Demographics and Attainable Housing

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The Big Housing Arthur C. Nelson Professor of Planning & Real Estate Development University of Arizona February 11, 2022

GAP

Topics T h e B i g D e m o g ra p hi c Tr en d s T h e B i g H o u s i n g C o s t B u r d e n Tr en d s T h e B i g U n d e rp ro d uc t i o n Tr en d s T h e B i g C o m m u n i t y P r eferen c e Tr en d s The Big Housing Gap . . . O t h e rs w i l l t e l l u s h o w t o c l o s e t h e g a p

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The Big Demographic Trends Population by Age, Permanent Residents, 2020, 2035, 2040 Age

2020

2040

Change 2020-40

Change %

Share

<20

4,863,978

5,413,052

549,074

11%

19%

20-34

3,994,202

4,248,992

254,790

6%

9%

35-44

2,565,045

3,085,840

520,795

20%

18%

45-64

5,568,982

5,536,222

(32,760)

-1%

-1%

65-74

2,422,526

3,097,660

675,134

28%

24%

75+

1,998,235

2,854,381

856,146

43%

30%

Total

21,414,988

24,238,187

2,823,199

13%

Source: Shimberg Center for Housing Studies, UFL.

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Cost Burden

%  62% aren’t %  72% aren’t

5 https://nlihc.org/sites/default/files/SHP_FL.pdf

The Big Housing Cost Burden Trends  Change in 50+% Cost Burdened Low-Moderate Income HHs HH Income AMI% <= 30% AMI <= 30% AMI <= 30% AMI

Housing Cost Burden <= 30% > 30% <= 50% > 50%

> 30% <=50% > 30% <=50% > 30% <=50%

<= 30% > 30% <= 50% > 50%

>50% <= 80% >50% <= 80% >50% <= 80%

<= 30% > 30% <= 50% > 50%

>80% <= 100% >80% <= 100% >80% <= 100% > 100% > 100% > 100% Total

<= 30% > 30% <= 50% > 50% <= 30% > 30% <= 50% > 50%

Housing Cost Burdened Households

2020 108,342 91,411 589,999 75% 239,003 267,630 411,497 45% 609,971 526,929 212,402 16% 540,014 217,176 45,103 3,607,673 311,732 49,312 7,828,194 1,213,898

Source: Shimberg Center for Housing Studies, UFL. Data available for each county. http://flhousingdata.shimberg.ufl.edu/population-and-household-projections/results?nid=1

2040 132,049 112,077 717,448 75% 297,202 326,656 502,707 45% 757,802 646,496 264,421 16% 672,044 270,304 56,827 4,536,588 390,883 61,103 9,744,607 1,484,576

Change 23,707 20,666 127,449 74% 58,199 59,026 91,210 44% 147,831 119,567 52,019 16% 132,030 53,128 11,724 928,915 79,151 11,791 1,916,413 270,678

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The Big Housing Underproduction Trends

u n d e r p rod u c t i o n [ u h n-de r-pruh-duhk -s huhn] noun . . . p r o d u c t i o n t h a t i s l e s s t h a n n o r m a l o r t h a n i s r e q u i re d b y t h e d e m a n d .

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Florida Housing Underproduction 2019 [(Households + Missing HHs) + (Vacancy Factor @~5%)] = Need Less [Total Units – 2nd & vacation homes – Uninhabitable Units] = Housing Underproduction About 250,000 to 300,000 units in Florida Over the Period 2012-2019 Official figures to be released in summer 2022

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The Big Community Preference Trends 

If you were deciding today where to live, please indicate how important each of the following would be to you (sidewalks & walking):

February 2020

July 2020

NAR 2020 Community and Transportation Preference Survey

https://www.nar.realtor/reports/nar-community-and-transportation-preference-surveys

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The Big Community Preference Trends 

Small Yards with Walkability or Large Yards without Walkability

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The Big Community Preference Trends 

Attached with Walkability or Detached without Walkability

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The Big Community Preference Trends  Mismatched Housing Preferences

80 million x 22% = 17.6 million 40 million x 10% = 4.0 million

80 million x 22% = 16.0 million 40 million x 10% = 4.0 million

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The Big Housing Gap Based on Community Preferences ½

Wa n t d e t a c h e d h o m e s o n l a r g e l o t s t h a t a r e n o t w a l k a b l e

