Reuters - A U.S. law that requires banks to serve the less affluent has widened access to credit and helped increase home ownership, but needs to evolve to address the rise in nonbank lenders, Federal Reserve Chairman Ben Bernanke said on Friday.

“Research on the CRA (Community Reinvestment Act) has tended to find positive net effects, but the results are not uniform,” Bernanke said at a Fed-sponsored conference on community development.

Research also shows the law’s effect is diminishing as national and Florida mortgage lending by nonbank institutions expands, Bernanke said.

Non-bank financial institutions include mortgage originators, payday lenders, check cashers and remittance agents, among institutions that perform specialized financial services but do not hold deposits. Such institutions are active in the very communities the CRA was intended to steer banks to.

Access to credit in lower-income communities is greater now than when the Community Reinvestment Act was launched 30 years ago, the U.S. central bank chief said. As a result, there’s more affordable housing than ever before.

“This greater access has had tangible benefits, such as the increase in homeownership rates,” Bernanke said.

At the same time, the recent rise in delinquencies and foreclosures among mortgage markets catering to borrowers with weak credit shows that simply expanding lending does not always lead to positive outcomes in less affluent communities, he said.

“How to try to differentiate ‘good’ from ‘bad’ lending in the CRA context is an issue that is likely to challenge us for some time,” Bernanke said.

The Fed and other bank regulators have come under harsh scrutiny from lawmakers for failing to anticipate problems in markets for borrowers with weak credit, referred to as bad credit Florida mortgages because they carry higher risk.

Bernanke said nonbank institutions have become “important sources of financial services” in low and moderate income communities. However, high fees charged in some instances by those businesses have raised concerns, he said.

Banks might be prodded through the Community Reinvestment Act to compete more actively with nonbank lenders in lower-income neighborhoods, he said.

A 2005 revision of Community Development Act rules has eased some of the regulatory burdens on financial institutions, Bernanke said.

A state House council Wednesday supported a measure to keep property taxes low for some Florida homeowners, earning praise from Manatee County leaders trying to offer more affordable housing in the area.

Rep. Keith Fitzgerald (D-Sarasota), pushed his bill - which may greatly help those in need of affordable Florida mortgage loan financing - through the Government Efficiency and Accountability Council by unanimous vote.

The proposal would ensure that homes built on community land trusts, which are designed to provide permanent low-cost housing, are not subject to the kind of rising property taxes plaguing other state homeowners.

When moving into homes set up by a community land trust, people are buying only the building with their Florida mortgages, not the land. The houses are relatively inexpensive, but to make sure they stay that way, the land trust limits how much owners can ask for them if they move.

Fitzgerald’s bill creates a framework for taxing the land-trust homes at rates reflecting that resale limit, instead of their fair market value.

By keeping the homes’ property tax rates low, Fitzgerald said, his proposal would pave the way for more Floridians to become homeowners.

“Working people, young people, people on fixed incomes are having a very difficult time finding places to live, and it affects the entire economy,” Fitzgerald said.

The Manatee Chamber of Commerce is also backing new affordable housing measures, hoping they can help attract workers wary of home costs in the Southwest Florida housing market.

As of December, the median price for a Manatee County home was more than $240,000, said Robert Bartz, president of the chamber. At the same time, the median household income for the county hovers just under $45,000.

“To us, that’s a very sad state,” he said.

Chamber officials have been keeping in touch with the area’s legislative delegation to make affordable housing a top priority, Bartz said.

“I think whatever they’re doing in Tallahassee right now, it’s admirable,” he said.

Fitzgerald’s bill, which has a companion measure in the Senate, has to be heard in one more council before reaching the House floor.

“It’s a big challenge,” Fitzgerald said. “Anything we can do to help them keep housing stock in the affordable category is very important.”

What’s next?

The bill has to clear the House Policy and Budget Council before it can be heard by the entire House. A similar Senate bill must then advance through the Senate’s committees on Community Affairs, Finance and Tax and General Government Appropriations. The Senate bill is still waiting to be heard for the first time.

