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‘One of the least affordable places to live.’ Broward grapples with housing crisis

More from the series

Priced out of paradise: Workforce solutions

Over the past decade, South Florida’s housing costs have far outstripped wages. Those who work here — teachers, firefighters, wait staff, architects, nurses, custodial workers, police officers, clerks — are struggling to get by. Part II of this series explores how local government entities are partnering with for-profit developers and nonprofit agencies. Our interactive tool helps renters and buyers match their budgets to affordable neighborhoods. Future stories will explore more solutions to South Florida’s housing crisis.

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South Florida’s affordability problem has been building for years. Today, the region ranks as the least affordable metro in the country, thanks to skyrocketing rents and bargain-basement wages.

The problem isn’t limited to Miami-Dade.

“[Lack of affordable housing] is at an extreme level,” Broward Commissioner Michael Udine says in an interview. “It’s a major issue in this community. Everyone in general has taken note of it.”

Florida International University shows Broward is now short 74,173 units for low income renter households, and 46,170 units for potential low- and moderate-income buyers.

Where can you afford to rent or buy in South Florida? This tool will show you

It’s a need the county is now working to address.

In November, 73 percent of Broward voters approved the creation of a dedicated affordable housing trust fund. Unlike the state’s Sadowski affordable housing fund, which has been raided each of the past 11 years, Broward’s monies cannot be diverted. Appropriations are still being debated by the county commission; the goal is to have as much as $30 million available by 2033.

The trust is seen as the evolution of a county commission plan, kicked off in 2017, to invest $15 million on affordable housing over the course of three years. So far, $11 million has been spent.

Meanwhile, individual Broward municipalities have launched their own solutions.

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“We’ve become the most aggressive county in the state when it comes to addressing affordable housing in the last several years,” said Sandra Veszi Einhorn, executive director of the Coordinating Council of Broward County, an umbrella group for local governments, nonprofits and businesses. “We’re able to provide continuous updates. That’s not something you see in neighboring counties.”

Economic development

How did Broward get here?

Since 2007, the county has commissioned Florida International University’s Metropolitan Center to issue regular reports on the county’s housing needs. What began as an attempt to stem the county’s foreclosure crisis has since evolved into tackling affordability. The conclusion from the most recent report, issued at the end of last year, was stark.

“The housing affordability demands in Broward County and its municipalities have not improved despite impressive post-recession job growth numbers and low unemployment,” it says. “With 53.9 percent cost-burdened households, Broward County is one of the most unaffordable places to live in the US.”

The reports’ lead author, center associate director Ned Murray, says the studies get read.

“[Broward leaders] are well aware of the state of their economy, and are concerned that if they don’t provide for their workers, it’s going to negatively impact them,” Murray said in an interview.

One key takeaway from recent reports: Broward’s workforce will remain mostly low-paid for the foreseeable future. Like Miami-Dade, Broward’s most common occupations—retail sales people, customer service reps, and cashiers—pay less than the county median wage of about $17 an hour. Unlike Miami-Dade, Broward has even fewer widespread occupations, like registered nurses and secretaries, that pay above the median, according to Bureau of Labor Statistics data.

“Much of our workforce is going to continue to be at around 60 percent of area median income,” said Ralph Stone, executive director of the Broward County Housing Finance Authority, in an interview. “That’s where our workforce housing needs are, and that’s not going to change.”

It’s a message that is now echoing throughout Broward. In March 2018, the Coordinating Council issued its own report, “Housing Broward: An Inclusive Plan,” that laid out Broward’s affordability challenges and made the creation of the trust a cornerstone for moving forward.

To win converts, Einhorn re-framed the conversation.

“I said, ‘We’re done talking about social justice. Lack of affordable housing restricts our ability to retain top talent,’’ Einhorn said in an interview. “That allowed us to gain some steam. Before, you couldn’t say ‘affordable housing’ without people laughing you out of the room.”

The need

As the Miami area has grown to become one of the least affordable in the country, Broward has held up its end of that lousy bargain. According to Census data, the median Broward household spent 35.3 percent of its income on rent in 2017, just a few points below Miami-Dade’s nation-leading level of 38.4 percent. The median rent in Broward has climbed more than 16 percent since 2011, to $1,328, according to Census data. Over the same period median hourly wages have increased just 10 percent to $16.89, according to Bureau of Labor Statistics data. That’s without adjusting for inflation.

The result: The past two years have seen more U.S. residents depart than arrive in Broward, according to Census data. Like Miami-Dade, Broward’s population growth has been buoyed by immigration and natural births.

Among those that remain, 147,313 households are now cost-burdened, according to FIU, meaning they pay at least 30 percent of their income toward rent.

Without intervention, FIU says, market forces will continue to make the situation worse.