¼

Wa n t d e t a c h e d h o m e s o n s m a l l l o t s in walkable communities

¼

Wa n t a t t a c h ed h o m e s i n w a l k a b l e c o m m u ni t i es

F l o r i d a 2 0 3 8 e s t i m a t ed a d j u s t m en t s 3 . 0 m i l l i o n n e w a t t a c h ed & s m a l l lot homes to 2038 1.0 million excess large lot homes than needed in 2038

National community preference housing gap 2038

Source, Arthur C. Nelson, "The Great Senior Short-Sale or Why Policy Inertia Will Short Change Millions of America's Seniors," Journal of Comparative Urban Law and Policy 4(4): 473-528 (2020).

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Other Panelists will Solve the Gap

THANK YOU!

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The Market Real Estate Today, and Tomorrow’s Challenges

Florida Yearly Market Detail Summary Summary Stats SF

2021

2020

Closed Sales

350,516 (12.9%)

310,378 (5.8%)

Paid in Cash

104,651 (53.2%)

Median Price

Summary Stats MF

2021

2020

Closed Sales

160,177 (34.2%)

119,336 (2.5%)

68,322 (-4.3%)

Paid in Cash

80,822 (50.2%)

53,806 (-6.1%)

$348,000 (20.0%)

$290,000 (9.6%)

Median Price

$252,000 (17.2%)

$215,000 (12.0%)

Average Price

$505,129 (25.8)

$401,478 (15.8%)

Average Price

$382,963 (26.4%)

$303,051 (10.9%)

Active Listings

30,344 (-33.7%)

45,749 (-44.1%)

Active Listings

17,869 (57.4%)

41,927 (18.3%)

Months Supply

1.0 (-44.4%)

1.8 (-45.5%)

Months Supply

1.3 (-69.0%)

4.2 (-20.8%)

Produced by Pinellas Realtor® Organization/Central Pasco Realtor® Organization with data provided by Florida Realtors® and Florida’s multiple listing services.

What’s Next: • Rising Property Insurance Costs • Water Quality and Environmental Funding • Private Property Rights • Condo Reform

State of Tampa Bay Housing Year

SF Sales

SF Median Price

MF Sales

MF Median Price

Median HH Income

Monthly FHA

2021

55,609 (8.3%)

$330,000 (21.3%)

20,210 (13.1%)

$225,000 (18.4%)

$57,906

$1,840 -38% of income

(principal, 4.5% interest, MIP)

Produced by Pinellas Realtor® Organization/Central Pasco Realtor® Organization with data provided by Florida Realtors®, Florida’s multiple listing services, and the U.S. Census Bureau..

• Hillsborough to extend south county growth moratorium – Tampa Bay Times 12/14/21 • Tampa’s pending apartment moratorium could have unintended consequences – Tampa Bay Business Journal 4/26/21

• Pasco’s moratorium on apartments extended another six months – Tampa Bay Times 9/28/21 • Hillsborough to consider higher impact fees – Tampa Bay Times 3/3/21 • Clearwater debates development moratorium due to U.S. 19 Concerns – St. Pete Catalyst 1/31/22

Our Focus Upzoning on Transportation Corridors Pre-Approved ADU Plans Employer Assisted Housing (EAH) Designing for the Future

• Joe Farrell, RCE, C2EX, CMLX-1, QAS, Green • VP of Public Affairs • 813-731-8194 (Mobile) • jfarrell@pinellasrealtor.org

Solutions for Increasing the Supply of Affordable Housing February 2022

APA Florida

THE FLORIDA HOUSING COALITION

Quick Refresher: How Affordable Housing is Produced.

• The public sector is legally required to provide that housing is available for current and anticipated population – Housing Element requirement – section 163.3177, F.S. • But public sector does not build affordable housing - it uses its land use and financing tools to ensure that the private sector will produce affordable/workforce housing.

• Primary tools are planning laws and financial subsidy, using incentives and requirements to create an environment in which the private sector will produce affordable housing.

