Home Matters Report Palm Beach County

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QUICK FACTS: Palm Beach County isn’t paradise if you can’t afford housing. • Nearly 72,000 very low-income households—including hardworking families, seniors, and people with disabilities—pay more than 50% of their incomes for housing. • On a single day in January 2015, 1,421 people in Palm Beach County were staying in homeless shelters or on the streets. • Of the 15 most common occupations in the West Palm Beach metropolitan area, only one pays over $18.56/hour, the “housing wage” for a 1-bedroom apartment at Fair Market Rent. • Palm Beach County had an estimated 40,000 low-income households who could benefit from owning a modest home. However, only about 4,000 homes were sold as primary residences at or below the median price of $246,010.


WHY DOES HOME MATTER? The health, safety, and welfare of Palm Beach County and the strength of its economy hinges on an adequate supply of affordable housing for working families, elders, and people with disabilities living on fixed incomes.

AFFORDABLE HOUSING REDUCES TAXPAYER EXPENSES • Affordable, community-based housing for seniors and people with disabilities is about one-third of the cost of institutional care. • Chronically homeless persons often cycle through jails, hospitals, and other crisis services. Permanent supportive housing for this high-need population can reduce taxpayer costs by about $20,000 per person per year. • Affordable housing can improve the health and educational outcomes of low-income families and children, reducing the public costs associated with illness and poor school performance.

AFFORDABLE HOUSING BOOSTS THE ECONOMY • Money spent on affordable housing construction and rehabilitation has a ripple effect on local economies. Contractors and suppliers spend money on materials and labor, and workers spend their earnings locally. • For Fiscal Year 2015-2016, Palm Beach County and its four largest cities are estimated to receive a total of $6.52 million in State Housing Initiatives Partnership (SHIP) funds, creating 675 jobs and generating nearly $85 million in positive economic impact.

The Florida Housing Coalition has produced this report in support of Home Matters® (www.HomeMattersAmerica.com), a national movement to make Home a reality for everyone by elevating the importance of Home’s impact on people’s health, education, personal success, public safety, and the economy. Participating in Home Matters is a coast-to-coast coalition composed of members of the general public, leaders of housing and community development organizations, as well as other organizations concerned about increasing the positive impact of Home in their communities.




Introduction Home is the foundation of a vibrant community like Palm Beach County. Home is our foothold in the neighborhoods where our children play and go to school. It is where we rest after a hard day’s work, where we store our belongings, where our children do their homework. And for those of us who own homes, they are often our single greatest source of wealth. For many low-income residents in Palm Beach County, however,

a decent house or apartment exceeds what many low-income

their housing is a source of stress rather than respite. Thousands

families can afford to pay in rent or mortgages. Additionally, in

of working families are paying more than they can afford for

desirable communities like Palm Beach County, more affluent

housing, and cutting back on necessities like nutritious food and

homebuyers and renters bid up the price of even relatively modest

health care as a result. Other low-income families respond to

housing. As a result, many low- to moderate-wage workers, and

high housing costs by living in substandard housing, doubling

people living on fixed incomes due to age or disability, are priced

up with family and friends, or moving frequently, all of which

out. To correct the mismatch between average housing prices

have negative impacts on their health, their children’s education,

and what low- and moderate-income residents can afford to pay,

and the wider community. By contrast, an adequate supply of

Palm Beach County should continue to provide incentives and

affordable housing helps families put down roots, stay healthy

enhance existing local programs that make it profitable for private

and get ahead.

developers to invest in affordable housing. These incentives come

What is Affordable Housing?

from public-private partnerships among lenders, real estate professionals, community-based nonprofit organizations, and

In addition to being a basic human need, housing is a market

local, state, and federal government agencies. Affordable housing

commodity. However, the cost of constructing and maintaining

funders typically impose high standards for building quality and




property management. Every partner and every funding

costs $30,323 annually, compared to over $109,000

source in this community effort—public, private, and

for an intermediate care facility. Homeless persons

nonprofit—is an essential piece of the puzzle.

with severe mental illness, meanwhile, are often

The remainder of this section summarizes the benefits of affordable housing and provides a brief overview of Palm Beach County. Section 2 presents data on the need for affordable housing among low-income households in Palm Beach County, including those

heavy users of public crisis services such as jails and emergency rooms. A study in Central Florida estimates that permanent supportive housing for chronically homeless individuals saves taxpayers an estimated $20,000 per person per year3.

in housing and those who are homeless. Section 2

Health and Education Benefits

also explores the influence of prevailing wages on

Housing plays a major role in our physical and men-

housing cost burden, the tradeoffs that families must make between housing and transportation costs, and the implications of regional commuting patterns. Sections 3 and 4 explore drivers of housing cost burden for low-income renters and owners, respectively, in more detail.

Finally, Section 5

describes the role of the Sadowski Housing Trust

tal health. For low-income individuals and families, lack of affordable housing can have a multitude of negative effects: • Families in unaffordable housing are likely to cut back on nutritious food and health care4.

• Substandard housing poses a variety of health hazards. Dust, mold, and cockroaches can cause

Funds and other tools in crafting solutions to the

asthma and allergies, and peeling lead paint can

affordable housing challenges in Palm Beach County.

reduce IQs and cause behavioral problems in children. Unsafe structural conditions, such as faulty

The Benefits of Affordable Housing

wiring, increase the risk of fire and injury5,6.

Economic Benefits Affordable









Construction and rehabilitation creates local jobs directly, as well as creating business for local suppliers, who in turn hire new workers to meet the increased demand. The workers provide a further boost to the economy by spending their wages at local restaurants, grocery stores, and other businesses.

Once the

development is finished and occupied, the residents create demand for ongoing jobs to meet their needs1. In addition, affordable housing programs are less

• Many low-income families move frequently or double up with friends and relatives if they cannot find affordable housing. Frequent moves are associated with stress and depression, and overcrowding has been linked to poor health in children7,8.

• Homelessness exacerbates a person’s pre-existing health problems, and living on the streets or in shelters poses unique health risks (including tuberculosis, violence, and exposure to weather). Homelessness also makes it difficult to rest and recuperate after illnesses, find a place to store medications, and keep wounds clean and dry9.

costly to taxpayers than providing social services

Many of the health problems associated with a lack of

to persons who are elderly, have disabilities, or are

affordable housing are closely connected to children’s

homeless or precariously housed. According to an

educational performance.

AARP report2, Medicaid-funded nursing home care

to lead paint is known to cause developmental de-

in Florida for seniors and people with disabilities

lays in children, while asthma from exposure to dust

cost over $30,000 annually per person served,

and mold can cause children to miss school and fall

compared to less than $10,400 for Medicaid Home

behind. Frequent moves, overcrowding, and home-

and Community-Based Services (HCBS). For an

lessness have also been linked to lower educational

individual with developmental disabilities, HCBS

attainment in children10.

For example, exposure

WHAT IS AFFORDABLE HOUSING? Misconceptions about affordable housing are widespread, with many citizens associating it with large, distressed public housing projects in central cities. However, plenty of public housing authorities in communities around the nation, large and small, are wellmanaged and have decent units. Furthermore, public housing is only one type of affordable housing. In this report, “affordable housing” refers to privately owned housing that receives a subsidy to bring its rent or purchase price down to a level affordable to a low-or moderateincome family. Except for the subsidy, affordable housing is indistinguishable from market-rate housing— it has the same architectural and landscaping styles, and often has basic amenities like energy efficient appliances and community gathering spaces. Substandard housing is, by definition, not affordable housing.




If a lack of affordable housing can contribute to ill health and educational problems among low-income families and children, then affordable housing is the foundation for good health and achievement in school. For example, a study in Boston found that children in subsidized housing were 19% less likely to be food insecure and 35% more likely to be in good health than children whose families were on the waiting list for subsidized housing11. Additionally, both subsidized rental housing and homeownership have been linked to better educational outcomes for children12,13 .

Overview of Demographic, Housing, and Economic Characteristics Palm Beach County is the third most populous county in the State of Florida, and is similar in many ways to the state as a whole (Table 1). The County has a comparable racial and ethnic profile, and similar rates of labor force participation, unemployment, and poverty. Palm Beach County has a higher median household income ($51,804 compared to $46,036), but its housing costs are higher as well. The County’s median gross rent was the state’s 3rd highest in 2013, while median monthly housing costs for homeowners with mortgages were the state’s 4th highest14. The County also has a higher homeownership than the state (70% compared to 65%), and elderly people make up a larger share of the population (23% compared to 19%). These characteristics have implications for the appropriate mix of affordable housing policies and options in a local community. For example, a relatively high percentage of elderly residents highlights the need for options that help elders live independently, such as funding for emergency repairs, accessibility retrofits, energy conservation measures, and development of handicapped-accessible rental housing. SECTION 2:

Housing Cost Burden and Related Factors Low-Income, Cost Burdened Households in Palm Beach County Housing is generally considered affordable if it costs no more than 30% of a household’s income. Households who pay more than this amount are considered “housing cost 4



Table 1: Basic Comparison Data for Palm Beach County and the State of Florida in 2013. (Source: American Community Survey [ACS] 2013 1-year estimates, Bureau of Labor Statistics 201315.)


