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JACKSONVILLE DAILY RECORD / J ACKSONVILLE RECORD & OBSERVER
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THURSDAY, FEBRUARY 20, 2020
JaxDailyRecord.com
THE SAILER REPORT
As rents rise, Bank of America sees opportunity
SCOTT SAILER STAFF WRITER
Greg Smith, market president of Jacksonville for Bank of America, says grants and partnerships can help address the need for affordable housing. Greg Smith, market president of Jacksonville for Bank of America, said the bank maintains its commitment to boost affordable housing. The bank nationwide last year committed $5 billion over five years to help more than 20,000 low-to moderateincome earners get on the path toward affordable, sustainable homeownership, Smith said. Bank of America says it helps modest-income borrowers buy homes with grant programs that reduce down payments and provide closing cost assistance. Other options offer low down payments and fixed-rate loans without requiring mortgage insurance. Since 2016, Bank of America
says it has provided $106 million in debt and equity financing over three projects to create 450 affordable housing units in Jacksonville. Smith acknowledges the strength of the residential housing market in Northeast Florida through the growth of new home and apartment construction, rising home prices and increasing rents. Smith said Bank of America takes a disciplined approach to the residential mortgage business. “We advocate an advising approach to homebuying, having a positive conversation with borrowers about what is an affordable mortgage payment that fits their income stream and overall budget,” he said. There remain challenges to buying homes. “Even though our cost of living is still favorable compared to the rest of the state, rents and buying a home are still a challenge for those in our community” earning below median incomes, Smith said. He said that earning “$12 to $15 an hour is challenging to afford an apartment. You are probably only able to pay $600 or so, which can’t get you a two-bedroom apartment.” “You’re going to need more money and that’s either you’re working a lot more hours or you are not in an apartment that really works for a family of three or four.” Apartment demand remains strong, according to the Colliers International 2019 multifamily report for the Jackson-
ville area. The report shows a consistent occupancy rate of 94% for almost the past five years, partly due to increased population, employment and income growth. Average monthly rental rates continue to rise, with rents increasing at a faster rate for older apartments geared toward low-income earners. Overall average monthly rental rates rose 2.3% between 2018-19. Rents for older units built before the 1970s rose 7.7%, while rates were up 3.3% for apartments built during the ‘70s. Newer units saw rents rise from 1.5 to 2.5%. Older apartments continued to rent for less. Vintage 1970s and older apartments leased on average for $884 a month or lower, while newer units charged more. The newest leased for an average $1,260. Smith said that presents an opportunity for Bank of America to focus on programs to stimulate affordable housing. “We partner with the Local Initiatives Support Corp., Ability Housing and others with grants and offer lowerrate financing to bring in more affordable multifamily housing inventory to address the need,” Smith said. The Bank of America Neighborhood Builders program issued $200,000 grants to LISC in 2016 and to Ability Housing in 2017. The single-family housing market cycle has been more disciplined than before
the lead-up to the 2007-09 recession, when more houses existed than could be sold. Current demand has stressed the available housing supply, which can increase prices if demand continues to outpace supply and development costs increase. Northeast Florida Builders Association data shows the number of single-family and townhome building permits issued in Duval, Clay, Nassau and St. Johns counties was 4.3% higher in 2019, with 10,345 permits compared to 9,918 permits in 2018. That continues a trend that began in 2012. Permits are up 143% since then. The Northeast Florida Association of Realtors 2019 annual report shows the overall median home sales price increased 5.4% to $233,990 in 2019 from $222,000 in 2018. Median means half of homes sold for more and half sold for less. The median sales price for single-family homes increased by 3.4% year-over-year from $237,000 to $245,000, while more affordable townhomes and condominiums rose 5.3% from $159,000 to $168,000. Bank of America wants to support access to affordable housing. No one, Smith said, wants to return to the post-recession levels of mortgage default. “We are two or three years past all that,” he said.
Marital/ Family Law
ST RS If this is a fit - for you or someone you know - here’s your chance. On April 9, the Jacksonville Daily Record and Jacksonville Record and Observer will recognize nine of the region’s top entrepreneurs. If you know a business owner who has built a successful enterprise from scratch; has shown consistent growth and profitability over the past three to five years; or who has overcome market and economic obstacles to achieve success, let us know. To nominate someone, please e-mail nominations@jaxdailyrecord.com with the name of the nominee, the business and a brief description of why the person is a top entrepreneur. For more information visit: JaxDailyRecord.com/topentrepreneurs
GREG SMITH, MARKET PRESIDENT OF JACKSONVILLE FOR BANK OF AMERICA
SSAILER@ JAXDAILYRECORD.COM (904) 356-2466
WANTED BUSINESS
Entrepreneurs defy conventional wisdom every day with a guts-then-glory approach to business.
“We advocate an advising approach to homebuying, having a positive conversation with borrowers about what is an affordable mortgage payment that fits their income stream and overall budget.”
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