing units, and with that increased supply, lower Florida home mortgage payments.

The local builders association has not taken a stance on the proposal for a luxury home fee, but it questioned whether it makes sense, considering the ongoing fight over property taxes and the Florida housing market downturn.

Building permit applications for single-family homes in Palm Beach County are down more than half - from 210 to 101 - for the first two months of 2007 compared with the same period in 2006. Rebecca Caldwell, director of the county building department, attributes the drop to the slowing market.

Jaimie Ross, president of the Florida Housing Coalition, said more local governments are turning to fees to generate money for affordable housing.

“It’s coming,” she said. “All residential housing does create a need for affordable housing, because people who are going to live in that house are going to need the services of people who need affordable homes.”

SOURCE: Palm Beach Post