State of Florida

Palm Beach County



White/Caucasian Percent of Population



Black/African-American Percent of Population



Hispanic/Latino Percent of Population*



Homeownership Rate







Median Gross Rent



Percent of Population 16 and Older in Civilian Labor Force



Unemployed Percent of Civilian Labor Force



Poverty Rate



Elderly (65 and older) Percent of Population




Median Household Income Median Monthly Owner Costs (households with a mortgage)

*Hispanic and Latino are ethnicity categories, which the Census Bureau counts separately from race. Hispanic and Latino individuals may belong to any race.

burdened”. This is not a perfect benchmark, since it is applied equally

Figure 1 shows the distribution of cost burden and incomes

at all income levels. However, it is a reasonable standard for most

among households in Palm Beach County and the state as a whole.

low-income households. Other analyses of housing affordability

Palm Beach County has approximately 150,000 low-income, cost

focus on household who are “severely cost burdened”, or paying more

burdened households, accounting for 28% of all households. Of

than 50% of their incomes for housing. See the Sidebar on p. 7 for a

these 150,000 households, 36% are headed by an elderly person (65

discussion of terms related to housing costs and incomes.

or older), and 28% have a member with disabilitiesa.

There is overlap between low-income, cost burdened households headed by an elderly person, and those with a member with disabilities.


Figure 1. Low-Income, Cost Burdened Households in Palm Beach County and the State of Florida in 2013. (Source: Custom tabulations by the Shimberg Center for Housing Studies, 2015a16.)

Palm Beach County

State of Florida 94,606 households

18% 10%


55,463 households

11% 60%

59% 13%

Low-Income, Severely Cost Burdened

Low-Income, Moderately Cost Burdened


Low-Income, Not Cost Burdened

Not Low-Income




Over 94,000 households—18% of all households in Palm Beach

As Section 4 notes, low-income households can sustain mortgages

County—are low income and severely cost burdened.

if the principal, interest rate, and fees are reasonable.


prevalence of severe cost burden among low-income households is only marginally higher in Palm Beach County than in the state as a whole, which may surprise many local stakeholders. The similarities in cost burdens among income groups probably reflects the fact that “low-income” is defined relative to the Area Median Income, which is relatively high in Palm Beach County. Nonetheless, in human terms, the County’s prevalence of housing

Between 2005 and 2013, the cost burdened share of low-income households increased minimally in Palm Beach County, from 68% to 69%. The increase in severe cost burden among low-income households was marginally higher, from 41% to 44%17. However, when the data is broken down by tenure and income bracket, some households experienced higher increases in severe cost

cost burden is cause for concern.

burden, as shown in Table 2. Renters between 50.01% and 80%

Figure 2 shows the prevalence of severe cost burden by household

percentage points), followed by ELI renters (8 percentage points).

tenure and income bracket in Palm Beach County. Not surprisingly, extremely low-income households (ELI; see Sidebar) have the highest rate of severe cost burden for each tenure type. Renters are considerably more likely than owners without mortgages to be severely cost burdened—for example, 72% of ELI renters are severely cost burdened, compared to 52% of owners without mortgages. However, the prevalence of severe cost burden is highest among homeowners with mortgages, ranging from 44% in the 50.01-80%

AMI experienced the largest increase in severe cost burden (11 For the former group of renters, the increase in severe cost burden drove the increase in overall cost burden (12 percentage points). For the latter group, the overall increase in cost burden was very small (0.4 percentage points), since the increase in severe cost burden was offset by a decrease in moderate cost burden. This suggests that housing costs as a share of income have increased among ELI households that were already cost burdened.

AMI bracket to 80% in the ELI bracket. This probably reflects the

Overall, these results are not surprising. In a 2013 report on rental

legacy of subprime mortgages made in Palm Beach County, but also

housing in the United States, Harvard’s Joint Center for Housing

shows that homeownership with a mortgage is inherently costly.

Studies found that increases in cost burdens among low-income


There is overlap between low-income, cost burdened households headed by an elderly person, and those with a member with disabilities.

Figure 2: Prevalence of Severe Housing Cost Burden by Tenure and Income Bracket in Palm Beach County in 2013. (Source: Shimberg Center, 2015a.)







Owners with Mortgages


Owners without Mortgages






40 30




10 0



30% of AMI or lower


30.01% to 50% of AMI


50.01% to 80% of AMI


renters over time have occurred mainly among households with moderately low incomes. Among the lowest-income renters, the share of cost burdened households did not increase much, but were extremely high to begin with18. While the prevalence of cost burdens by income bracket and tenure suggests which households are most vulnerable, the absolute numbers of cost burdened households have implications for the appropriate mix and scale of affordable housing strategies. Table 3 shows the number of severely and moderately cost burdened households by tenure and income bracket in Palm Beach County. Severely cost burdened ELI renters are the single largest group (24,335 households), although substantial numbers of ELI owners and households above the ELI threshold are also severely cost burdened. Policy makers often focus on very low-income (VLI) households with severe cost burdens (see Sidebar). Palm Beach County has 71,875 VLI households (39,777 renters and 32,098 owners) with severe housing cost burden.

Homelessness When a household’s rent or mortgage payments compete with other basic needs, such as food and healthcare, they are at risk of homelessness. The County’s homeless population peaked during the recession years and has since declined, similar to statewide homelessness trends. In its 2015 Point-in-Time [PIT] Countb, Palm Table 2. Changes in Cost Burden between 2005 and 2013 in Palm Beach County, by Tenure and Income Bracket. (Source: Shimberg Center, 2015a.)

Overall cost burden (moderate and severe) Owner Households with Mortgage

Percentage Point Change 2005 - 2013 30% AMI 30.01 to 50.01 to or Less 50% AMI 80% AMI 4%



Owner Households without Mortgage




Renter Households




Severe cost burden

Percentage Point Change 2005 - 2013 30% AMI or Less

30.01 to 50% AMI

50.01 to 80% AMI

Owner Households with Mortgage




Owner Households without Mortgage




Renter Households




Terminology for

Income & Housing Cost Burden According to the federal government and the State of Florida, housing is affordable if it costs no more than 30% of a household’s gross income. This includes rent or mortgage payments, utilities, and property taxes and insurance, if applicable. If housing costs more than 30% of a household’s income, but no more than 50%, the household is considered “moderately cost burdened”, and a household paying more than 50% of its income for housing is “severely cost burdened”. Florida Statutes and certain federal housing programs define “low-income” (or “LI”) households as those who earn no more than 80% of the Area Median Income (AMI)—the median income for households of their size within their geographic area. Federal housing assistance programs usually calculate AMI for metropolitan areas, portions of large metropolitan areas, and nonmetropolitan counties within a state. “Very low-income” (VLI) households are those that earn no more than 50% AMI, and “Extremely low-income” (ELI) households earn no more than 30% AMI. In this report, the term “low-income” includes all households at or below 80% AMI, and “very low-income” includes all households at or below 50% AMI. Thus, all ELI households are also classified as VLI and LI, but the reverse is not true. In Florida, the term “moderate-income” generally refers to households with incomes higher than 80% AMI, but no higher than 120% AMI.




Table 3. Number of Cost Burdened Households in Palm Beach County by Tenure and Income Bracket. (Source: Shimberg Center, 2015a)

Households at 30% AMI or Less

Households at 30.01 to 50% AMI

Households at 50.01 to 80% AMI

























Cost Burden / Tenure

Severe Cost Burden

Moderate Cost Burden Totals


Beach County identified a total of 1,421 “literally homeless”

County’s declines in unsheltered homeless persons and homeless

people—those staying in emergency shelters, transitional housing,

veterans were more modest than the state’s. While the number

on the street, or in other places not meant for human habitation.

of chronically homeless individuals declined by 8% statewide, it

As Table 1 shows, the population of literally homeless people

increased by 10% in Palm Beach County. Overall, the County’s

has decreased by 20% in Palm Beach County since 2007, driven

homeless population declined by 10% between 2007 and 2014,

largely by a decrease in unsheltered homelessness. Homeless

compared to a 14% decline statewide.

people in families declined by more than half, while the homeless veteran population (since 2011) declined more modestly (13%). The population of chronically homeless individuals increased by about one-third, possibly due to improved methods for finding and counting these individuals19.

Unfortunately, family homelessness has increased substantially in Palm Beach County, according to another commonly used measure. The U.S. Department of Education provides funding and other support for public school districts to identify children and youth who are homeless at any time during the academic

Comprehensive PIT Count data for the state of Florida is not

year (including summer school), using a definition that includes

yet available for 2015, but Table 4 compares changes between

children who are doubled-up or living in hotels or motels due to

2007 and 2014 for Palm Beach County and the state (except for

their family’s loss of housing or economic hardship. Local school

veterans; see note below Table 4). During these years, the County

district liaisons help homeless children, youth, and their families

achieved a sharper decline in the number of homeless people in

overcome barriers to school enrollment and attendance, and help

families (42%) than the state as a whole (15%). However, the

them identify the services needed to return to stable housing22.