Hopefully, this measure achieves success and will allow for greater Florida mortgage affordability for residents of Southwest Florida.

SOURCE: Bradenton Herald

A local group of urban planners, developers and advocates is betting it can help the South Florida housing market in finding solutions to an escalating affordable housing crisis.

According to the Miami Herald, the group is putting local governments on notice that the effort is going to take great cooperation.

That means revising onerous development policies and laws, dedicating surplus land and coming up with creative subsidies, all things many leaders have been slow to do.

The chairman of the Urban Land Institute’s South Florida Workforce Housing Initiative promises the pilot program won’t become yet another academic exercise that results in a study sitting on a shelf.

“Our focus is getting things built, and I’m not interested in chairing a group that isn’t going to get in people’s faces and get things changed so that can happen,” said Michael Wohl.

The seed money for ULI’s Workforce Housing Initiative is a $5 million gift from former ULI chairman J. Ronald Terwilliger. The goal: to build 3,500 affordable housing units in the markets within five years.

The project director for the South Florida initiative, who has not yet been hired will be based in ULI’s office in Pompano Beach, said Carla Coleman, executive director of the local district. She said the time is right to persuade local leaders to change policies.

“It is critical now, and people are beginning to listen now,” Coleman said. “We don’t have to make a case anymore that this is a crisis.”

The South Florida team initially will focus on projects in Miami-Dade, Broward and Palm Beach County. The team include developers, government officials, planners, finance specialists from federal programs such as Fannie Mae, and others from the public and private arenas.

The initial step will be to take a quick overview in the next three months to identify obstacles on both the builders’ and home buyers‘ ends.

The aim is to answer this vexing question:

How does the region eliminate the hurdles discouraging developers from building modestly priced housing despite rabid demand from workers such as teachers, nurses, firefighters and police officers - all of whom are vital to the economy, but have limited cash to spend on a Florida mortgage.

Once the the most efficient ways to get homes out of the ground are found, the hope is that the same strategy can be repeated all over the state and more residents will be able to qualify for Florida mortgages.

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Hilltop Gardens Mobile Home Park is dying. The once lively park with the fruity street names now is mostly deserted. An eviction notice of April 30 is in effect.

According to the Palm Beach Post, the dozen or so residents left at the 150-trailer park said it’s yet another affordable housing oasis gobbled up by developers.

“We have nowhere to go,” said Gustavo Jimenez, a cook who paid $8,000 for the single-wide trailer two years ago and was given $2,000 by a developer to leave the trailer.

In a part of the state where Florida mortgage costs are astronomic compared to what lower- and even middle-class residents make, the mobile home park offered a reprieve. No longer.

The owners, Hilltop Residential LTD, plan a townhouse development to be built by California-based Standard Pacific Homes. Hilltop bought the park just east of H.L. Watkins Middle School in 2005, sending out eviction notices requiring residents to leave by October 2005.

The notice complied with the Florida Mobile Home Act which requires owners to give residents at least six months eviction notice. Residents hired lawyer Karen Mentor and filed suit in Palm Beach County Circuit Court, which ruled tenants be given another 12 months to stay.

The ruling requires the new owners to reimburse residents up to $6,000 to sign a bill of sale and move their double-wide mobile homes. Residents are given $3,000 to move single-wide mobile homes.

“These people are getting bulldozed. They should at least give them enough to start somewhere. This amount is not even close to a down payment in Palm Beach County,” said Mentor.

Resident Bill Armstrong, 56, plans to move in with his mother. When he and his wife Monika bought their single-wide, their plan was to improve their investment and sell for a profit. Hurricanes and a slow South Florida housing market ended that idea.

“This was a beautiful place when we moved in,” he said, nodding to the empty mobile homes and silent streets around him. “Now look at it.”

Where a multitude of residents go from here in this environment of super expensive Florida mortgage loan payments remains to be seen.

