Constituent Hypocricy Surrounding Attainable Housing

As SW Florida remains one of the fastest growing areas in the country, the natural effect is rising home prices and rental rates.  While Lee County remains FAR below the highest median home price from 2007, rental rates have exceeded pre-recession peak.  Recently, the public has wrongfully cried out against every media article or news story that touts headlines such as "Apartment Complex sells for $50 million and has record rental rates", "Building Permits Increase 13%", "Average Apartment Rent up 25% since 2011".  

The most common public grievances are based around the absence of affordability, particularly to the workforce sector, those earning between 80-120% of the Area Median Income.  The most common complaint on social media is "GREAT!  I'm moving out of state!  Nothing affordable!!  This town sucks!" 

My concern for over 2 years has been "Where will teachers, cops, firefighters, EMT, nurses, county workers, etc. live if the average rent is $1,400?"  According to an internal study by a local public entity that I am not able to disclose, nearly 60% of their employees are considered "Rent Burdened," defined by HUD as those who pay in excess of 30% of their wages toward housing costs.  To compound that issue, employee turnover is so bad, it's the taxpayers who are silently suffering, paying for the loss of over $100 million a year.  These costs are attributed to the cost for public entities to recruit, hire, and train replacements for those who quit (School District, Lee Memorial, Lee Gov, etc).  And no, that is not a fake number and if I were to guess, it's much more than that.

Teaser statistic:  Did you know that the Lee County School District employs about 4,500 teachers?  This doesn't include admin staff who suffers just as much, if not more.  For the last 5 years straight, the School District has experienced on average, turnover of 800 teachers per year.  That's almost 20%.  That's awful compared to other districts around the country.

If Lee County voters are so bent out of shape about real solutions to attainable housing, then why was there so much public backlash when the School District approved by a vote of 5-0,  a proposal to pursue a local partnership with a private entity to develop a Class A apartment complex that would offer significantly discounted rental rates to teachers, cops, firemen, and all of the other workforce employees of our area?  Here is the News-Press Article, and another one here, who's comments have since been deleted.  The News-Press Facebook page had thousands of crybabies.

The misconception that 99% of the Negative Nancy's didn't think through was that NONE of the development costs besides a $500,000 soft cost item would be paid by the School District and/or taxpayers.  The financial exposure burden would largely preside over the private developer.  The other misconception was that any new development would be considered "low income housing" or low quality construction.  Quite the contrary.  We aren't asking for HUD money.  The design isn't any different than any other new apartment complex you've see go up in the last 2 years.  It's simply a proposed solution as to how to offer lower rents to those that need it most, nearly at the EXPENSE to a developer.

Attainable Housing is a real and growing crisis in Lee County and if nothing is solved soon, our economy will suffer by real estate value setbacks due to our new identity that we are not a family friendly destination.  It doesn't take a Rocket Scientist to remind everyone what happens when the real estate market goes.  Gone are the small businesses.  Gone are the new aged teachers that we so desperately need.  Gone are good quality workers who teach our kids, protect our streets, and assist in community development.  As it is now, finding high quality employees in Lee County is highly recognized by all businesses as poor.  And it will only get poorer if we can't appeal to a very big part of our growing population.

Impact Fees in Lee County are expected to rise.  That cost increase is passed through to homeowners and renters.  Believe me, it's not a cost that is absorbed by developers.  So when the County Commissioners discuss a Fee increase, like they did yesterday, developers are crying foul and the constituents see it as a win.  Best example I can provide is the following:

Currently, for new apartment development, each unit is subject to an Impact Fee of roughly $3,500.  The new proposal is to raise Impact Fees to the full amount of roughly $7,000 per unit.  On a 325-unit apartment complex, the current Impact Fee cost to the developer is roughly $1.2 million.  If raised to the full amount, which is likely to happen soon, that Fee increases to over $2.4 million, again, a cost passed through to tenants in the form of higher rental rates.  The biggest problem is developers are GETTING the higher rates.  People have no choice at the moment than to go broke on housing.  That's a fundamental problem that will bankrupt an area.

I understand the value of Impact Fees.  They are necessary, but they are also leveragable, and it takes smart leaders to understand it.  Forget "Market Rate Apartment" deals right now.  Think about "Attainable Housing".  If the County agrees to an Impact Fee deal for select properties that help the community, it comes back 10-fold in the future.  If I were to build a 325-unit apartment complex, the annual and ad velorum taxes to that asset will be roughly $600,000, a tax that pays into the same kitty as preconstruction Impact Fees do.  Over a 10-year period, that property will generate over $6 million in County paid taxes on just that single complex!

I'm simply making an example using Impact Fees.  There are other incentives than can be offered such as Tax Incremental Financing (TIF), that if used properly, can reduce costs to the developer and can be passed through to the tenants as a savings.

I'm hoping you now understand the title of this post?  The hypocricy is that you can't have your cake and eat it to.  If you want to complain about someone's genuine efforts to propose a solution to attainable housing, then you need to understand the plan.  No knowledge equals no worthy opinion.  Educate yourself as to who and what are economic proponents for the benefit of all Lee County Taxpayers.  Your voice is powerful.  Don't let misconceptions guide your voice that our leaders can hear.

Our proposal we made to the school district, which was again voted YES by a vote of 5-0, was a fiscally conservative comprehensive plan.  Before commenting, look up what fiscally conservative means.  In my opinion, part of the reason this plan to proceed was halted was because the Superintendent and perhaps some board members, were concerned over how much negative backlash there was once the news leaked to the press.  Upcoming election concerns perhaps?  If so, that's too bad since if the public truly understood the nature of the proposed solution, almost every voter wouldn't have made such knee-jerk comments.

Development is our business and we enjoy the margins we earn if we can get them.  That's how we survive.  But we also have a very clear understanding that if the Community can't come up with a solution to Attainable Housing, I'm going to be out of a job much quicker than you will be.  Us developers are just as incentivized as you are to create the help we desperately need so our economy can prosper for years to come.

Local government can help.  Not with funds, but with decisions that benefit the entire community in the long run.  Let's bring back and keep our good workers and community heroes.  Let's create a fix to this so they can enjoy life as much as they deserve to.

As an appointee of the Construction Advisory Committee to the Lee County School District, I can say with confidence that public entities are trying to clean up the history of wasting taxpayer dollars.  They are seeking answers from people like me which is why we sit on the committee.  I can speak for the School District.  They want less debt and fat and we are working toward getting them there.

We need your help.  Let's talk about it.  I am happy to sit with anyone who is willing to listen until I know your decision or opinion is based off of our true motives and proposed ideas.

Scott Allan

President - Allan Development Group

 

Leave a Comment

Your email address will not be published. Required fields are marked *

*