[1] “Bridging the Gap” pp. 30.

[2] Ibid, pp. 9.

[3] Lena’s real estate site.

[4] “History of HUD” www.hud.gov.

[5] “Bridging the Gap”, pp. 29.

[6] “Bridging the Gap”, pp. 14.

[7] Department of Community Development, www.lee-county.com/dcd; accessed October 4, 2006.

[8] Policy Memorandum: Affordable Housing Methodology.

[9] Comprehensive Planning Department, www.colliergov.net; accessed October 3, 2006.

[10] “Bridging the Gap”, pp. 28, accessed from www.swfrpc.org on October 1, 2006.

 

 

 

 

 

 

 

Lee County Local Housing Assistance Plan (LHAP)

 

 

 

For the 2005/06 and 2007/08 fiscal years, 65% of SHIP funds must be used on home ownership activities (LHAP, pp. 8); the funds can be distributed through new construction, down payment/ closing cost assistance, and rehabilitation

 

In this process, the county in question earmarks a percentage of the funds and offers it to non-profit affordable housing providers (who meet state SHIP standards and are selected by members of the SHIP program), who use the money to pay for purchase of land, site preparation, infrastructure, permitting fees, construction, down payment assistance, or other construction related costs.  The home owners receive a mortgage that has zero interest, deferred payment, and is non-amortizing.  This means that the homeowners do not pay a monthly sum to pay off their mortgage but rather owe a lump sum at the end of a set number of years.  Also, if the home owners retain the property as their principal residence for more than 15 years, the mortgage is forgiven.   The home owners are also required to participate in the process with a certain amount of sweat equity.  Eligible parties, as determined by HUD, are of very low, low, and moderate income levels.

 

For rental properties, available SHIP funds can be used to pay for construction or rehabilitation of the rental property, permitting, pre-development costs, weatherization, code compliance, emergency repairs, disability accommodations, and conversions.  Appropriations for rental properties are assessed on very low, low, and moderate income levels.

 

There is also a stipulation, the Disaster Mitigation and Recovery plan, which applies to very low, low, and moderate income housing to provide special funds during times of emergency for rehabilitation and recovery of homes.  It is up to the county to decide whether to implement this plan based on the severity of need.

 

Affordable Housing Developments/ developers can apply for and receive expedited permitting

 

Proposed Solutions

From “Bridging the Gap”

1. Redevelopment and rehabilitation of existing structures
2. Increased density along transportation corridors
3. Reduce regulatory requirements

Ø      Leveraging federal and state funds

Ø      Impact fee waivers

Ø      Tax credits

Ø      Using local funds to fill the gaps

·        Question: if reduce regulatory requiremtns, where is money to fund infrastructure improvements; also penalizing those above moderate income levels

 

From SWFL Regional Planning County DRI Affordable Housing Condition

1. Require applicant for DRI permit to construct/ have constructed an appropriate number of affordable housing units on 5% of DRI property boundaries
2. Require developer to provide for off-site affordable housing units outside of the DRI boundaries; the off-site tract must be located within a 10-minute drive or 10 miles from the DRI site
3. Require the developer to make a financial contribution to an existing affordable housing program within the county; the sum of the donation would be calculated at 5% of the down payment necessary to get a 95% mortgage for a house within the DRI

 

From the Florida House of Representatives Select Committee on Affordable Housing, 2004

1. Homeownership Initiative
   • Increase the amount of available tax credits from $10 million to $20 million annually [not stipulated how that would occur]
   • Reserve 80% of credits for affordable housing projects
   • Give credits to deserving projects based on a formula of need, not a first-come, first-served basis [not stipulated what the formula would be]
2. Provide financial appropriate to Florida Housing Finance Corporation for marketing and public information concerning affordable housing programs
   • Maintain the First Time Homebuyer Program, which uses proceeds from revenue bonds to finance 30-year fixed rate mortgage loans for first-time homebuyers
   • Continue the HAP Downpayment Assistance Program, which provides second mortgage loans (not larger than $10,000) to individuals/ families whose income is under 80% of the area median income
   • Retain the HAP Construction Loan Program, which provides non-profit developers and sponsors with up to 33% of the total development costs in building affordable housing units
   • Continue to fund the SHIP program
3. Integrate manufactured homes as a form of affordable housing
4. Expand and clarify the definition of persons of “low income”