THE FLORIDA HOUSING COALITION

Spotlighting Top Solutions for Increasing the Supply of Affordable Housing • Removing Land Costs – surplus land and CLTs. • Financial Subsidy; Fee Waivers; Regulatory Reform • Using land use authority to create inclusive communities • Preserving the affordable housing you have • Avoiding and overcoming NIMBYism

THE FLORIDA HOUSING COALITION

Surplus Lands

Surplus Lands Law • Adopted in 2006 as part of a broader housing bill designed to stimulate the construction of affordable housing • Fla. Stat. §§ 125.379 requires an inventory of government owned lands “appropriate for use as affordable housing” • Appropriate is not defined; if it is appropriate for market-rate housing, it is appropriate for affordable housing • Slivers of land remaining from right of way work, or properties that would be unsafe for human habitation due to the proximity of toxic uses would not be appropriate THE FLORIDA HOUSING COALITION

Surplus Lands Law • Offer the properties for sale and use the sale proceeds to purchase land for affordable housing development; • Offer the properties for sale and use the sale proceeds to increase the local government fund earmarked for affordable housing; • Sell the properties with a restriction that requires the properties be developed for use as permanent affordable housing; • Donate the properties to a nonprofit housing organization for the construction of affordable housing; or • Otherwise make the properties available for use in the production and preservation of permanent affordable housing (§125.379(2), Fla. Stat.)

THE FLORIDA HOUSING COALITION

Surplus Lands Law

www.flhousing.org/publications

THE FLORIDA HOUSING COALITION

Community Land Trusts

What is a Community Land Trust?

• The vehicle of separating ownership of the land from the building • Also, the nonprofit organization that holds title to the land, sells housing on the land, and administers a ground lease (also used for rental) • Removing the cost of the land makes the housing more affordable

THE FLORIDA HOUSING COALITION

A CLT is an Alternative to Renting • Rental housing supply is inadequate • Renters lose stability when rents go up and they are forced to move, inability to plan savings • CLT homeownership is not an alternative to fee simple homeownership- for those who can afford the price that includes the land, fee simple is the better choice for wealth building • CLT homeownership is better for wealth building than renting

THE FLORIDA HOUSING COALITION

CLTs increase the Supply of Affordable Housing • Reduces need for subsidy over time by creating permanent affordability • Increases household wealth by moving renters into homeownership • Stabilizes neighborhoods, preservation of historic/culture • Ideal way to transform government owned properties into productive use • Approved SHIP CLT model language by FHFC THE FLORIDA HOUSING COALITION

Benefits of CLT Homeownership: For the Individual Household • Price of home is more affordable and make homeownership attainable for lower-income families • Return of equity upon resale (3 types of resale formulas) • Mortgage payments instead of rent payments • Homestead exemption and favorable property tax assessment • A nonprofit is providing stewardship to help CLT homeowners to be successful (extremely low foreclosure rate) THE FLORIDA HOUSING COALITION

How does the CLT work for rental?

• CLT owns the land • The Developer/Owner of improvements could be: For-profit Non-profit • Ground lease provides permanent affordability • CLT can provide compliance monitoring function for income eligibility of tenants and unit set-aside requirements • Penny for Pinellas example THE FLORIDA HOUSING COALITION

THE FLORIDA HOUSING COALITION

Financial Subsidy; Fee Waivers; Regulatory Reform

AHAC Incentives • Modification of street requirements • Expedited Permitting (required to implement) • Inventory of surplus lands • Fee Waivers • Support of mixed-use development, development near transit, and develop• Flexibility in densities • Reservation of infrastructure capacity ment near major employment centers • Accessory dwelling units Beginning 2020, every AHAC must • Reduction of required have one elected official parking/setbacks • Flexible lot configurations • Housing impact statement (required to implement) THE FLORIDA HOUSING COALITION

Incentive example: Impact Fee waivers • Florida law allows local governments to waive impact fees for affordable units • However, local government will likely need a cap on how many impact fees in total can be waived • Since an impact fee waiver is a limited resource, preserve the waiver for units that will be affordable long-term and require that the impact fee waiver actually results in lower housing prices • Consider: provide impact fee waivers only to nonprofit developers with a track record of providing long-term affordable housing.

THE FLORIDA HOUSING COALITION

Increasing density – as a bonus or by-right?