The U.S. Department of Housing and Urban Development (HUD) requires Continuums of Care (CoCs), or geographic networks of homeless service providers, to conduct Point-in-Time Counts of sheltered and unsheltered homeless people at least biennially. Palm Beach County has its own CoC, with the County’s Division of Human Services serving as the lead agency. Most CoCs in Florida and across the nation conduct their PIT Counts on a single day (or night) in the last week of January. b

Table 4: Point-in-Time Counts of Homeless Persons in Palm Beach County and the State of Florida. (Source: Palm Beach County 2015b20, HUD Point-in-Time Count data21.)

Homeless Population Category

Population in Palm Beach County 2015

% Change in Palm Beach County (2007-2015)*

% Change in Palm Beach County (2007-2014)*

% Change in Florida (2007-2014)*

Total Homeless Population





Unsheltered Homeless Persons





Persons in Families





Chronically Homeless Individuals










*Except veterans; 2011 is the baseline year for tracking changes in homeless veteran populations at the Continuum of Care level. 8



Between the 2009-2010 and 2013-2014 academic years, the

Homeless service providers also have to ask whether the system

number of homeless public school students increased by 53% in

that preceded Coordinated Entry was any better. The families

Palm Beach County, compared to a 43% increase statewide (Table

who were most assertive at obtaining services may have been

5). The County’s homeless student population actually dipped

more successful under the old system, but service providers may

in the 2010-11 and 2011-12 academic years, increased sharply in

have overlooked large numbers of families with more acute needs.

2012-13, and declined modestly in 2013-14. These fluctuations were driven primarily by changes in the number of students doubled up with relatives and friends.

Nonetheless, it is cause for concern that Palm Beach County had a sharper increase in its doubled-up student population than the state as a whole, even as it surpassed the state in terms of reducing

Compared to the state, Palm Beach County saw greater increases

sheltered homelessness among people in families (according to

in the number of students who are doubled up, in places not meant

both school district and PIT Count data). This is most likely due

for long-term habitation (cars, parks, campgrounds, etc.), in

to the County’s extremely high rental housing costs (Section 3).

hotels and motels, and awaiting foster care placement. However,

The number of doubled-up students declined by 137 between the

the number of students in shelters declined by a substantial 45%

2012-13 and 2013-14 academic years; if this trend continues, it

in Palm Beach County, compared to a 1% decrease statewide.

may indicate that Palm Beach County is integrating the homeless

In recent years, Palm Beach County has implemented a

crisis response and affordable housing activities more effectively.

Coordinated Entry system to target homeless assistance to

Most of the homeless students identified by school district

individuals and families who need it most, and to divert

liaisons are staying with their parents or guardians, but a

households from the shelter system if possible. This does not

significant minority of these students are unaccompanied.

necessarily mean that the reduction in sheltered homeless

Some of these children and youths are truly living alone, while

families caused the increase in doubled-up students between the

others are living with adult relatives, friends, or neighbors in an

2009-10 and 2013-14 academic years. In the State of Virginia, for

informal arrangement with the child’s parents or guardians. The

example, PIT Count totals for literally homeless people in families

Palm Beach County school district saw a 63% increase in the

declined by 17% between 2010 and 2013 as homeless assistance

number of unaccompanied students from the 2009-10 to 2013-

funds were shifted from shelters to Rapid Re-Housing programs.

14 academic years, compared to a 20% increase statewide. In

During roughly the same period (from the 2009-10 to 2012-13

addition to concerns about the overall level of safety and support

academic years), the number of homeless students in Virginia’s

that these students have outside of school hours, the absence of a

public schools increased, but at a lower rate than the national

formal guardian can make it difficult to obtain authorization for

homeless student population (26.6% compared to 34.4%) .

emergency medical care on a student’s behalf.


Table 5. Homeless Students Identified in Public School Districts in Palm Beach County and the State of Florida. (Source: Florida Homeless Education Program23,24.) % Change in Palm Beach County from 2009-10 to 2013-14

% Change in Florida from 2009-10 to 2013-14







Cars, Parks, Campgrounds etc.








Awaiting Foster Care Placement




Unaccompanied Youth*




Total Homeless Students




Living Situation

Shelters Doubled Up

Students in Palm Beach County 2013-2014

*Unaccompanied youth may be in any of the living situations listed above FLHOUSING.ORG | THE FLORIDA HOUSING COALITION



Low-Wage Jobs Low-wage jobs dominate Palm Beach County’s economy, which largely explains the prevalence of housing cost burdens among low-income households. In the West Palm Beach metropolitan division (hereafter the “metro”), the current median wage for all occupations is estimated at $16.10. This is higher than the statewide median of $15.23, but housing costs are higher as well (see Table 1). As Table 6 shows, the West Palm Beach metro’s top 15 occupations include many low-wage positions in food service, retail, and office settings, similar to the state as a whole26. Eight of the West Palm Beach metro’s top 15 occupations pay median wages below $10.91, the “survival wage” calculated for Palm Beach County by the United Way of Florida’s report on Asset Limited, Income Constrained, Employed (ALICE) householdsc, adjusted to 2015 dollars27. The survival wage allows for the bare minimum in housing, food, child care, and other expenses, with no cushion for emergencies. For a young family of four, the County’s inflation-adjusted survival wage is $27.22—higher than the median wages for all but one of the occupations shown (registered nurses), and more than double the wages of 11 occupations. This means, for example, that two parents working full-time as nursing assistants could not support themselves, an infant, and a preschooler. Many individuals and families whose wages fall short of the “survival wage” receive benefits and services from government agencies and private charities. However, these resources are often not enough to fill the gap. To survive, these households cut their budgets in risky ways, such as eating unhealthy food, putting off preventative health care, and using low-quality child care28. When faced with a crisis, such as a job loss, illness, child care emergency, or breakdown of a car, these households may be forced to double up with friends and relatives, or may become “literally homeless”.

The ALICE Report bases the survival wage on a 40-hour work week, 50 weeks per year. c




Housing and Transportation Costs Faced with high housing costs in the communities where they work, many families live in outlying communities. However, this strategy is not entirely successful, since many of these families have to pay for long commutes. The Center for Neighborhood Technology [CNT] calculates a “Housing + Transportation Affordability Index� for communities across the nation. Just as 30% is the maximum share of income that a family can affordably devote to housing, CNT has determined that 45% is the maximum affordable share of household income that can be spent on combined housing and transportation costs. Table 6. Estimated Median Wages in the Top 15 Occupations in the West Palm Beach Metropolitan Division in 2015. (Source: Florida Department of Economic Opportunity [DEO] 201529, United Way of Florida 2014.)


Median Hourly Wage

Combined Food Preparation and Serving Workers


Waiters and Waitresses




Retail Salespersons


Stock Clerks and Order Fillers


Janitors and Cleaners*


Landscapers and Groundskeepers


Security Guards


Nursing Assistants


Restaurant Cooks


Office Clerks


Customer Service Representatives


Receptionists and Information Clerks


Secretaries and Administrative Assistants**


Registered Nurses


All Occupations


"County Survival Wage" for a Single Adult


"County Survival Wage" for a Young Family of Four***


*Except maids and housekeepers **Except legal, medical, and executive ***Two parents, one infant, and one preschooler FLHOUSING.ORG | THE FLORIDA HOUSING COALITION



Table 7. Housing + Transportation Costs for Typical Palm Beach County Households at 80% of Area Median Income. (Source: Center for Neighborhood Technology [CNT] H+T Affordability Index30.) Cost Variable

Average Cost as % of Income % of Cost Burdened Households


Housing + Transportation





As Table 7 shows, a typical Palm Beach County household at

Figure 3 approximates the balance between rents and renter

80% AMI has a much heavier cost burden when transportation

incomes in Palm Beach County using the best available data.

costs are taken into account . These households pay an average of

According to Reinhold P. Wolff Economic Research, Inc., average

53% of their incomes on housing alone, and an astounding 82%

rents for the County’s professionally managed rentals experienced

of their incomes on combined housing and transportation costs.

a net increase, from about $1,300 in 2008 to about $1,450 in 2014.

When transportation costs are considered, the number of typical

Smaller rental properties and those that are not professionally

households at 80% AMI that are cost burdened grows from about

managed (e.g. “mom-and-pop” rentals) are likely to be excluded

93% to nearly 100%. As the following sections will explain, long

from this dataset31. However, the data for properties that are

and expensive commutes reduce employee productivity and may

included is highly accurate, and these properties are less likely to

drive away qualified workers.

be substandard.


Unlike Reinhold P. Wolff ’s average rents, which rapidly made up


Challenges for Renters As Section 2 demonstrated, housing cost burden is widespread among low-income renters in Palm Beach County. Of all lowincome renter households in the County, 79% are cost burdened and 51% are severely cost burdened. Moreover, in the last decade, severe cost burden has increased among extremely low-income

for ground lost during the Recession, the rent affordable at median renter income dropped in 2009 and has been essentially stagnant since then, mostly hovering between $920 and $925. Not only are affordable rents at median renter income lower than the average rents in Figure 3, but the gap has widened since 2008.

(ELI) and moderately low-income renters. This section discusses

For households with incomes below the median renter income,

several factors that influence housing cost burden among renters.

the struggle to find affordable rental housing is even greater.

