By Laura Tichy
Service workers can’t afford to live in more Florida metros as home and rental prices climb – and local service businesses are starting to feel the pinch.
FORT MYERS, Fla. – Imagine calling 9-1-1 but help doesn’t come promptly because few first responders are able to afford to live and work in the area. That scenario is closer than you think. Or imagine going to your favorite restaurant, only to find it closed because the management can’t hire enough workers living locally to staff it for evening. That scenario is already happening.
“My favorite restaurant, I wanted to go there on my birthday, and it was closed,” said Suzanne Cabrera, president and CEO of the nonprofit Housing Leadership Council of Palm Beach County Inc. “I know the manager, so I asked, and they couldn’t get enough staff to open. He said, ‘This is a really hard place to find staff because, even if we pay $12-$15 an hour and they make good tips, they can’t afford to live here.’ I get it – it’s insane driving 45 minutes each way from Port St. Lucie when they can just work at a restaurant there. So, people are going to see their quality of life affected because we’re just not going to have those folks who make life better in Palm Beach County.”
The already-high housing costs in parts of Florida have skyrocketed in recent years, making it difficult to live here for a surprising swath of occupations. And the trouble employers are having with securing talented workers impacts the quality of life even for the people who can afford the housing costs.
“We’ve heard from our major employers that they’ll find the perfect candidate for the job, and they’ll make the offer, but as soon as the candidate starts coming to look at housing, they’ll say, ‘We can’t afford to live here,’ and decline,” said Jenna Buzzacco-Foerster, director of government relations for the Greater Naples Chamber.
According to a report produced by the nonprofit Florida Housing Coalition, “In some communities, where housing is extremely expensive, such as the Florida Keys, Naples and any number of other waterfront communities, there is a very real threat of losing basic services, such as teachers and police protection, due to a lack of affordable housing.”
Local nonprofits that help lower-income people attain housing have seen this affordability problem for public workers play out firsthand. The Affordable Homeownership Foundation Inc., which serves Southwest Florida, helps people with lower incomes both with building and renting housing. The organization counts a Lee County Sheriff’s Office employee among its renters.
“She only makes $29,000 a year and couldn’t afford to rent anywhere,” said Lois Healy, the nonprofit’s CEO. “We’re renting a house that we rehabbed to her and her two kids, $650 a month with all utilities. Where could you find that anywhere else? She’d be homeless or having to work three jobs just to pay rent. And yet affordable housing complexes get voted down by local residents because they don’t want it in their backyards. That’s going to be a major problem if they can’t find people to do the jobs. You can be rich all you want, but if you can’t find somebody to wait on you at a restaurant or take you by ambulance to the hospital or be your nurse, then you’re going to be having a lot less ability to survive.”
It’s also impacting public-sector employees in Palm Beach County.
“I’ve talked to 50-year-old teachers who get a divorce or their life situation changes, and they’re having to get a roommate like right back in college,” Cabrera said. “They say, ‘I love teaching, but I never in a million years imagined I’d be approaching retirement and have to live with a roommate.’ Teachers don’t go into it to be wealthy, but they want to be able to live and not be low income, which teachers are low income in Palm Beach County.”
Defining affordable housing, and who qualifies for it
The United States Department of Housing and Urban Development (HUD) provides standard definitions for housing affordability, fair-market rent and household income levels that qualify for assistance. Governments and nonprofit agencies all use these standard definitions, which HUD calculates for each county or municipal area using the same formulas. The income definitions work using medians, which, to give a quick statistics refresher, are different than averages.
An average is calculated by adding together all the values, then dividing that sum by the number of values. A median, instead, arranges all incomes in order, then picks the one at the middle where half fall above and half fall below. Each method has its pros and cons. Then, low income is calculated to start when workers earn roughly 80% or less of area median income (AMI), with additional calculations to adjust for family size.
“When you think about how HUD does those formulas, our community is out of balance because we have a small workforce and a lot of retirees, but HUD can’t consider that for individual counties, so it’s never going to be quite right,” said Carrie Walsh, director of the Human Services Department of Charlotte County government.