Continue reading in the Palm Beach Post …

The following is a Tallahassee Democrat editorial regarding the state’s affordable housing spending cap, and what the publication believes is necessary to lift the increasingly large burden of exorbitant Florida mortgage costs on Sunshine State residents …

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When Great American Realtor Day is celebrated in the Florida Capitol on April 11, one of the messages that lawmakers will receive, loud and clear, is the continuing need for affordable housing for our state’s work force.

One of the existing, tried-and-true incentive programs for that particular part of the housing market is the 15-year old Sadowski Act Trust Fund.

It helps working families become homeowners (through affordable Florida home loans) thanks to a variety of public-private partnerships.

It’s funded by 20 cents per dollar of revenue collected via real estate documentary stamps and, because it is set up to rise as Florida home prices rise, it provides trust funds that reasonably follow market demands.

The trouble is, Florida lawmakers started raiding a variety of state trust funds several years ago, and in so doing they effectively capped the Sadowski Fund, freezing it at $243 million a year.

• Without the cap, implemented in 2005 to go into effect this July, proceeds from the doc stamps this coming year would provide $414 million.
• That’s nearly twice the funds available to help ease the housing crisis, stimulate economic competitiveness, and improve Florida’s hand in attracting and retaining a strong workforce.

Support last week from Gov. Charlie Crist for lifting that cap ought not be lost on lawmakers who may still be tempted to raid trust funds for unrelated causes.

It is certainly important to periodically re-examine all trust funds for relevance, efficiency and effectiveness. In fact, the Sadowski Act and all others are up for reauthorization on a regular basis.

In the meantime, though, we applaud the governor’s comments last week to the Florida Times-Union, that legislators should “lift the arbitrary cap” and allow the Sadowski Fund “to do what it was intended to do.”

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No question about it, affordable housing is one of the biggest struggles facing the state’s real estate market in the coming years and beyond. The best means of ensuring Florida mortgage payments residents can afford is the subject of heated debate. Only time will tell where it may lead.

SOURCE: Tallahassee Democrat

Call Green Cay Village controversial. Call it energy-efficient, as Florida Power & Light does. Or call it affordable housing, as Palm Beach County does.

Loren Mulligan - a 43-year-old single mother of twins and teacher at Loggers Run Middle School in Boca Raton - calls Green Cay Village, a workforce housing development west of Boynton Beach, something simpler: home.

“A big burden has been taken off my chest,” said Mulligan, who moved in nine days ago. “I was renting, and I couldn’t find anything to buy in my price range until this.

“Now I have a home, and I don’t have to worry anymore.”

Mulligan put down a deposit the first week Green Cay Village opened its sales office and was among the first new homeowners to move into the 420-unit development at the corner of Jog and Flavor Pict roads.

The $85 million collection of Florida condos, townhouses and apartments is priced to be affordable for teachers, nurses and police officers - the county’s “essential workers.”

Instead of marketing Green Cay Village in the typical way, the developers went straight to where they knew the buyers were: police stations, schools, hospitals, county government offices and the like.

They did this even before Palm Beach County mandated that developers set aside a percentage of their new homes for workforce housing.

“When we first started, the term ‘workforce housing’ wasn’t even invented,” said Green Cay Village developer Jerry Goray of Goray Communities in Boca Raton. “We said we were going to build for Middle America - people who have been priced out of the market.”

Palm Beach County was one of those markets.

In just five years of boom-time housing appreciation, existing-home prices soared by triple digits in Palm Beach County, but incomes rose by a measly single digit, making Florida home loan acquisitions nearly impossible for many residents.

In fact, a startling survey last year by the Housing Leadership Council of Palm Beach County concluded that as many as 90 percent of households could not afford to buy the median-priced single-family home, which cost $392,900 in the first quarter of 2006.

Home prices have remained relatively stable this year as the market cooled down, dropping in February to a median price of $374,300 for an existing single-family home and to $209,600 for an existing condo, according to the Florida Association of Realtors.

The prices at Green Cay Village range from a more affordable $198,900 to $299,900, however, making all the difference in the world to prospective applicants for Florida mortgage loans.