Mismatch Between Rents and Wages In attractive coastal communities like Palm Beach County, both the strength of the tourism economy and the quality of life for middle-class residents depend on the hard work of low-paid employees, including waiters and waitresses, janitors, security guards, groundskeepers, and nursing assistants. When these employees do not earn enough to afford housing near their jobs, they may have to sacrifice food, healthcare, and other necessities. Alternatively, they may be forced to live in neighboring communities where housing is less expensive, as discussed in the

Figure 4 compares the median wages for the West Palm Beach metro’s top 15 occupations with the hourly wage, or “housing wage”, needed to afford a 1- or 2-bedroom apartment at Fair Market Rente (FMR), assuming the employee works 40 hours per week, 52 weeks per year. The median wages range from $9.14 for food preparation and serving workers to $32.33 for registered nurses. Remarkably, only registered nurses can afford either a 2-bedroom or 1-bedroom apartment at FMR. For 9 of the top 15 occupations, the median wage is less than half of the housing wage for a 2-bedroom unit ($23.19).

previous section. Both tradeoffs can impact job performance and

Median-wage workers in 12 of the metro’s top 15 occupations can

increase tardiness, absences, and employee turnover.

afford a 1-bedroom unit at FMR if they share housing expenses

These percentages, unlike Census data, are not based on a “universe” of actual households, but are the result of a mathematical modeling exercise using a hypothetical “average” household at 80% AMI (not at or below 80% AMI). The model uses actual regional data on incomes, household composition, workers, housing and transportation costs, and other variables to construct profiles of “average” households and determine their average housing and transportation costs. d

For the West Palm Beach metro area, HUD determines the Fair Market Rent by calculating the 50th percentile rent for recently leased apartments with a given number of bedrooms. For most communities nationwide, HUD uses a 40th percentile standard. HUD uses the 50th percentile standard for communities that need assistance with de-concentrating the geographic pattern of Housing Choice Voucher use. e




Figure 3. Comparison of Average Rents and Affordable Rents at Median Renter Income in Palm Beach County. (Source: Shimberg Center 2015a, ACS 2014 1-year estimates, Reinhold P. Wolff Economic Research, Inc. 201532.)

Monthly Rent (2014 Dollars)

$1,500 $1,400 $1,300 $1,200 $1,100 $1,000 $900









Average Contract Rent (local data; utility cost not included) * Affordable Rent at Median Renter Income (from American Community Survey data) *Likely excludes smaller rental properties and those that are not professionally managed. The 2015 average rent is not adjusted to 2014 dollars.


$35 $30






















/S er W vin ait g er W sa nd ork er W s ait re ss St es Re oc Ca t a kC sh il S le ale ier rk s sp sa La er nd nd s Ja on O sc ni rd s ap to e r er rF s a s an ille d nd rs Cl G ea ro n un er s ds ke * Se e cu pe rit rs N y ur sin Gua r g As ds Re sis Cu sta ta sto nt ur s m a nt er Co Se O rv o ffi ice ce ks Re Cl pr er ks es en Re tativ ce es pt io ni Se Ho sts us Re cre in t g ar ist g W er ies* Ho a e * ge us d N in fo ur g r se W 1-B ag ed s ef ro or om 2Be dr oo m


Fo o


Pr ep

Median Hourly Wage or Housing Wage (2015 dollars)

Figure 4. Comparison of Median Wages and Renter “Housing Wages� for Common Occupations in the West Palm Beach Metropolitan Division. (Source: DEO 201533, National Low Income Housing Coalition [NLIHC] 201534.)

*Except Maids and Housekeeping Cleaners **Except Legal, Medical, and Executive Secretaries FLHOUSING.ORG | THE FLORIDA HOUSING COALITION



with another worker earning the same wage or higher, such as

Shortage of Affordable and Available Rental Units

a spouse. However, they are highly vulnerable to crises such

Palm Beach County does have rental units, both subsidized and

as job loss, illness, or loss of transportation. And for single-

unsubsidized, that are affordable to low-income households.

parent families, the impact of high FMRs is especially severe. For example, if a single mother with two children works fulltime as a nursing assistant or janitor, she cannot even afford a crowded 1-bedroom apartment at FMR, let alone a 2-bedroom apartment that would provide her family with more space. A moderate degree of crowding may be a necessary short-term sacrifice for some families, particularly those who are exiting homelessness. However, crowding takes a toll on children’s health and educational outcomes35,36,37 and should not be the only longterm option for families who need affordable housing. This single mother could also search for apartments with rents well below FMR, but she may have to settle for a unit in poor condition or

However, there are not nearly enough of these units to go around. Not only is the overall supply of affordable rentals limited, but some of these rentals are already occupied by higher-income households. This shortage of affordable and available units is illustrated in the infographic (on the facing page). For low-income households overall, 93 rental units are affordable and available for every 100 renter households. However, at lower income levels, the shortage is obvious: only 42 affordable and available rentals for every 100 very low-income households, and only 24 affordable and available rentals for every 100 extremely low-income households38.

in a neighborhood where she and her children feel unsafe. It flies

Tightened Rental Market

in the face of the principles of fair housing choice to expect low-

According to the American Community Survey, Palm Beach

income families to live in these conditions.

County’s rental vacancy rates have closely tracked statewide

Figure 5. Rental Vacancy Rates in Palm Beach County and the State of Florida. (Source: Shimberg Center 2015a, ACS 2014 1-year estimates, Reinhold P. Wolff Economic Research, Inc. 2015.) 15

Rental Vacancy Rate (%)









Florida *Likely excludes rentals that are not professionally managed. 14




Palm Beach County




Palm Beach County (local data)*




numbers for most of the past decade (Figure 5). Rental vacancy rates at both the County and state level peaked during the recession years and then declined. Palm Beach County’s rental vacancy rate, however, dropped to 7.9% in 2013 and then to 6.1% in 2014, while the state’s rental vacancy rate remained above 8%. According to local data, which is likely restricted to professionally managed apartments (see p. 12), rental vacancy rates have dropped from 7.9% in 2009 to 3.5% in 2015. SECTION 4:

Challenges for Homebuyers Although the Great Recession has tempered American attitudes toward homeownership, most renters still aspire to own a home one day39. For a median-income household in Palm Beach County, purchasing a home is only marginally more affordable than renting40. However, homeownership has additional benefits, including a chance to put down roots in a community, gain access to desirable neighborhoods and schools, and build wealth. For many low- and moderate-income families, homeownership is a viable option—provided that the mortgage includes strong underwriting criteria and the principal and interest rates are not too high (see discussion of Figure 2 on p. 6). Some critics blame the Community Reinvestment Act (CRA) for precipitating the foreclosure crisis, since it requires banks to lend to underserved homebuyers in their communities, but rigorous research dispels this myth. CRA-regulated lenders are subject to strong underwriting standards, and their CRA-related loans have performed similarly to their other mortgage products. Moreover, fewer than 10% of subprime loans in the years before the foreclosure crisis were made by CRA-regulated institutions41, and middle- and high-income homeowners accounted for the most mortgage defaults after 200742. National Low Income Housing Coalition analysis using 2007-2011 HUD Comprehensive Housing Affordability Strategy (CHAS) data. This analysis understates the actual prevalence of housing cost burden among low-income households. For example, a household at 60% AMI could live in an apartment affordable at 75% AMI. The household would be cost burdened, but the rental unit would still count as affordable and available to households between 51% and 80% AMI. FLHOUSING.ORG | THE FLORIDA HOUSING COALITION



Despite the availability of inexpensive bank-owned and short sale

and firefighters—are considered essential service positions. Of

homes in the wake of the foreclosure crisis, Palm Beach County

these occupations, the latter three have median incomes that are

has a severe shortage of homes for sale that are affordable to low-

comparable to or slightly higher than the Median Family Income

and moderate-income homebuyers. This section explores the

of $65,648.

impacts of wages, home prices, and inventory on the affordability of homeownership.

The 25th percentile for home sale prices was $145,563 in 2013, meaning that 25% of all homes sold were at or below this priceg.

Relationship of Wages to Local Home Prices

Using conventional underwriting standards, the minimum

Figure 6 compares Palm Beach County’s home prices in 2013f, the

income needed to afford this home was $47,357.

most recent year for which the Shimberg Center has detailed data,

essential service occupations shown, three had median annual

to wages for ten skilled occupations that are generally considered

incomes higher than this threshold, elementary school teachers

to be tickets to the middle class. Each of the occupations shown

were less than $700 short, and LPNs were about $2,800 short.

in Figure 6 was in the top 100 for the West Palm Beach metro,

Among the remaining five occupations, the white-collar workers

in terms of the number of people employed in 2013. Five of the

(executive secretaries and paralegals) could afford the 25th

occupations—licensed practical nurses (LPNs), elementary school

percentile home price, while the blue-collar workers (electricians,

teachers, police and sheriff ’s patrol officers, registered nurses,

mechanics, and truck drivers) could not.