 

From the Millennial Housing Commission Principal Recommendations to Congress

1. Strengthen communities by providing affordable housing in an environment that would provide strong community ties with good schools, job opportunities, and public safety

      *Does Lee County’s designated affordable housing in Immokalee fit this?

2. Allow greater decision making from local and state representatives than from only the federal government
3. Offer effective incentives to the private sector to produce and preserve affordable housing
4. Design programs to sustain and maintain existing affordable housing units over the long term
5. Allocate a new tax credit to stimulate production of suitable affordable housing units; currently over 90% of the benefits  of the mortgage interest deduction go to incomes over $40,000
6. Implementation of a preservation tax credit
7. Provide 100% capital subsidies for construction, rehabilitation, acquisition of affordable housing units for extremely low income households
8. Over time, link housing assistance with work requirements with eligible applicants (i.e. not the elderly or disabled)

 

From the 1997 Report on Managing Local Opposition to Affordable Housing: Strategies and Tools

1. Initiate and support inter-governmental and inter-departmental collaboration
2. Initiate and support reform of zoning ordinances, planning codes, and housing policy to comply with federal and state laws for affordable housing

 

Miscellaneous Information

Since the 2000-2001 fiscal year, affordable housing has received over 85% of the tax credits awarded each year.

 

In the original contracts in the 1960s and 1970s, affordable housing complexes were allowed to “opt out” of the affordable housing program once their 40-year mortgage was up.  There was also a stipulation that after 20 years, affordable housing complexes could prepay the rest of the mortgage payment and opt out of the payment early.  As these mortgage contracts came up in the 1990s, many complexes decided not to renew the affordable housing contracts because of a strong real estate market.

 

As of 2001, there were 6.4 million extremely low income households living in unaffordable housing.

 

In 1999, the median extremely low income household paid 54% of its income for housing.

 

The number of FHA (Federal Housing Administration) Insured Multifamily Units has dropped significantly since its inception in the 1970s.  In the 1970s, there were approximately 1.2 million insured multifamily units.  In the 1980s, this number dropped to approximately 1.1 million and the 1990s, the most significant drop occurred with only 700,000 multifamily units being insured.

 

In the FY 2006 budget proposal, $200 million was set aside for the HOME program for the American Dream Downpayment Initiative.

 

Any agency that receives a direct assistance under HOME or CDBG from HUD must submit a Consolidated Plan to HUD every 5 years.  The Consolidated Plan must include the following:

·        a housing and homeless needs assessment that outlines the numbers and types of families in need of assistance, the nature and extent of the community’s homelessness and the number of persons requiring supportive housing

·        a housing market analysis that contains descriptions of the supply, demand, conditions and costs, and housing stock available to serve individuals with special needs, as well as an accounting of the jurisdictions public and assisted housing

·        a general strategic plan that describes general housing, homeless and special priorities as well as priorities for geographical investment of resources

·        a yearly action plan that specifies the resources a community will use and the activities it will undertake to address it priority needs over the coming year.

 

In Lee County, affordable housing initiatives have constructed 9,452 units that fit the parameters of affordable housing provisions.

 

HUD’s proposed budget for FY 2004 was $31.3 billion.

 

New Construction (DRI) Requirements

New construction of DRI communities is required to address affordable housing concerns in their Application for Development Approval and in their Development Orders.  There are currently 135 active (ongoing, expired, or built-out compared to abandoned, denied, or withdrawn) DRI communities in Lee, Collier, Charlotte, Glades, Hendry, and Sarasota counties.  Of these, 35% have some type of affordable housing requirements.  There are 23 approved DRIs with affordable housing requirements.

