‘A huge crisis’: How spending millions will add affordable housing in South Florida

Broward County could use taxpayer money to pay as much as $20 million in the upcoming year to encourage developers to build affordable housing.

It’s among the latest multimillion-dollar initiatives in South Florida aimed at addressing the housing crisis. In Palm Beach County, voters have approved spending $200 million toward adding affordable housing.

The money in Broward is considered the “gap financing” and pays the difference between what the developer has to spend on construction and what they would be able to borrow. Without the subsidy, county leaders say the developments might otherwise never be built. It’s the go-to model for affordable housing nationally, county officials said.

That $20 million number was presented to county commissioners this past week in a budget workshop, as a preview of what’s to come when they’ll be asked to sign off on the final budget this fall. If the budget is approved, the allocation would be funded by taxpayers through property taxes in the next fiscal year, which starts in October.

Broward has been enticing developers to build homes that lower-income people could afford since 2018.

This past fiscal year, the county budgeted $14 million, and has spent $12 million of it. It translated into 330 rental apartments in Fort Lauderdale, Lauderhill and Hollywood, said Ralph Stone, Broward County’s director of the Housing Finance Division.

To be eligible for the money, the developer must pledge to keep those units as affordable for at least 30 years.

The definition of “affordable” is a calculation based on household size and income. The housing costs cannot exceed more than 30% of their wages, Stone said.

“It will go a long way in solving out affordability crisis,” said Commissioner Steve Geller of the new funding. “Affordable housing is one of the biggest problems we have in Broward County.”

If workers can’t afford to live here, they can’t afford to work here, he said. “Where are we going to get our workers” such as restaurant and retail staff, he said. “That’s why it’s critical.”

The problem of housing was cited in a recent study of Broward’s employers who cite affordable housing as among their biggest struggles to find workers.

The 2023 Broward County Employer Survey was conducted by the Jorge M. Pérez Metropolitan Center at Florida International University. It was administered from November to April, and 224 employers participated.

Among the findings: The lack of affordable housing affects the ability of employers to both recruit and retain staff. And county leaders said the problem is exacerbated because there’s not one city in Broward County that is immune from a lack of affordable housing.

At the top of the list of Broward’s cities with the largest gap of affordable housing is Hollywood, which is estimated to be nearly 17,000 units short, which can include condos or rental apartments.

The numbers came from Census data and wages of families spending more than 30% of their income on housing to calculate how many people were spending more than that amount. “They are cost-burdened,” Stone said.

Also high on the list:

  • Fort Lauderdale, with a shortage of more than 16,000 units.

  • Coral Springs, with a shortage of more than 12,000 units.

Lower on the list, but still lacking affordable housing:

  • Pembroke Park, which has a shortage of 1,208 units.

  • West Park, with a shortage of 1,152 units.

“This is a huge crisis,” said Dr. Edward Murray, associate director with the Jorge M. Perez Metropolitan Center at Florida International University of the study’s results. “It’s a catastrophe.”

Palm Beach County also has been seeking remedies. In November, voters approved a $200 million bond item dedicated for affordable housing. The plan, still underway, has aimed to create thousands of new units. The plan how to make it all happen hasn’t yet been approved.

“It’s a critical need in Palm Beach County, as well as throughout the state of Florida,” said Palm Beach County Mayor Gregg Weiss. “It’s something we hear all the time, the cost of housing — from the people living here and employers trying to bring people here.”

He said he hears from the frustrated business owners that they make job offers but the response is: “People say, ‘I just can’t afford to live here.’ ”

Stone said the need is everywhere, including in Broward. “There is a deficiency in every city in the county for low, very low and moderate” income households, he said.

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That study comes after a national real estate report by RedFin that shows Fort Lauderdale home prices increased 10.6%, more than almost anywhere in the country.

But for most of the country, new listings of homes for sale dropped 19% year over year during the four weeks ending May 7.

As costs rise, the incomes can’t pay for it.

Data from the federal Housing & Urban Development department shows the Broward County median income for a family of four hovers at $88,500, Stone said — not enough to meet the housing need.

“We’re in a deeper hole,” Stone said, as values continue to rise, which is attributed to the scarcity of land.

Lisa J. Huriash can be reached at lhuriash@sunsentinel.com. Follow on Twitter @LisaHuriash