• Increasing density is one of the most valuable bargaining chips a local government has to offer • Before increasing densities across the board as-of-right, strongly consider conditioning density increases on the provision of affordable housing if you give it away you can not later ask for affordable units. SB 7103 • Consider density minimums

THE FLORIDA HOUSING COALITION

You can’t assume that savings will be passed to the household • Housing prices are set at whatever the market will bear – unless you require affordability • Local governments trying to do the right thing can find too much has been given as-of-right, and now cannot require affordability through the land development code (Form Based Code, as example)

THE FLORIDA HOUSING COALITION

Using Land Use Authority to Create Inclusive Communities THE FLORIDA HOUSING COALITION

Require affordability in exchange for reducing the cost of development • If a developer seeks public dollars for things like infrastructure improvements, this is an opportunity to require affordable housing in return • For example, if a large-scale developer (100+ units) seeks public dollars for wastewater infrastructure, roads, or other infrastructure needs, condition the public support on the developer setting aside x% of units as affordable housing • This voluntary, negotiated development process can ensure that public dollars support public goods in the form of affordable housing THE FLORIDA HOUSING COALITION

Protecting the Public Interest: Regulatory Reform Done Right • Regulatory Reform- (incentives) such as increased density, waiver of fees etc. for a mission-based nonprofit will reduce the cost of housing • Regulatory reform incentives for a market rate developer will increase profit and not result in more affordable housing • Unless local government makes affordability a requirement in exchange for the incentives.

THE FLORIDA HOUSING COALITION

Land Use Restriction Agreements • Same/similar to a deed restriction • Recorded in the public records • Runs with the property- able to picked up by title searches, resales will be subject to the terms of the LURA • Addresses- percentage of the property that is to remain affordable (x number of units) and affordable to whom Moderate, low, very low, extremely low- defined in FS 420.0004 • Term of Affordability– for ex. 50 years…to perpetuity.

• Specific Performance – otherwise they will just pay back the grant or value of incentive and sell the property market rate THE FLORIDA HOUSING COALITION

A New Regulatory Reform Tool: HB 1339 Omnibus Housing Bill 2020 § 125.01055(6), Fla. Stat. (2020) Notwithstanding any other law or local ordinance or regulation to the contrary, the board of county [or city] commissioners may approve the development of housing that is affordable, as defined in s. 420.0004, on any parcel zoned for residential, commercial, or industrial use.

THE FLORIDA HOUSING COALITION

HB 1339 • Expands government-owned lands that can be used for housing • Expedites affordable development • Can be helpful for missing middle housing & adaptive reuse • Helpful in combating NIMBY Caveat • Would be harmful if misused to permit affordable housing where people should not live - near toxic uses, in food deserts, areas without adequate transit or infrastructure THE FLORIDA HOUSING COALITION

Missing Middle Housing • Lifting the highly restrictive single-family zoning to permit small scale rental development such as ADUs, duplexes, triplexes.

• Up-zoning policies remove the obligation for an affordable housing developer to seek land use changes on a case-by-case basis- the more you can reduce rezoning applications, the more you can avoid NIMBYism thwarting development.

• If clear and predictive development standards are implemented from the outset, there will be less NIMBYism on the back end.

THE FLORIDA HOUSING COALITION

What Is NIMBYism?

• Historically, a positive outcry to stop the siting of toxic uses near residential uses • But now used to connote objections made to stop the development of affordable housing based on fear and prejudice • Particularly pernicious obstacle for local governments to meet housing needs

Consequences of NIMBYism • The outcry from constituents expressing concerns over the siting and permitting of affordable housing can lead to: - lengthy and hostile public proceedings - increased development costs - fewer development approvals - property rights disputes • The resulting unmet need for rental units leads to severely cost burdened households and an increase in homelessness.

THE FLORIDA HOUSING COALITION

The Florida Fair Housing Act • In 2000, the “Florida Fair Housing Act” (the state’s substantial equivalent to the federal “Fair Housing Act”) was amended to create Section 760.26.

• Fla. Stat. 760.26: Prohibited discrimination in land use decisions and in

permitting of development.—It is unlawful to discriminate in land use decisions or in the permitting of development based on race, color, national origin, sex, disability, familial status, religion, or, except as otherwise provided by law, the source of financing of a development or proposed development.

• Plain English - if you would have approved the market rate development, you need to approve the affordable housing development.

THE FLORIDA HOUSING COALITION

The Florida Fair Housing Act • The expansion of State Fair Housing Protections to include affordable housing in Florida has found success provided local government lawyers and elected officials know about this increased statutory protection.

• Pueblo Bonita Case - Lee County - Nonprofit requested rezoning from mobile home to single family for farmworker families.