 

Question 24 of the DRI Application for Development Approval (ADA) specifically asks for information on adequate affordable housing availability and accessible employment opportunities.

 

East Central Florida RPC Affordable Housing Methodology involves:

1. Projecting number, type, and wage of employees needed for DRI project
2. Estimate the number of these employees who will need affordable housing
3. Estimate whether adequate affordable housing exists within a reasonable distance of the DRI

 

Analysis shows that there is adequate affordable housing opportunities within a reasonable distance from the project but in application, local jurisdictions have found that it is not always so.  Rising land costs and increasing impact fees have resulted in fewer affordable housing permits being issued.

 

Ave Maria (passed by the Collier County Board of County Commissioners, 6/14/2005)

In addition to the university village plans, the developer must also construct 1,000 moderate income residences, 700 low income properties, and 200 very-low income units.  Also, the developer must provide a 28-acre parcel for use by Habitat for Humanity, who can construct up to 150 very low income dwellings.  These affordable homes must be built proportionately to other non-residential buildings so as to provide affordable housing for workers and staff.

 

Arborwood (approved by City of Fort Myers City Council on 9/20/2004)

The developer, Worthington, will donate a sum of $25,000 to the city for the city to use in purchasing land for affordable housing units or for the city to use in low income loans for improvement of existing affordable housing units.

 

Northwood (approved by the City of Fort Myers City Council on 9/20/2004)

The developer must donate a sum equal to 30 rental units for very low income employees, ie a sum of $225,000.

 

Heritage Bay (approved by the Collier County Board of County Commissioners on 7/29/2003)

The developer must construct, on designated lands, a minimum of 160 townhouse units and a maximum of 190 units that meet the affordable housing price levels as approved by Collier County.  Also, if all of the units are not initially sold before a CO is issued, the developer must offer the unsold units for sale to the County for 45 days at the affordable housing rate; after that, any remaining unsold units may be offered for sale at market value. 

 

The developer also has to donate $450,000 to Habitat for Humanity, who will use the funds on affordable housing sites located south of Immokalee Road and east of CR 951.  The affordable housing units must be built before the final CO is issued for the overall development.  If the developer does not construct the maximum of 190 townhouse units, the developer must donate $10,000 per unbuilt unit to Habitat for Humanity.

 

Coconut Point (approved by the Lee County Board of County Commissioners on 10/21/2002)

The developer must provide 150 total units of affordable housing consisting of a combination of very low, low, and moderate income levels on or before December 31, 2006f.  If the developer does not build these 150 units by December 31, 2006, the developer must pay $4,000 for each unit of shortfall to the Lee County Affordable Housing Trust Fund.

 

The developer must also donate $400,000 to FGCU to subsidize further student housing.

 

Current (2004) Affordable Housing Programs Offered by the State of Florida

(From the Florida House of Representatives Select Committee on Affordable Housing Report, 2004)

 

Federally Administered Programs

U.S. Department of Housing and Urban Development (HUD)

*2002 funding amounts are what HUD gave specifically to the state of Florida

 

1. Project Based Section 8: provides rental subsidies for a contractually specified amount of time; targeted to individuals/ families in the 0-50% Area Median Income (AMI) range; in 2002, HUD appropriated $541.9 million.

 

2. Section 202: offers interest-free capital advances to private, non-profit sponsors to finance development of affordable housing for elderly population; the advances do not have to be paid back if the housing units serve very low income elders for at least 40 years; serves the target population of 0-50% AMI; HUD appropriated $5.2 million in 2002; proposed $783 million in 2004.

 

3. Section 236: provides a subsidy to reduce mortgage interest payments in order to develop rental housing for low-income families; the subsidy is the difference between the mortgage interest rate and 1%; serves 0-80% AMI; 2002, HUD appropriated $10.8 million to support existing units.