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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

The threat of hurricanes, rising Florida mortgage costs, spiraling property taxes and ever-rising insurance premiums.

These are some of the many reasons for the housing squeeze experienced by low- and moderate-income families in the Sunshine State.

As part of the solution, a coalition of religious groups, growth-management activists and business leaders is asking the State Legislature to eliminate a law that limits state spending on affordable housing programs.

The Florida Catholic Conference, which represents the state’s bishops on public policy, is extremely active in the effort to make sure people who can’t afford a Florida mortgage at market rates have a chance to own a home.

Jaimie Ross, affordable housing director for 1,000 Friends of Florida, a Tallahassee-based watchdog group, says unless the cap is repealed, state affordable housing programs will lose up to $1 billion in funds.

“Right now, we’re on the defensive,” she said. “We’re not even asking for increased funding. We just want lawmakers to get rid of the cap.”

In 1992, Florida lawmakers enacted a landmark affordable housing law in memory of William E. Sadowski, the former Miami lawmaker who died in a plane crash that year.

Under the Sadowski Act, a portion of the cash raised from the documentary stamp tax on property tax revenue was dedicated to funding affordable housing projects; 30 percent of the money was allocated to the state and the remainder of the money was distributed to local governments.

Taxes on real estate transactions were deliberately chosen as the funding source so that spending for more affordable housing could keep pace with activity in the marketplace.

As the Florida housing market market flourished during this decade, money for affordable housing poured into state coffers. Since 2003, however, lawmakers have refused to appropriate all of the taxes collected.

In each of the last two years, lawmakers have allocated $400 million in affordable housing spending - a boon for residents who cannot afford the Florida home mortgage loan payment on a market-priced property.

This year, a law goes into effect that caps annual appropriations for these programs at $243 million, regardless of what funds are actually available from the real estate tax.

“We haven’t been able to get by on $400 million a year,” says Ross, “So we definitely can’t get by on $243 million.”

According to Robert C. Stroh, director of the University of Florida’s Shimberg Center for Affordable Housing in Gainesville, “There are parts of this state where the cost of housing is so high and payment received by service workers is so low that there is nothing affordable available.”

In the Miami area, the median price for a single-family home was $371,000 last year, up from $286,000 just two years earlier, according to the National Association of Realtors.

As the cost of Florida mortgage loans increases along with property values, so have the cost of property taxes and insurance.

That’s hammering private citizens - but the rising cost of land has hit commercial real estate owners particularly hard.

The Constitution exempts $25,000 of homestead exemption property from taxes and limits the growth in property taxes as long as the home remains in existing hands. Neither of these constitutional limits on property taxes applies to land owned by a business.

The lack of tax limits on commercial real estate helped lift property tax funds by 80 percent from 1999-2006. Property taxes now exceed sales and use taxes as the largest source of government revenue in the state.

Follow the link below to continue reading in Florida Catholic …

South Florida has become one of the world’s least affordable markets for housing, and for several years now, Boca Raton has been struggling with the issue of affordable housing.

An ordinance addressing the problem has long been in the draft stages, but has yet to see the light of day. But right across the border in Delray Beach, city officials are applauding the fact that the community has an affordable housing ordinance, a land trust and homes that are occupied by middle-income workers.

The only actual step Boca Raton has taken is to create a trust fund for affordable housing. The Stiles Corp. of Fort Lauderdale, which plans to build 172 homes on Yamato Road, has chipped in $3 million.
But there is no ordinance dictating how the fund can be used.

This past week, Delray Beach climbed a couple of rungs on the affordable housing ladder by approving zoning changes allowing for mixed-use developments to include workforce housing provisions.

When you’re struggling to afford a Florida mortgage, as many are, that can make all the difference in the world. The community also signed off on a $200 million deal to demolish the hurricane-damaged and vacant Carver Estates project and develop workforce housing there.

The Delray Beach Housing Authority (DBHA) voted unanimously to designate Auburn Development Group as the master developer.