Of the five

Figure 6. Comparison of Median Annual Incomes for Selected Occupations in the West Palm Beach Metropolitan Division to Home Sale Prices in Palm Beach County in 2013 (2014 dollars). (Source: DEO 2013, HUD 201243, Shimberg Center 2015a.)







s s s e s rs * * nt er m rs* tant se te a c r e* e* o e t h u c c c s s h ffi i i i i g n r r c N I fi l a P P ss ss ct r lO ec ily le ed Te n A na ire le le ile lA M ro r l E F a a t o a a m i i e o S S t a g Pa st -Tr s& ca ho Adm Le ile ian ’s gi nF n t or c o t e a d & ff a n i S i V c R e r e ci y & als ed M rc hi l& he Tra ar ries g e c t a d S M e r P & c e a ti en al y th ffo eT UD e& ar m cret ac 5 c A av c r i H P i e l 2 l e P o e rv E H d Po et ed Se eS or s v m ff i o t A en co ut Au In to Lic ec x e E m co In

s er

iv Dr


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*Except special education **Single-family homes, townhomes, and condominiums with homestead exemptions the year after sale. 16



To afford the County’s median home sale price of $246,010, a

Of the homes sold in 2013 for which homestead exemptions were

family would need a minimum income of $82,863—well above

claimed in 2014, 2,021 were sold at or below the 25th percentile

the Median Family Income and the median incomes of all the

price of $145,563, affordable at an annual income of $47,357

occupations shown in Figure 6. Some policy makers argue, with

(Figure 7). These sales were dwarfed by the pool of 40,010 potential

good reason, that low-income homebuyers should focus on the

homebuyers in the 50.01% and 80% AMI bracket alone—including

more modest segments of the home market. However, there are

severely cost burdened owners who might want to downsize, and

limitations to this approach. Some lower-priced homes may be

cost burdened renters who might aspire to homeownershiph. The

in poor condition, in neighborhoods with higher crime rates or

potential homebuyer pool in Figure 8 undoubtedly includes some

lower school quality, or located far from employment centers and

households with incomes above $47,357, since the “low-income”

other amenities. If essential service workers with lower wages

limit for a family of three was over $49,000 in 2013. However,

(e.g. LPNs) are asked to sacrifice location and other amenities for

including homes that sold between the 25th percentile and the

price when buying a home in Palm Beach County, it may become

median price of $246,010 would only increase the home supply

difficult to recruit qualified personnel to the community.

to about 4,000.

Limited Supply of Moderately Priced Homes

It is not clear if home sale and construction activity in the next

Even if all modestly priced homes were in good condition and located

few years will expand the affordable supply for low-income

in desirable areas, Palm Beach County would not have enough

buyers. Between 2012 and 2013, sale prices for homes that

homes for sale to meet the needs of all low-income homebuyers. This

obtained homestead exemptions within a year increased by

is due in part to competition from investors, wealthy vacationers, and

18%. According to preliminary data on homes sold in 2014 that

others who are able to pay cash and do not occupy the homes year-

obtained a homestead exemption within a year, the median sale

round. In 2013, 65% of single-family homes and condominiums

price increased by 5% between 2013 and 2014, from $246,010

sold in Palm Beach County had no homestead exemption in 2014,

to $261,63944. By contrast, the County’s median income was

higher than the pre-recession peak of 62% in 2006. Units without

fairly stagnant between 2012 and 2014, and has declined by 14%

homestead exemptions are far less likely to be occupied year-round

between 2007 and 201445. Meanwhile, the average per-unit value

by the owner.

for single-family and multifamily building permits increased

Figure 7. Comparison of Home Sale Prices to Cost Burdened Households Between 50.01% and 80% AMI in 2013. (Source: Shimberg Center 2015a.) 50,000

Moderately Cost Burdened Renter Households 40,000 30,000




10,000 2,021 0

Homes in the 25th percentile sales price*


Severely Cost Burdened Renter Households Severely Cost Burdened Owner Households *Single-family homes (including townhomes) and condominiums with homestead exemptions the year after sale.

Number of Households

Assumptions in Figure 7: 1) Median hourly wages were converted to annual incomes, if necessary, by assuming a 40-hour work week, 52 weeks per year, 2) 30-year fixed rate mortgage at 4.5% interest, 3) FHA-insured with a 3.5% down payment, 4) Front-end ratio of 31%, back-end ratio of 41%, 5) All other household debt service is 18% of annual income, 6) Assessed value is 85% of the purchase price, 7) Homestead exemption is $50,000, 8) Mill levy is $18.84, and 9) Property and mortgage insurance combined is 1% of the purchase price annually. f

Of homes sold in 2013 for which a homestead exemption was claimed in 2014, over one-third were condos, which had a 25th percentile sale price of $58,797 in 2013. The 25th percentile price for single-family homes, including townhomes, was $192,643. g




between 2013 and 2014, while the number of units permitted

WHP units must be affordable to households between 60% and

decreased .

Unless the supply of moderately priced homes

140% AMI (based on a family of four). The required percentage

increases sharply, or incomes rise faster than home prices, low-

of WHP units in a development varies, depending on the zoning,

income families will face a shortage of affordable homes for the

density bonuses, and other incentives sought by the developer.

foreseeable future.

Additionally, developers have alternatives to constructing WHP


units onsite. Depending on the proposed share of WHP units

Shared Equity Tools for Affordable Homeownership As this section has shown, Palm Beach County’s private home sale market cannot single-handedly meet the needs of all costburdened households with moderately low incomes, let alone meet the needs of very low-income households. To help make homeownership more accessible for these households, Palm Beach County’s stakeholders have used two innovative tools to produce permanently affordable homes: 1. Enactment of an inclusionary housing ordinance known as the Workforce Housing Program (WHP) 2. Creation and operation of several Community Land Trusts

and the targeted income groups, the developer can pay a fee-inlieu, donate land for affordable housing construction (e.g. by a nonprofit housing developer), or buy existing homes and deedrestrict them for long-term affordability. Since the WHP was enacted shortly before the housing market crash, the number of affordable units produced has been limited. Nonetheless, it has had an impact: as of June 2015, 1,812 units had been approved and 759 units had been built. Additionally, nearly $900,000 has been collected in in-lieu payments. County officials and stakeholders are currently reviewing the WHP and considering modifications to make it more streamlined and effective.

Workforce Housing Program Palm Beach County’s Workforce Housing Program, enacted

Inclusionary Housing will become an increasingly important

in 2006, is a type of “Inclusionary Housing” or “Inclusionary

recover. In many high-cost communities throughout the nation, IH

Zoning” ordinance.

Inclusionary Housing (IH) ordinances

ordinances have made a worthwhile, albeit modest, contribution to

require or encourage developers to sell or rent a certain percentage

the affordable housing stock. Despite the fears of many developers

of residential units (often 10% to 15%) in new developments

and public officials, IH does not substantially reduce the rate of

at prices affordable to low- and moderate-income households.

residential construction or increase housing prices, especially if

These ordinances are usually enacted in communities with active

density bonuses and other cost offsets are offered48,49.

and high-cost housing markets. The underlying principle is that all beneficiaries of market-rate development—including landowners, developers, and affluent homebuyers, as well as local governments—should help to offset the burden of high housing prices on low- and moderate-income workers. Moreover, IH promotes fair housing goals by enabling lower income families to live in affluent neighborhoods with good schools and other amenities. To help offset the cost of building below-market-rate units, many IH ordinances offer incentives to developers, such as density bonuses and expedited permitting. Additionally, many IH ordinances give developers the option to pay a fee or donate land in lieu of building affordable units on-site47.

policy tool as Palm Beach County’s housing market continues to

Community Land Trusts A Community Land Trust (CLT) is a nonprofit housing provider that develops and sells homes while retaining ownership to the land underneath the dwellings. By removing the cost of the land from the home price, CLTs are able to sell homes at prices affordable to low- and moderate-income families. CLT homebuyers make nominal regular payments to the CLT for a long-term (usually 99year) ground lease on the land. The ground lease stipulates that if the family sells the home, it must be offered at an affordable price to another income-qualified family. For families whose incomes are too low to obtain conventional

Palm Beach County’s WHP is mandatory, and applies to all new

mortgages, CLT homes can be an attractive alternative to renting.

residential developments of 10 or more units within the Urban/

Compared to many unsubsidized low-cost rentals, CLT homes

Suburban land use tier in the County’s unincorporated area.

tend to be in better condition and offer more space, privacy, and

This analysis does not consider moderately cost burdened owner households between 50.01% and 80% AMI, since these households have a better chance of refinancing their current homes than severely cost-burdened owners with similar incomes. h




stability. The resale formulas for CLT homes provide homeowners


with a fair share of the price appreciation, while ensuring that

Affordable Housing Resources

low- and moderate-income families can continue to benefit from

As the previous sections have shown, Palm Beach County is

this opportunity.

not paradise for the thousands of low-income households who

Community Land Trusts were established in many Florida communities during the housing boom. For local governments and their nonprofit partners, it was becoming increasingly costly to use housing subsidy dollars (see Section 5) to provide down payment assistance to low-and moderate-income homebuyers. CLT land purchase and home construction subsidies were more efficient, since the resale restrictions ensure that the homes will be affordable long-term. A number of Florida’s CLTs were unable

cannot find an affordable place to live. Both median rents and home sale prices are out of reach for many low-income workers, and the supply of modestly priced homes for sale is limited. For working families who find lower-cost housing far from their jobs, their combined housing and transportation costs can absorb the vast majority of their income. Some individuals and families who cannot find affordable housing end up literally homeless, doubled up, or living in motels.