 

4. Section 811: provides interest-free capital advances to nonprofit organization for the development of rental housing for very low income adults with disabilities; it also provides subsidies to make housing more affordable; the advances do not have to be repaid as long as the rental housing serves the target population for at least 40 years; designed to help those in the 0-30% AMI range; 2002, HUD committed $1.2 million.  In 2004, HUD proposed $251 million.

 

5. Project Rental Assistance Contract (PRAC): HUD enters into a contract with apartment owners and provides funds to cover the difference between operating costs and the amount contributed in rent by the tenants; works with Sections 202 and 811; serves 0-80% AMI; $16.2 million were appropriated in 2002.

 

6. Project Assistance Contract (PAC): Contract between HUD and development owner to aid low income families in leasing assisted units; amount of HUD payment is equal to the difference between the contract rate and the rate the tenants’ are paying; serves 0-80% AMI.

 

7. Public Housing: currently funds the operating, maintenance, and improvement of existing public housing units as owned and operated by the Public Housing Authorities; the rental rates are well below the market rates; this program was designed to serve 0-80% AMI but actually serves primarily those in the 0-30% AMI; HUD committed $141 million in 2002.

 

8. HOPE IV: aids communities in either rehabilitating or eliminating severely distressed public housing; based on the community’s wants, the program offers either a rehabilitation grant, which develops both rental and single family housing for purchase, or a demolition grant; designed to serve 0-50% AMI; HUD gave $57.1 million in 2002.

 

9. Section 8 Certificates/ Vouchers: provides rental assistance for income eligible (as determined by HUD) who use the vouchers to lease units in the private market; tenant pays 30% of his/her income and the voucher pays the landlord the difference between the 30% and the Fair Market Value of the property (as determined by HUD); designed to serve 0-50% AMI but actually serves 0-30% AMI; HUD gave $410 million in 2002.

 

10. Shelter Plus Care: provides rental assistance to supportive services of hard-to-serve individuals and their families (i.e. homeless persons with disabilities, chronic drug/ alcohol problems, or individuals with AIDS and their families); serves 0-30% AMI; HUD committed $4 million in 2002.

 

11. Supportive Housing Program (SHP): develops supportive housing and services that allow homeless people to live independently; the program primarily focuses on individuals with disabilities; applicants eligible for SHP funding include state and local governments, Public Housing Authorities, and private nonprofit companies; serves 0-50% AMI; HUD gave $36.8 million in 2002.

 

12. American Dream Downpayment Initiative: started in FY 2002, this program targets funding under the HOME program to help eligible low income families to purchase a home; HUD appropriated $400 million in 2004.

 

Federal Housing Administration (FHA)

1. Section 203 (b) Mortgage Insurance Program: provides mortgage insurance for households to purchase or refinance their principal residence; the mortgage loan is provided by a local lending institution and eligible applicants can receive up to 97% financing; applicants are required to pay the annual mortgage insurance premiums; serves up to 150% AMI; HUD endorsed $7 million in loans in 2002.

 

U.S. Department of Agriculture – Rural Development (RD)

1.   Section 515: provides competitive loans to developers who provide affordable multifamily rental housing; 95% of the tenants must have very low incomes in new units; in existing units, 75% of the tenants must have very low incomes; designed to serve 0-120% AMI but actually serves 0-30% AMI; RD spent $4.5 million in 2002.

 

2. Section 521: provides rental assistance to make sure that those living in RD financed housing complexes can afford their rent payments; qualified applicants pay no more than 30% of their incomes for housing; serves 0-50% AMI; RD paid $31.3 million in 2002.

 

3. Section 514/ 516: provides rental housing for farm laborers; gives loans that can be used to buy, build, improve, or repair housing for farm laborers (including aquaculture and on-farm processing); funds can also be used to construct housing, day care facilities, or community rooms or purchase furnishings or pay construction loan payments; serves 0-30% AMI; RD gave $3.8 million in 2002.