Records show that for Charlotte, Lee, Collier and Palm Beach counties, median incomes range from $66,700 in Charlotte to $80,200 in Palm Beach. Low income for one person then ranges from $36,300 in Charlotte to $47,950 in Palm Beach. For a family of four, low income ranges from $51,850 in Charlotte to $68,500 in Palm Beach.
For housing costs to be affordable (or for a household to be “not cost burdened”), HUD and most housing advocates apply a rule of three. For renters, housing costs (including utilities) should run no more than 30% of annual gross household income. When buying, the house should cost no more than three times annual income. The 30% measure for affordability received recent corroboration from an article by Chris Glynn in The Annals of Applied Statistics that showed the “expected homeless rate in a community increases sharply once median rental costs exceed 32% of median income.” All four of those counties currently have median rental costs at 32% or higher of median incomes.
HUD also calculates the fair-market value of rents. This is the maximum amount of rent that may be paid when HUD helps lower-income renters, where the renter contributes 30% of their income and a voucher covers the rest of the rent, but only up to fair-market value. (If the rents are higher, vouchers cannot be used, so many vouchers go unused every year even if families qualify for assistance.) For one-bedroom rentals, fair-market value should run $866 in Charlotte to $1,180 in Palm Beach. Two bedrooms should run $1,067 in Charlotte to $1,468 in Palm Beach.
Good luck finding any properties currently renting for those prices on the open market.
“We have an affordable housing advisory committee, and I asked a real estate agent who sits on that to run a report in the MLS system to give me a sense of how many rentals are available right now in the community – condo, house, whatever’s available – plus the average rent,” Walsh said. “As of (Jan. 4), there are eight rentals available in Charlotte County. The average two-bedroom is $2,125 a month, and the average three-bedroom is $2,613. Only eight, in itself that’s incredibly alarming, but what we look at is, to not be cost burdened, what does the household income need to be for that to be an affordable rent? The two-bedroom needs to be bringing in $85,000 a year, or $40.86 per hour for housing costs, and the three bedroom needs $104,520, but the kicker is, that doesn’t include utilities. I think we will see the pain point sooner than other parts of the country because our workforce will be forced to leave because they simply cannot afford to live here.”
The household also doesn’t own anything in which to build equity after paying that much money each month for housing since it’s rent and not going toward a mortgage payment.
Why not just drive?
If you couldn’t afford housing in Southwest Florida, the adage was to simply drive a little east or north, and you’d find something you could afford. This didn’t factor the cost of owning and maintaining a vehicle since using public transit then isn’t possible.
The Center for Neighborhood Technology H+T® Index adds 15% as the measure for affordable transportation, meaning that housing costs, utilities and transportation would have to cost no more that 45% of household income to be considered affordable. But as housing costs have risen across all Southwest Florida, simply counting on a neighboring community to provide its affordable housing to another county’s workforce is increasingly not an option.
“Years ago, people could just live in south Lee County, in Bonita or Estero, but we’ve seen numbers in south Lee that are comparable in many ways to Collier County,” Buzzacco-Foerster said. “Now, maybe, people who work in Collier could still afford a rental in the Cape or Lehigh, but then where are people from the Cape or Lehigh going to go? The problem is up and down the coast. For a long time, we’ve approached this county by county, with each county trying to address it in its own way. I think now we’re seeing, as we talk to our colleagues at chambers in Lee County, that we need to take a regional approach to this. So, how can we address this regionally?”
What’s causing housing prices to increase?
Housing costs have surged. When people can work from home, this means they can work from anywhere, so why not move to paradise?
Naples has the second-highest rent in Florida, thanks in part to 45% of its apartments being luxury units compared to the national average, where typically only 27% of rentals in a market are upscale. Median price for a home in Collier County was $650,000 in October, up $90,000 from a year earlier.