to survive the recession as the fee simple purchase prices on

Palm Beach County and several of its cities receive federal funding

foreclosed homes fell below the prices on the CLT homes, but

for affordable housing development and rehabilitation, mainly in

Palm Beach County remains a hotbed of CLT activity. In fact,

the form of federal Low Income Housing Tax Credits and grants

half of all Florida’s active CLTs are located in Palm Beach County.

from HUD. However, there will always be a need for highly flexible

Since Palm Beach County’s CLTs are relatively new, their performance cannot be comprehensively evaluated. However, national data shows that CLT mortgages have much lower rates of foreclosure and serious delinquency than conventional marketrate mortgages50. CLTs can play an essential role for both the local government and the private sector market rate developers in communities with inclusionary zoning ordinances, such as Palm Beach County. The CLTs can take title to and construct homes on land dedicated by developers, or can use in-lieu fee proceeds to purchase and develop land. While CLTs and inclusionary housing alone cannot address Palm Beach County’s affordable housing needs, the importance of these two tools cannot be overstated. An inclusionary zoning ordinance creates affordable housing units that would otherwise

funding sources controlled by state and local governments. In Florida, the Sadowski State and Local Housing Trust Funds help to meet this need. The following section describes the structure and impact of the Sadowski Funds, and their role in leveraging public-private partnerships in Palm Beach County.

Sadowski History and Major Programs More than 20 years ago, a diverse coalition of Florida’s affordable housing advocates, business and industry groups, and faith-based organizations recognized the need for a dedicated state revenue source for affordable housing. In 1992, the state legislature passed the William E. Sadowski Affordable Housing Act, which raised the state documentary stamp tax on deeds by ten cents per $100 of the property’s valuei. The “doc stamp” funds are directed to two trust funds, one for local governments and one for the state.

not be built in the County, while the CLT ensures that those

The Local Housing Trust Fund supports the State Housing

units remain affordable in perpetuity, retaining the subsidy for

Initiatives Partnership (SHIP) program, which primarily funds

generations to come and reducing taxpayer expense from having

the production and preservation of affordable ownership housing

to replace affordable housing that is lost from the inventory.

for low- and moderate-income households. The Florida Housing

While Palm Beach County has an inclusionary zoning ordinance

Finance Corporation uses a population-based formula to distribute

in effect and has six active community land trusts, it does not

SHIP funds to all 67 counties and to cities eligible for Community

appear that the connection has been made between these two

Development Block Grant (CDBG) funds. SHIP is most commonly

tools in Palm Beach County. The following section discusses how

used to support home construction, rehabilitation to make homes

multiple funding sources and policy tools, such as inclusionary

safe and/or handicapped-accessible, and down payment assistance.

housing and CLTs, can fit together in a comprehensive affordable

It gives local governments plenty of flexibility to meet local needs

housing strategy for Palm Beach County.

and preferences, as long as a few basic requirements are met. These FLHOUSING.ORG | THE FLORIDA HOUSING COALITION



requirements, found in Florida Statute 420, include:

• At least 65% must be spent on homeownership activities • At least 75% must be spent on construction (including new • • •

construction and rehabilitation) At least 30% must be used to assist very low-income households At least 60% must be used to assist low-income households No more than 10% may be used on administration

The State Housing Trust Fund supports several activities, including administration of the Sadowski funds by the Florida Housing Finance Corporation. The main Sadowski-funded state program is the State Apartment Incentive Loan (SAIL) program. SAIL provides funding on a competitive basis for the construction of affordable multifamily rental housing. Both SHIP and SAIL complement federal funding sources in important ways:

• Helping local communities provide the matching funds required for many federal housing grants.

• Providing a buffer against fluctuations in federal

appropriations, such as the substantial reduction in funding for HUD’s HOME program in recent years.


• Providing a funding source for activities that are not

permitted by federal grants. For example, SHIP funds can provide rapid re-housing assistance for families with children who are doubled up or living in motels, and who may have trouble qualifying for HUD homeless assistance funds.

Impact of Sadowski Funds in Palm Beach County State Housing Initiatives Partnership (SHIP) In the 2015-2016 Fiscal Year, Palm Beach County is expected to receive $6.52 million in SHIP funds, including the SHIP allocations for the County’s four largest cities (Table 8). This SHIP allocation will leverage over $28.6 million in additional public and private funds—a ratio of 4.4 to 1. With over $35 million in SHIP and leveraged funds, local housing developers and public agencies are expected to assist 269 owner-occupied and 96 rental units, creating 675 jobs and generating nearly $85 million in positive economic impact for the County. In addition to boosting Palm Beach County’s economy, SHIP has given numerous low- and moderate-income families a hand up. Between Fiscal Years 2006-07 and 2011-12, the time period

In 1995, the State Legislature shifted another ten cents of documentary stamp tax revenue from general revenue to the Sadowski trust funds.

Each SHIP Dollar

is Required to Meet the Following Criteria: At least 30% must be used to assist very low-income households

No more than 10% may be used on administration 20


At least 65% must be spent on homeownership activities

At least 60% must be used to assist low-income households

At least 75% must be spent on construction-related activities (including new construction & rehabilitation)


for which data is readily available, SHIP assisted 2,037 housing units in the County, including the four largest cities that receive SHIP funds directly. All forms of assistance are captured in these numbers, including construction and rehabilitation, down payment assistance, foreclosure prevention, and assistance for homeless shelters and transitional housing.j Between FY 2006-07 and 2008-09, before the annual Sadowski Trust Fund sweeps by the State Legislature, SHIP assisted an average of 613 units per year in the County. Throughout the six-year period, 18% of Palm Beach County’s SHIP-assisted units were targeted to elderly households52. State Apartment Incentive Loan (SAIL) Program Palm Beach County currently has 4,471 units in 25 completed developments that have received SAIL funding53,54. Seventeen percent of these units are targeted to elderly tenants. Fifteen of the completed developments, with a total of 2,763 units, were built between 2000 and 2009, and another two developments with 224 units received financing in 2014. SAIL’s focus on rental housing complements SHIP’s primary focus on homeownership,

Additional Funding Sources

As important as the Sadowski Trust Funds are, they were never meant to single-handedly meet the affordable housing needs of Florida communities. They were intended to leverage a wide variety of public and private resources, including federal funding programs, local government contributions, support from local foundations and businesses, and volunteer hours. Local “skin in the game” is especially important—it shows that the community recognizes how a broad range of housing options improves its overall quality of life. With affordable housing needs growing, and funding from HUD and other federal agencies dwindling, local governments need to contribute to affordable housing development in innovative ways. The end of Section 4 discussed the advantages of Inclusionary Housing (IH) and Community Land Trusts (CLTs), especially when used in a coordinated manner.

Palm Beach County’s

Workforce Housing Program (WHP) and CLTs make modest but valuable contributions to the affordable housing stock, and local stakeholders should work to strengthen and streamline these

since Palm Beach County (and other SHIP communities) can

programs. As HUD enforces the strengthened provisions of its

spend no more than 25% of its annual SHIP distribution on rental

Affirmatively Furthering Fair Housing rules, the WHP and CLTs

activities. Additionally, some SAIL developments require both

will also help the County to integrate affordable units into desirable

SHIP and SAIL funds to be financially viable.

neighborhoods with good schools, jobs, and other amenities.


For homeless emergency shelter and transitional housing facilities, a bed is counted as a “unit”.

Table 8. Estimated Economic Impacts of State Housing Initiative Partnership (SHIP) Funds in Palm Beach County*. (Source: Sadowski Coalition 201551.)

Type of Impact Estimated 2015-2016 SHIP funds

Amount of Impact $6,521,710

Other funds leveraged


Total development costs


Owner units assisted


Rental units assisted


Total units assisted


Jobs created


Total economic impact


*Including SHIP allocations for the County’s four largest cities




How are the SHIP Programs funded in Palm Beach County? The doc stamp tax on all real estate in Florida increased in 1992. The additional money generated is dedicated to the state and local housing trust funds. 70% is directed to local governments (all 67 counties) and Florida’s entitlement cities to fund the SHIP program.


Uplifts Our Family, Friends, and Neighbors in Palm Beach County In Palm Beach County, the Fair Market Rent (FMR) for a 1-bedroom apartment is $965. In order to afford this, a household must earn at least $38,604 annually ($18.56/hour). For that same 1-bedroom apartment, a minimum wage worker earning $8.05/hour must work 92 hours/week year round or the household must include 2.3 minimum wage earners working year round.

resale. SHIP homebuyers also attend a pre-purchase homeownership counseling class.

