Palm Beach County voters on Tuesday approved a new effort to combat the region’s affordable housing crisis, endorsing a $200 million program to encourage the building of more moderately priced homes.
With nearly all ballots counted, unofficial results showed 55% of voters had approved the workforce and affordable housing referendum.
The vote authorizes the county government to take on $200 million in debt to finance the new effort.
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The program, which will be paid for through higher property taxes, aims to encourage developers to build discounted houses and apartments by using public money to offset the profits they lose by reducing their prices.
It comes amid a historic spike in rents and housing prices.
The large-scale effort was proposed this spring by business leaders and housing advocates, who persuaded county commissioners that the plan was the area’s best bet to increase the supply of homes affordable for middle-class and low-income residents.
Supporters hope the money can spur the creation of as many as 20,000 discounted houses, townhomes and apartments in the next decade.
The result was hailed by the president of the Housing Leadership Council of Palm Beach County, an advocacy organization that played a central role in crafting and selling the referendum.
“We did all that we could do to educate people and let them know that we have a real housing shortage and that this is the way to increase the supply,” said Suzanne Cabrera, the council’s president. “I think now the work begins, and we use this as one of our tools.”
Cabrera stressed the referendum was not a silver bullet for the region’s housing problems. The council has proposed a larger housing plan that includes dozens of other proposed regulatory changes and initiatives.
“This was one part of a housing plan that has a lot of elements to it,” she said. “It’s so important that we implement the entire plan. We have to work on the regulatory issues, the community stabilization.”
But much about how the program will work remains unclear.
County officials have been vague about their plans for implementing it, and they have frequently declined to discuss it publicly. They argue that doing so risks violating state laws that bar government agencies from advocating for referendums they place on the ballot.
Success of program likely to rest on how developers feel about it
Administrators concede that how well the program functions will depend on developers’ willingness to participate. As proposed, the primary component requires developers to agree to create housing they’re willing to sell or rent at discounted rates.
In exchange, they would receive subsidies from the county government. But it’s a potentially cumbersome process that developers may choose to avoid if they believe they can earn similar or better profits building market-rate homes.
Slightly higher property taxes would pay for bond
To pay the cost of the bonds, property owners will face slightly higher property taxes. A county proposal published this summer calls, in the initial years, for charging about 2 cents in extra taxes for every $1,000 of appraised value on a property, then raising the cost to a little more than four cents in the fourth year.
For a house with a taxable value of $325,000, that would mean between $7.74 and $8.13 a year in the first three years, rising to $14.17 by the fourth.
With county administrators generally declining to discuss their plans for the bond money, advocating for the referendum fell to the business leaders and housing advocates who proposed it.
The group, an offshoot of the Housing Leadership Council , formed a political committee that raised more than $900,000 to pitch the referendum to residents. By the end of last week it reported spending more than $800,000.
The county has not set any guidelines for how the money would be spent, but the housing group has suggested half of the money be spent to create rental housing and that a quarter be used for homeowner financing.
One important question that would face county commissioners is how much money should target housing for middle-class residents and how much should target low-income housing.
Subsidizing the building of low-income housing is generally more costly, meaning fewer total units, advocates say.
The referendum vote comes as county residents face a worsening housing crisis, with rents and home prices spiking.
The county’s dwindling supply of moderately priced homes has worsened since the start of the COVID-19 pandemic and shows scant sign of improving.
Last year Palm Beach County rents jumped by 26%, one of the nation’s largest increases, according to the Federal Housing Finance Agency.
Two-bedroom apartments in the West Palm Beach area now rent for an average of $2,165, according to the national rental site Zumper, while one-bedroom apartments go for $1,650.
The lack of affordable housing for middle-class residents has left businesses struggling to hire workers.
Among the voters with strong feelings about the referendum: 22-year-old Nick Lobdell of Greenacres.
An urban design student at Florida Atlantic University, he said the housing referendum was the most important issue to him on Tuesday’s ballot.
As a soon-to-be graduate who plans on leaving his family home, Lobdell said he worries about his ability to rent or buy a place of his own after college.
“Cost of living in Florida is pretty dramatic,” said Lobdell, who voted in favor of the bond issue.
Palm Beach Post staff writer Giuseppe Sabella contributed to this story.