Ryan Bleggi, president of the board of directors of the Naples Area Board of Realtors (NABOR), noted a 76% decrease in homes on the market as compared to a year earlier, with only 1,198 homes available by the end of November, with the prices reflecting high demand amid limited supply. Cabrera said Palm Beach County rents are around $2,500 with home prices in the $475,000 range. Rents in Lee County have increased by 45% since 2019, according to data from Habitat for Humanity of Lee and Hendry Counties.
“Many of our applicants were actually renting homes, and they’ve been displaced because the owners have decided to sell the property to capitalize on the current market, so they have just been displaced due to the sale of their property,” said Becky Lucas, CEO of Habitat for Humanity. “We’re also seeing rent increases because there is a lack of units. Landlords know they can raise the rent because there’s nowhere else for the families to go unless they want to live an hour away from work. We’re also seeing a big increase in the working homeless, where there are dual income earners in a family, yet they’re living out of a motel. That’s only due to the fact that there aren’t enough units in our area for them to go into.”
Despite many people struggling to find affordable housing in the region, few renters were willing to talk about it on the record. Reasons ranged from being amid lease renegotiation to not wishing to appear an unstable job candidate to current or potential employers, but some cited fear of retaliation by a landlord.
One renter who was willing to speak on the record was freelance writer and social photographer/media specialist Stephanie Davis, whom Florida Weekly readers may remember from her Downtown Diva columns. She and her spouse have lived in the same affordably priced condo for over a decade but now find themselves searching for a new place because their landlady decided to sell it amid the market upswing.
“Leasing is incredibly expensive,” Davis said. “An apartment near downtown Fort Myers is going for $200 less than a beautiful one bedroom, one bath in Chelsea in Manhattan.”
She said they have put offers in on homes, but their offers keep being beat by out-of-town cash buyers who are buying single-family homes, sight unseen.
“I’m finding that a lot of the places we put an offer on and lost three months ago are now on Airbnb,” Davis said. “They’re turning them into vacation rentals. I have confidence we’ll find something, but I worry about the single folks with kids. I don’t know how they do it.”
Ability to afford higher rent no guarantee of suitable housing
While workers earning less than median income continue to struggle, affluence is not necessarily a buffer against the region’s housing difficulties. Cabrera said that the tight housing market has resulted in potential employers skipping the county when contemplating relocation plans, and for a surprising reason.
“Typically, in the past, we’ve had plenty of mansions in Palm Beach for the head CEOs of companies, but it’s gotten so crazy I’ve heard even that’s an issue now,” Cabrera said. “Oh, man, we’ve got a problem if we can’t even house millionaires.”
Affordable solutions
Solving housing issues is not a swift process as new housing cannot be built quickly, and local zoning factors in. Healy’s nonprofit (Affordable Homeownership Foundation) is building units that house four extremely low-income people, such as people who are disabled or are veterans, in homes that feature a bed/bath/kitchenette for each individual plus a shared common living room, full kitchen and laundry area. Collier County recently approved a number of workforce rate housing units for essential workers at the new Blue Coral development. The Community Foundation of Collier County is spearheading another development that will provide affordable housing, which will break ground next summer.
An affordable housing study done in Palm Beach County in the 1990s projected, then, that the county needed to add 6,000 units yearly of housing for low- and moderate-income people. Cabrera said that the county only saw about two-thirds of those units built. NIMBYism (not in my back yard) plays into some resistance to affordable housing. She said the best solution is to listen to those neighbors’ concerns to learn what they’re really worried about. At that point, addressing the concerns and providing education typically can overcome the resistance.
She recalled when a developer wanted to build 20 affordable apartments, and neighbors turned out to the meeting to protest it. When she asked for their actual concerns, they were worried about increased traffic. So, she explained that the developer’s alternate plan for the property was to build a convenience store, and she showed the neighbors a traffic study comparing potential land uses. They then realized that the apartments would generate less traffic than a convenience store open 24 hours a day.
“You have to ask what the real issue is, what they’re concerned about, rather than treating them like they’re hysterical when they come to the meetings,” Cabrera said.
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