SAIL funds produce apartments for Palm Beach County’s workforce, rehabilitate existing apartments in dire need of repair, and provide homes for the County’s most vulnerable populations—including homeless veterans, the frail elderly and persons with disabilities, who might SHIP funds can be used to move the existing housing stock. otherwise need to live in institutional settings. SHIP provides down payment and closing cost assistance, typically a soft second mortgage that is repaid only upon















From construction workers to retailers; an investment in housing creates jobs for Palm Beach County. Housing dollars will put Palm Beach County’s out-of-work housing industry back to work repairing homes and improving the real estate market. SHIP funds can be used for rehabilitation/renovation of existing empty housing stock to ready it for families to move in.





INVESTS LOCALLY SHIP has been successfully operating in Palm Beach County and its four largest cities for more than 20 years. SHIP program flexibility allows these communities to meet their individual needs and revise strategies in accordance with the local market.

SHIP has a proven track record for performance, transparency, and accountability. Palm Beach County needs affordable housing. Using the housing trust fund monies solely for housing is the right thing to do-for residents in need; for the benefit of taxpayers; and for the growth of Palm Beach County's economy.


FUELS ECONOMIC DEVELOPMENT The appropriation would result in a positive economic impact of over 85 million.









Summary and Conclusions Palm Beach County Doesn’t Have Enough Affordable Housing:

• Approximately 150,000 low-income households are paying more than 30% of their incomes for housing, the maximum amount considered affordable by experts.

• 71,875 very low-income households are severely cost burdened, meaning that they pay more than 50% of their incomes for housing.

• 72% of the County’s extremely low-income (ELI) renters were severely cost burdened in 2013, an increase of 8 percentage points since 2005.

• In the County’s 2015 “Point-in-Time” (PIT) homeless count, homeless service providers counted 1,421 people in shelters or on the streets, a net decrease of 20% since 2007.

• In the 2013-2014 academic year, the Palm Beach County School District identified nearly 3,000 students who were homeless or precariously housed, a 53% increase since the 2009-2010 academic year. Palm Beach County had a larger increase in student homelessness than the state as a whole, even though its PIT count data shows a sharp decline in “literal homelessness” among families.

• Many of the West Palm Beach metro’s most common occupations don’t pay enough for a family’s basic survival. For example, two parents working as nursing assistants could not support themselves, an infant, and a preschooler.

• Many low-income families live far away from their workplaces, trading high housing costs for high transportation costs. For a typical household at 80% of Area Median Income, taking transportation costs into account increases the average cost burden from 53% to 82%.

Many Palm Beach County Workers Don’t Earn Enough to Pay for Housing:

• Palm Beach County’s average rent exceeds what a household at the median renter income can afford to pay, and the gap has grown wider in the last decade.

• Of the West Palm Beach metro’s top 15 occupations, only registered nurses have a median hourly wage above $18.56, the “housing wage” to afford a 1-bedroom apartment at Fair Market Rent. 24


• For every 100 extremely low-income renter households, Palm Beach County has only 24 affordable and available rental units.

• Palm Beach County’s rental market is tightening. Rental vacancy rates dropped from 12.3% in 2009 to 6.1% in 2014. Statewide rental vacancy rates declined during the same period, but were still over 8% in 2014.

• In 2013, the median home price of $246,010 was out of reach for a household at the Median Family Income of $65,648, and for many essential service workers and other professionals. Even more moderately priced homes were out of reach for some skilled blue-collar and white-collar workers, including electricians and licensed practical nurses.

• In 2013, Palm Beach County had about 40,000 low-income households who could have benefitted from purchasing a modest home. However, only about 2,000 to 4,000 homes in their price range were sold as primary residences.

• Palm Beach County’s Inclusionary Housing ordinance (the Workforce Housing Program) and Community Land Trusts have an important role to play in expanding the affordable housing supply, especially in high-opportunity neighborhoods. These tools had limited effectiveness during the Recession, but will become increasingly important as the housing market continues to rebound.

Sadowski Funds Play a Vital Role in Meeting Affordable Housing Needs:

• For Fiscal Year 2015-2016, Palm Beach County and its four largest cities are estimated to receive a total of $6.52 million in State Housing Initiatives Partnership (SHIP) funds, creating 675 jobs and generating nearly $85 million in positive economic impact.

• Between the 2006-07 and 2011-12 fiscal years, SHIP funds in Palm Beach County (including its four largest cities) assisted 2,037 units, mainly owner-occupied. 18% of these units were targeted to elderly households. Before the State Legislature began to sweep the Sadowski Trust Funds, the County assisted 613 units annually with SHIP.

• Palm Beach County has nearly 4,500 multifamily rental units in developments that received SAIL financing, including over 3,000 units built or financed between 2000 and 2014.


• To increase its affordable housing supply, Palm Beach

Palm Beach County needs a multi-pronged strategy to expand its

County should advocate for maximum funding for the

affordable housing supply. Local stakeholders should continue

Sadowski State and Local Trust Funds, while finding creative

to advocate for the Sadowski Funds to be fully appropriated

ways to increase local affordable housing resources. For

for housing, since these funds provide a vital buffer against an

example, the County can expand affordable homeownership

uncertain federal funding environment. Stakeholders should also

while meeting fair housing goals by improving upon its

enlist support from as many local sources as possible, including

Workforce Housing Program (WHP) and strengthening its

business owners, foundations, employers, faith groups, and

Community Land Trusts (CLTs).

private citizens. Finally, the County can expand fair housing

CONCLUSION To provide high-quality housing that low-income families can afford, the private housing market needs public incentives. In

choice by supporting and strengthening the shared equity tools it already has, including the Workforce Housing Program and local nonprofit Community Land Trusts.

Florida, the Sadowski State and Local Housing Trust Funds

Individuals and families from all walks of life make Palm

provide critical support for affordable housing activities,

Beach County the vibrant community that it is. Low-income

including construction and rehabilitation subsidies for private

workers ensure that residents and tourists alike have a safe and

developers, purchase assistance for low-income homebuyers, and

comfortable experience in Palm Beach County, while elders and

financial assistance to help families avoid foreclosure or eviction.

neighbors with disabilities add richness and diversity. To reach

Sadowski Funds are particularly important for leveraging other

its economic and cultural potential, Palm Beach County needs

resources, such as federal grants and private local contributions.

affordable homes for everyone.













Endnotes Wardrip, K., Williams, L., and Hague, S. 2011. The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development: A Review of the Literature. Washington, DC: Center for Housing Policy. http://www.nhc.org/media/files/Housing-and-Economic-Development-Report-2011. pdf. Last accessed 1/6/15. 1

Houser, A., Fox-Grage, W., and Ujvari, K. 2012. Across the States: Profiles of Long-Term Services and Supports. Washington, D.C.: AARP. http://www. aarp.org/content/dam/aarp/research/public_policy_institute/ltc/2012/across-the-states-2012-full-report-AARP-ppi-ltc.pdf. Last accessed 12/19/14. 2

Shinn, G.A. 2014. The Cost of Long-Term Homelessness in Central Florida. Orlando, FL: Central Florida Commission on Homelessness. http://shnny. org/uploads/Florida-Homelessness-Report-2014.pdf. Last accessed 12/19/14. 3

Cohen, R. 2011. The Impacts of Affordable Housing on Health: A Research Summary. Washington, DC: Center for Housing Policy. http://www.nhc. org/media/files/Insights_HousingAndHealthBrief.pdf. Last accessed 1/6/15. 4



Newman, S.J. 2008. Does Housing Matter for Poor Families? A Critical Summary of Research and Issues Still to be Resolved. Journal of Policy Analysis and Management 27 (4): 895-925. 6


Cohen 2011.


Newman 2008.

National Health Care for the Homeless Council. 2011. Homelessness & Health: What’s the Connection? http://www.nhchc.org/wp-content/ uploads/2011/09/Hln_health_factsheet_Jan10.pdf. Last accessed 12/19/14. 9

Brennan M. 2007. The Positive Impacts of Affordable Housing in Education: A Research Summary. Washington, DC: Center for Housing Policy. http:// www.nhc.org/media/documents/Housing_and_Education.pdf. Last accessed 1/6/15. 10

Children’s HealthWatch and Medical-Legal Partnership Boston. 2009. Rx for Hunger: Affordable Housing. http://www.childrenshealthwatch.org/ publication/rx-for-hunger-affordable-housing/. Last accessed 12/19/14. 11


Newman 2008.

Newman, S.J. and Harkness, J. 1999. The Long-Term Effects of Housing Assistance on Self-Sufficiency: Final Report. Washington, DC: U.S. Department of Housing and Urban Development [HUD]. http://www.huduser.org/portal//Publications/pdf/longterm.pdf. Last accessed 12/19/14. 13

American Community Survey [ACS]. [2013 1-year estimates] http://factfinder.census.gov/faces/nav/jsf/pages/searchresults.xhtml?refresh=t. Last accessed 7/22/15. 14


Bureau of Labor Statistics. [Local Area Unemployment Statistics with annual averages] http://data.bls.gov/cgi-bin/dsrv?la. Last accessed 7/8/15.