 

4. Section 502 Direct Loan Program: provides direct financial assistance to individuals or families in home loans at an affordable interest rate, as determined by RD, for the purchase of an existing home or construction of a new home; loan terms are typically for 33 years and no down payment is required; serves households below 80% AMI.

 

5. Section 502 Sing Family Housing Guaranteed Loan Program: assists low income households in purchasing homes in rural areas; eligible applicants receive funds through RD approved lending organizations (such as State Housing Agencies, Farm Credit Systems, VA, Fannie Mae or Freddie Mac, etc.); funds can be used to build, repair, renovate, or relocate a home or purchase and prepare a new construction site; eligible applicants must be without adequate housing but have adequate credit and be able to afford the mortgage payments including taxes and insurance; applicants can have up to 115% AMI.

 

6. Section 523 Mutual Self-Help Housing Program: allows future home owners to invest “sweat equity” in order to reduce their housing payment; requires future home owners to complete 65% of the work to build their home; generally serves 0-80% AMI.

 

State Administered Programs

Florida Housing Finance Corporation

1. Single Family Mortgage Revenue Bonds: also known as the First Time Homebuyer Program; uses proceeds from mortgage revenue bonds to finance 30-year mortgage loans for first time homebuyers; eligible applicants include individuals who do no own their current home, do not claim their mobile home as real property, have not owned a home within the past 3 years, have established worthy credit, and has an annual income that does not exceed program limits

 

2. Homeownership Loan Program: target developers and provides loans to assist with the construction or rehabilitation of homes; funds are also used in down payment and closing costs assistance; applicant can request up to 33% of the total development cost in constructing affordable single family housing

 

 

Terms and Abbreviations

AMI: Area Median Income; this figure represents the average income for a specified area

HUD: U.S. Department of Housing and Urban Development

Very low incomes: 0-50% AMI

DRI: Development of Regional Impact

Any housing problem: cost burden greater than 30% of household income/ overcrowding/ without complete kitchen or plumbing facilities

Cost Burden: fraction of a household’s total gross income spend on housing costs; for renters, housing costs include rent paid by tenant

Other housing problems: overcrowding (1.01 or more person per room)/ without complete kitchen or plumbing facilities

Elderly households: 1 or 2 person household, either person 62 years old or older

PUD: Planned Unit Development

 

Other Cities’ Solutions for Affordable Housing

 

Key West, Florida: In the late 1990s, Key West amended their development code to add inclusionary zoning requirements on all new construction.  Inclusionary housing is a policy that requires a certain percentage of all units within a residential development to be sold or rented at a price that is affordable.  The additions to the development code also included incentives for the development of accessory infill units for the workforce and the elderly.  Under the inclusionary zoning laws, developers can opt out of construction by paying a fee off $40,000 per unit to the local affordable housing trust fund.  Any affordable units that are constructed remain in the affordable housing sector for a minimum of 25 years.  Unfortunately, by 1992, Key West reached the maximum allowable housing unit allocation under its land use plan and only 141 affordable housing units were constructed.

 

Tallahassee, Florida: In 2005, the Tallahassee City Commission passed Ordinance 9-240 with the idea of stimulating private sector development of affordable housing.  Effective October 1, 2005, the ordinance required that in every development of 50 or more units within specified areas in the city (which includes urban service areas, Target Planning Areas, Critical Planning Areas, and targeted census tracts) and all DRIs, the developer must set aside a minimum of 10% of the units for owner-occupied affordable units or 15% of the units as affordable rental units.  The affordable units were to be built on site, within the same census tract, or in an adjacent census tract as long as it was still in the urban service area.  The developer could opt out of construction with the appropriate fees based on the median sales price of housing in the said development or by donating, to the city, one parcel of land for every unit of required affordable housing required within the development.