The move conveyed the 18 acres into a public/private partnership between the Housing Authority and Auburn, marking the first step in what will be the development of the Villages of Delray, a $200 million, 50-acre mixed-use, mixed-income community.

Officials said it will have market rate rental and for-sale homes, as well as workforce and affordable housing for those who can afford only modest Florida mortgage loans. With more than 400 residences, this becomes the state’s largest community of its kind, officials believe.

The 18 acres will be combined with 11 acres being provided to the public-private partnership by Auburn Development for the workforce and affordable rental housing component of this community. The community is located east of I-95, between Linton Boulevard and Atlantic Avenue, about a mile and a half from the ocean and less than one mile from downtown.

“The Housing Authority is excited about beginning the development of this area and providing quality housing for our citizens,” said Joseph Bernadel, chairman of the Delray Beach Housing Authority (DBHA).

“This community is part of the ongoing efforts toward the growth of Delray Beach. It is our hope that this will be a national and statewide model for how the public and private sectors can work together to provide affordable housing opportunities for a wide range of residents.”

Developers might get a free pass from affordable housing rules in the pricey new neighborhoods spreading across Palm Beach County’s Agricultural Reserve.

Rules intended to keep some new homes priced for teachers, police officers and other middle-class workers could be waived under an exemption the county is proposing for the 21,000 acres of farmland giving way to suburbia west of Boynton Beach and Delray Beach.

County officials say enforcing the affordable housing rules in the Agricultural Reserve would end up allowing the construction of more homes on land the county wants to protect for farming. Approving an exemption avoids the “bonus” homes the county allows developers to build to compensate for limiting some home prices.

“We just did not want any increased [development] in the Agricultural Reserve,” said Barbara Alterman, the county’s executive director of planning, zoning and building.

But with the county continuing to allow hundreds of new homes to spread across prime farmland, it makes sense to require limiting some Florida home prices, said Jaimie Ross, affordable-housing director for the development watchdog group 1,000 Friends of Florida.

“This is suburban sprawl, where people are building McMansions,” Ross said about development in the Agricultural Reserve. “There isn’t any reason in the world that affordable housing cannot and should not be included in those areas.”

County commissioners in November finalized rules that require a percentage of homes in new neighborhoods to be priced from $164,000 to $304,000 for low- and middle-income buyers at risk of being priced out of the Palm Beach housing market.

Most new developments are required to keep about 16.5 percent of new homes priced in the affordable range, with the number going up or down depending on the size of new neighborhoods. The goal? To provide Florida mortgage opportunities those at all income levels.

However, a proposed change to county land development rules would exempt two areas prime for high-end development from those requirements.

One area is coastland, about 23 unincorporated acres near Jupiter, which state officials consider too susceptible to hurricane storm surges for the additional homes allowed under the county’s affordable-housing rules.

The other area is the Agricultural Reserve.

Squeezed between the Arthur R. Marshall Loxahatchee National Wildlife Refuge and neighborhoods spreading west of Delray Beach and Boynton Beach, the land in the Agricultural Reserve offers some of the warmest year-round temperatures in the state — making it ideal for growing peppers, tomatoes and cucumbers.

With land-hungry developers threatening to transform the area, the county in the late 1990s created building guidelines intended to preserve land for farming amid new neighborhoods. Voters in 1999 approved using $100 million in bonds to preserve land for farming, which helped purchase about 2,500 acres.

Developers claim much of the remaining land. More than 2,300 homes have been built in the Agricultural Reserve, with 5,900 more approved and awaiting construction, according to the county.

Also, three developments totaling 731 homes are now going through the county’s approval process. Builders want these residences to be available to Florida mortgage loan borrowers.

Requiring developers there to limit some home prices without allowing them to build more homes to compensate for lost prices could open the county’s affordable housing rules to legal challenges, Deputy County Administrator Verdenia Baker said.

A cooling Florida housing market should help rein in some home prices in the Agricultural Reserve, “but not enough for the number of people who need it,” Baker said.

While the exemption would let developers off the hook for affordable housing in the Agricultural Reserve, the county is also considering a new fee on luxury homes.

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