Shimberg Center for Housing Studies, University of Florida. 2015a. [Custom tabulations of 2013 Public Use Microdata Sample (PUMS) data and home sale data from County Appraiser tax rolls] 16



Joint Center for Housing Studies of Harvard University [JCHS]. 2013. America’s Rental Housing: Evolving Markets and Needs. http://www.jchs. harvard.edu/sites/jchs.harvard.edu/files/jchs_americas_rental_housing_2013_1_0.pdf. Last accessed 12/28/14. 18

Palm Beach County Homeless and Housing Alliance. 2015a. 2015 Homeless PIT Count News Release [downloadable PDF]. http://www.co.palmbeach.fl.us/communityservices/programs/humanservices/hha.htm. Last accessed 7/20/15. 19

Palm Beach County Homeless and Housing Alliance. 2015b. 2015 HUD Point-In-Time County WPB/PBC CoC [downloadable PDF]. http://www. co.palm-beach.fl.us/communityservices/programs/humanservices/hha.htm. Last accessed 7/20/15. 20

HUD. [Point-in-Time Count data, 2007-2014] https://www.hudexchange.info/resource/4074/2014-ahar-part-1-pit-estimates-of-homelessness/. Last accessed 12/19/14. 21

National Center for Homeless Education. 2012. Determining Eligibility for Rights and Services Under the McKinney-Vento Act. http://center.serve. org/nche/downloads/briefs/det_elig.pdf. Last accessed 12/19/14. 22

Florida Department of Education [FDOE]. [2013-14 data on student homelessness] http://www.fldoe.org/core/fileparse.php/7482/ urlt/1314HomelessStudentsCount.pdf. Last accessed 7/14/15. 23

FDOE. [2009-10 to 2012-13 data on student homelessness] http://www.fldoe.org/schools/family-community/activities-programs/homeless-eduprogram.stml. Last accessed 2/4/15. 24

Data on student homelessness was obtained from the following sources provided by the National Center for Homeless Education (http://center.serve. org/nche/) : 25

• National data for 2012-2013, Virginia data for 2009-10 and 2012-13: http://nchespp.serve.org/profile/National. Last accessed 7/21/15. • National data for 2009-10: http://center.serve.org/nche/pr/data_comp.php. Last accessed 7/21/15. 26

Florida Housing Coalition. 2015. Home Matters for Florida 2015. http://www.flhousing.org/?page_id=5915. Last accessed 7/14/15.

United Way of Florida. 2014. ALICE (Assed Limited, Income Constrained, Employed): Study of Financial Hardship. http://www.uwof.org/sites/uwof. org/files/14UW%20ALICE%20Report_FL_Lowres_12.17.14.pdf. Last accessed 7/1/15. 27



Florida Department of Economic Opportunity [DEO]. 2015. Occupational Employment Statistics and Wages (OES). http://www.floridajobs.org/ labor-market-information/data-center/statistical-programs/occupational-employment-statistics-and-wages. Last accessed 6/29/15. 29




CNT. 2015. [Housing + Transportation Index data]. http://htaindex.cnt.org/map/. Last accessed 7/30/15.

Personal communication from Suzanne Cabrera, President/CEO of Housing Leadership Council of Palm Beach County, and David Brandt, Executive Director of the Housing Finance Authority of Palm Beach County. October 2015. According to the American Community Survey, which samples “momand-pop” rentals as well as professionally managed properties, median gross rents in Palm Beach County rose sharply during the housing boom, declined during the Recession years, and had leveled off by 2014. However, median gross rents have exceeded affordable rents at the median renter income at least since 2005, and the gap has widened since then. 31

Reinhold P. Wolff Economic Research, Inc. 2015. Palm Beach County Quarterly Housing Report: Second Quarter, 2015. 18 p. Provided by the Housing Leadership Council of Palm Beach County. Data on average monthly rents and rental vacancy rates is provided graphically. Since tabular data was unavailable, we estimated values for each year from the graphs to the best of our ability. The report also does not clarify whether the average monthly rent data is adjusted for inflation, and David Brandt (see endnote 31) assumed it was not. 32


DEO 2015.

National Low Income Housing Coalition. 2015. [Out of Reach data for Florida] http://nlihc.org/oor/florida. Washington, DC: The author. Last accessed 6/30/15. 34

Roy, A.L. and Raver, C. 2014. Are All Risks Equal? Early Experiences of Poverty-Related Risk and Children’s Functioning. Journal of Family Psychology 28 (3): 391-400. 35

Newman, S.J. 2008. Does Housing Matter for Poor Families? A Critical Summary of Research and Issues Still to be Resolved. Journal of Policy Analysis and Management 27 (4): 895-925. 36


Evans, G.W. 2006. Child Development and the Physical Environment. Annual Review of Psychology 57: 423-451.


NLIHC. 2014. County Gap Analysis, Florida, 2007-2011. [Excel spreadsheet provided to Florida members]

MacArthur Foundation. 2014, June 3. “Housing Challenges Real For Many Americans, Finds 2014 How Housing Matters Survey.” http://www. macfound.org/press/press-releases/housing-challenges-real-many-americans-finds-2014-how-housing-matters-survey/. Last accessed 2/16/15. 39

Blomquist, D. 2015, July 8. “Potential buy-to-rent returns down from a year ago in 59 percent of U.S. counties for first five months of 2015.” RealtyTrac [news release]. http://www.realtytrac.com/news/home-prices-and-sales/realtytrac-buy-to-rent-housing-market-analysis-july-2015/. Last accessed 7/22/15. 40

Kroszner, R. 2009. The CRA and the Recent Mortgage Crisis. In: Federal Reserve Banks of Boston and San Francisco (eds). Revisiting the CRA: Perspectives on the Future of the Community Reinvestment Act. pp. 8-11. http://www.frbsf.org/community-development/files/cra_recent_mortgage_ crisis1.pdf. Last accessed 2/16/15. 41

Adelino, M., Schoar, A., and Severino, F. 2015. Changes in Buyer Composition and the Expansion of Credit During the Boom. [working paper] Cambridge, MA: National Bureau of Economic Research. http://www.nber.org/papers/w20848. Last accessed 2/16/15. 42

HUD. 2012. [FY 2013 Income Limits for West Palm Beach HUD Metro Fair Market Rent Area (HMFA)] http://www.huduser.org/portal/datasets/il/ il13/index.html. Last accessed 7/28/15. 43


Shimberg Center 2015a.


ACS. [2006 ACS, 2012 and 2013 1-year estimates]

Palm Beach County Building Division. 2015. [2014 Permit Reports] file:///C:/Users/Rose/Downloads/permit2014annual%20(1).pdf. Last accessed 7/23/15. 46

Hickey, R. 2013. After the Downturn: New Challenges and Opportunities for Inclusionary Housing. Washington, DC: Center for Housing Policy. http://www.nhc.org/media/files/InclusionaryReport201302.pdf. Last accessed 7/28/15. 47

Mukhija, V., Das, A., Regus, L., and Tsay, S.S. 2015. The Tradeoffs of Inclusionary Zoning: What Do We Know and What Do We Need to Know? Planning Practice & Research 30 (2): 222-235. 48

Schuetz, J., Meltzer, R., and Been, V. 2011. Silver Bullet or Trojan Horse? The Effects of Inclusionary Zoning on Local Housing Markets in the United States. Urban Studies 48 (2): 297-329. 49

Thaden, E. 2011. Stable Home Ownership in a Turbulent Economy: Delinquencies and Foreclosures Remain Low in Community Land Trusts [Working Paper]. Cambridge, MA: Lincoln Institute of Land Policy. http://www.lincolninst.edu/pubs/1936_Stable-Home-Ownership-in-a-Turbulent-Economy. Last accessed 7/29/15. 50

Sadowski Coalition 2015. Estimate based on Florida Senate’s proposed SHIP allocations as of 6/19/15, 2012 IMPLAN Sector multipliers, and data on 2010 Sadowski fund expenditures compiled by Dr. Alan Hodges (Extension Scientist, University of Florida). 51


Florida Housing Finance Corporation. [SHIP data provide on request in 2014 for FY 2011-12, and in 2013 for FY 2006-07 to FY 20010-11]

Florida Housing Finance Corporation. 2015. 2014 Annual Report. http://issuu.com/fhfc/docs/annual_report_6_29_15_final. Last accessed 7/16/15. 53

Shimberg Center. 2015b. [Assisted Housing Inventory data for Palm Beach County] http://flhousingdata.shimberg.ufl.edu/a/ahi_basic. Last accessed 7/16/15. 54



The Housing Leadership Council of Palm Beach County is a coalition of business, civic, and community leaders working to sustain the economic viability of the County by ensuring that housing is attainable for the workforce at all income levels through education, advocacy and facilitating collaboration

(561) 653-4107 www.hlcpbc.org

Affordable Housing is an Integral Part of Community Revitalization and Economic Development The Florida Housing Coalition, Inc., is a nonprofit, statewide membership organization which brings together housing advocates and resources so that all Floridians have a quality affordable home and suitable living environment.

FOR MORE INFORMATION, CONTACT: The Florida Housing Coalition 1367 E. Lafayette St., Ste. C Tallahassee, FL, 32301 (850) 878-4219 info@flhousing.org FLHousing.org

The Florida Housing Coalition and The Housing Leadership Council of Palm Beach County appreciate PNC for funding the Home Matters Report for Palm Beach County.

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