“The dynamics driving housing affordability in Broward County have been moving in the wrong direction,” its most recent report states. “[These include] housing prices and rents increasing faster than wages, slow higher-wage job creation, tightening vacancy rates, and increasing speculative investment that permanently removes more units each year units from the local market,”

The county is now doing its best to stem the tide. For years, the Broward County Commission typically spent less than $1 million on affordable housing. That changed in 2017, when county commissioners approved at least $5 million per year in general revenue funds for affordable housing for the next three years.

Among those pushing for the allocation was Commissioner Nan Rich, who pointed to the now-widespread belief that the county must act as a focal point for pushing the funding through.

“There are certainly signs of progress being made,” Rich said in an email. “The business community in Broward County has been quick to embrace this challenge and tackle it head on. They now see this crisis as an economic development issue, and not solely a social justice issue.”

Tax credits

Since the 2017 pledge, the county’s $11 million has yielded 612 affordable housing units. These developments have been supported by $122 million in spending from the private sector.

Why would a private developer invest in affordable housing? Tax breaks. Both the state and county offer tax credits that developers can sell to banks to make affordable housing projects profitable.

Today’s affordable housing is a far cry from the drab projects of the past. An example: Northwest Gardens, a five-phase, award-winning, LEED-certified senior housing development just north of Ft. Lauderdale financed with tax breaks issued by the city, state, and county to a syndicate of financial groups.

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An aerial view of the Northwest Gardens, a subsidized housing complex, in Fort Lauderdale on Tuesday, June 11, 2019. MATIAS J. OCNER

For Matt Rieger, CEO of the Housing Trust Group, a for-profit developer of affordable housing, there’s plenty of financial sense to be in the business of providing below-market-rate housing. Based in Coconut Grove, HTG works throughout South Florida; among its most recent projects is the Arbor View a $25 million, 100-unit affordable senior living development in Margate.

“We think the demand for affordable housing is tremendous and only growing,” Rieger said in an interview, “so we’ll always be busy. Whereas other real estate developers, they’re building like it’s 2008—at some point, demand for the high-end market rate condos will disappear.”

The Broward county financing authority has been active since 1979. But Stone, who has been with the organization for 11 years, said the agency’s work has never been more essential. Because land, material and construction costs are so expensive, a developer can’t afford to build affordable housing without government incentives.

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Since 1982, slightly more than 14,000 units have been created in Broward—a fraction of the households that are now cost-burdened, according to FIU.

So even as county funding has gone up, Stone said, the demand remains extreme.

The trust

The new trust is designed to alleviate the shortage. The Broward Commission is still debating how to fund it.

One proposal calls for reinvesting funds set to expire from community redevelopment agencies, known as CRAs.

Rich has also proposed changing setting aside two-tenths of the county’s millage collections to eventually raise $30 million a year, noting in an email that “the housing affordability demands in Broward County and its municipalities have not improved despite impressive post-recession job growth numbers and low unemployment.”

The proposal has received widespread support from business groups including the Broward Workshop and Greater Fort Lauderdale. Chamber of Commerce

“We have written a letter in support of allocating two-tenths of a mill,” said Workshop chair Keith Koenig, CEO of City Furniture. “The voters last year supported the creation of an affordable housing trust fund, and it passed overwhelmingly. So we support that to be able to provide a solution to our affordable housing.”

Stone sees the trust as Broward’s answer to Miami-Dade’s documentary stamp surtax on all commercial real estate transactions, which gives Miami-Dade an annual reserve of tens of millions of dollars to put into affordable housing every year.

Miami-Dade has more than $117 million in reserves from that surtax. Combined with additional funding programs, Dade has a total of $154.1 million it has earmarked for affordable housing, according to a May 6 memo, resulting in a pipeline of nearly 6,000 affordable housing units.

That option is closed to Broward due to opposition from Tallahassee, Stone said.

And that’s not the only state impediment to housing remedies, according to Udine the Broward commissioner. He points to the diversion of money from the Sadowski fund.

“That’s a pile of money we can use to come up with some answers,” Udine said in an interview. “We’re shipping tons of money to the Sadowski trust fund, and we’re not getting any of that back.”

Broward has missed out on about $130 million over the past decade that it should have been able to draw from the state’s Sadowski Fund, Stone said.

In the meantime, Einhorn continues to reshape the conversation.

“As cities are passing affordable housing-friendly policies, and it gets to people at the neighborhood level, we’re trying to say ‘it’s okay to have affordable housing in your community,” she said.

“It doesn’t mean that suddenly the value of your property will value go down and that crime will go up—in fact it does the opposite. It strengthens a community when you have people who can afford to live there, and who can become healthy consumers.”

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