 

Montgomery County, Maryland: 1974.  Montgomery County passed the Moderately Priced Dwelling Unit Law, which requires between 12.5 and 15% of the houses in new subdivisions of 50 or more units e moderately-priced dwellings to help end exclusionary zoning and discrimination against young families, retired elderly persons, single adults, female heads of households, and minority households.

 

Portland, Oregon: 1984.  Northeast Community Development Corporation (NECDC) developed, marketed, and successfully sold 16 semi-attached townhouses in the Walnut Park neighborhood in Northeast Portland.  Eligible applicants utilized grants from HUD, the Oregon Housing Mortgage Revenue Bond program, and the Federal Home Loan Bank Affordable Housing Program.  Walnut Park had deteriorated into a gang-infested area that rapidly deteriorated in the 1980s.  Once the local community was on board with the redevelopment idea, the NECDC expanded its partnership to include the Portland City Police Department, the Portland Trail Blazers, and community and business leaders.  Ultimately, the NECDC constructed a community police precinct, retail shops, a Boys and Girls Club, and replaced abandoned homes with new townhouses.

 

California, in general:

-  “Fair Housing” law requires each local community to plan and implement programs to deal with the affordable housing needs throughout the state

-  The anti-NIMBY laws prohibit the ability of local governments to deny or reject affordable housing projects in communities

-  Density Bonus Law allows developers to increase the allowable density on a project if they include a certain percentage of affordable housing units

- Redevelopment law requires any low or moderate income housing destroyed as part of a re-development effort to be replaced; also, 20% of taxes in a re-development effort be used to pay for and construct affordable housing units; and at least 15% of all new units in a re-development area be comprised of moderate, low, and very low income housing for at least 55 years

 

San Diego, California: 1994.  The San Diego Housing Commission (SDHC) identified the Greentree Plaza in the Lincoln Heights neighborhood as a good site for redevelopment.  Lincoln Heights is one of San Diego’s low income neighborhoods.  The Greentree Plaza was originally going to be developed as an apartment complex, but construction stopped in 1985 with only 60% completed and it became a blight on the historical community in the ensuing years.  When the SDHC purchased the site in February, 1994 (for $700,000), it was determined that the leftover construction from Greentree was unsuitable for housing needs and it was demolished in March, 1994.  Working closely with the local community and HOME funds, the SDHC received $1.4 million in financial aid from the government and in December, 1995, ground was broken on the Knox Glen apartment complex with full community support.  In exactly one year, the complex was finished and, within a week, it was fully leased.  The Knox Glen apartments were comprised of 54 two-, three-, and four-bedroom rental units that provided a range of affordable opportunities for individuals and families in the Lincoln Heights neighborhood.

 

San Jose, California: Working with government and city subsidies as well as the non-profit affordable house builder BRIDGE Housing Corporation, San Jose approved the construction of Almaden Lake Apartments.  The final development consisted of a 144-unit apartment complex and a buffer zone of 84 single-family homes, 28 of which were subsidized by the city of San Jose.  The apartment leases were completely filled as soon as the application process was opened and the single-family homes were quickly sold out as well.

 

Waterford, California: 1986.  Self Help Enterprises (SHE) purchased land for the development of 80 single-family homes for low incomes families (between 50-80% AMI) who were primarily farm workers.  SHE required “sweat equity” from the future homeowners in order to provide solid quality building materials as lower cost to the participants.  SHE received financing from the Farmers Home Administration (FmHA) and the California Housing Financing Agency (CHFA).  By using funding from the FmHA, some of the dwellings were restricted to a one-car garage, a stipulation of the FmHA.  The neighborhood of Waterford tried to stop the construction by imposing an ordinance that stated all new home construction had to have a two-car garage attached to the dwelling.  However, SHE was successful in getting that ordinance overturned as well as passing a state law prohibiting any future local jurisdiction from passing laws to deny families an FmHA loan by imposing restrictions such as the one requiring two-car garages.