• Local Elected officials faced extraordinary pressure- took the DOJ to bring a federal fair housing lawsuit for rezoning to happen using Bert Harris Property Rights Act Dispute Resolution Fl Stat 70.51.

THE FLORIDA HOUSING COALITION

Consider the Racial Equity Implications • Since the landmark 1926 Supreme Court case of Village of Euclid v.

Amber Realty Co., local governments have used “Euclidean” zoning to separate “incompatible” land uses and divide cities and towns into specific uses are permitted.

• Legally affirmed as a tool to curb nuisances, pollution, and to act for the public health, safety, morals, and general welfare of the people by separating potentially toxic industrial and commercial facilities from residential areas, zoning since Euclid has been used to justify exclusion.

THE FLORIDA HOUSING COALITION

Consider the Racial Equity Implications • Local zoning codes that segregate uses by housing type and require subjective standards of “compatibility” with existing surroundings sets the stage for NIMBYism and for segregation.

• Exclusionary zoning laws that create single family only districts and use a subjective test of “compatibility” and consistency with the “character” or “neighborhood scale” perpetuate homogenous neighborhoods of low-density, single-family homes.

• These policies set the stage for an uphill battle when developers of affordable housing look for sites that will provide desperately needed homes for lower income households who are frequently people of color.

THE FLORIDA HOUSING COALITION

Consider only Legitimate Concerns • The key to overcoming community opposition is addressing all the opposition’s legitimate concerns.

• Legitimate, non-discriminatory concerns around issues like traffic or project design may lead the affordable housing developer to modify plans for the proposed development.

• Once the developer has tried to work with the neighbors and is able to report that all legitimate concerns have been addressed, only illegitimate concerns are remain.

THE FLORIDA HOUSING COALITION

If concerns are not legitimate, the development must be approved • Once all legitimate concerns are addressed, if opposition persists, it can be stated with certainty that the opposition is illegitimate and is therefore inappropriate, arbitrary, capricious, or unlawful for the local government to consider in making its land use decision.

• Local officials must have some rational, police power-based (public health, safety, or welfare) purpose for exercising development decisions. Individuals have a fundamental right to fair and non-arbitrary land use decisions THE FLORIDA HOUSING COALITION

“Solution Takeaways” • Local government can bring down the cost of housing and increase the supply of affordable housing by removing land costs by donating surplus lands, supporting a CLT, providing financing, fee waivers, and regulatory reform • Most importantly, in large scale developments, create inclusive communities through the master-plan process by requiring permanently affordable housing.

• Use LURAs unless you are using a CLT (ground lease acts as the LURA) • Planners and Elected Officials need to stand up to NIMBYism THE FLORIDA HOUSING COALITION

About the Florida Housing Coalition • Statewide nonprofit provider of training and technical assistance on everything from ending homelessness to first time homeownership.

• Housing Summits • Drafting policies and ordinances • If it involves housing, we do it! With help from Florida’s Catalyst Program

THE FLORIDA HOUSING COALITION

Sponsored by the Florida Housing Finance Corporation

THE FLORIDA HOUSING COALITION

Access these valuable resources and more under the Publications tab at Flhousing.org Housing News Network Journal Florida Home Matters Report Accessory Dwelling Unit (ADU) Guidebook Affordable Housing in Florida Affordable Housing Resource Guide Affordable Housing Incentive Strategies Case Management Guidebook

Credit Underwriting Guide for Multi-Family Affordable Housing in Florida Disaster Management Guide for Housing Effectively Engaging Individuals with Disabilities in Consolidated Planning Eyesore to Asset – Adaptive Reuse Guide Florida Community Land Trust Best Practices

CLT Primer

Guide to Developing and Operating Small Scale Rental Properties

CLT Homebuyer Education – Buyer’s Guide

Guide to Using SHIP for Rental Housing

CLT Homebuyer Education – Teacher’s Guide

Guidebook for SHIP Administrators

Community-Based Planning Guide

PSH Property Management Guidebook

Creating Inclusive Communities in Florida

Residential Rehabilitation Guide

Creating a Local Housing Disaster Recovery Strategy

Surplus Lands Guidebook The Community Allies Guide to Opportunity Zones

Questions?

JAIMIE ROSS President/CEO ross@flhousing.org