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Even for those willing to build affordable housing, road blocks await

Home builders find it’s not so easy to build low-cost housing.
(From left) Geoff Wood, land owner Roberto Nunez and home builder Jim Reynolds pose for a photo on Nunez's five-acre property close to Hillsborough County's Lake Magdalene. Reynolds wants to help the county's affordable housing crisis by building 19 low-cost homes. But they have been frustrated by  regulations and conflicting advice on how to get approval from the county. [OCTAVIO JONES  |  Times]
(From left) Geoff Wood, land owner Roberto Nunez and home builder Jim Reynolds pose for a photo on Nunez's five-acre property close to Hillsborough County's Lake Magdalene. Reynolds wants to help the county's affordable housing crisis by building 19 low-cost homes. But they have been frustrated by regulations and conflicting advice on how to get approval from the county. [OCTAVIO JONES | Times]
Published Oct. 5
Updated Oct. 5

TAMPA — Home builder Jim Reynolds had heard plenty about Tampa Bay’s affordable housing crisis when he decided his next project would be low-cost homes.

He had the land, an almost five-acre site on North Boulevard close to Lake Magdalene. For the project to work financially, he would need permission to build more than the six or seven homes allowed under its current zoning.

Hillsborough County officials told him he would be able to build up to 19 homes, providing at least 20 percent of them were sold to low-income families.

But the venture has stalled over the last six months. His firm, Homes Plus Enterprises, has struggled to navigate unfamiliar land regulations. They say county planners wrongly told them they would have to partner with a non-profit group to identify needy families.

“We just need to see what the next step should be,” said a frustrated Reynolds.

The confusing mix of federal and local rules are familiar to those who work in the affordable housing arena. But they can deter developers willing to build something other than market-priced homes, said Mike Morina, the executive director of Florida Home Partnerships, a non-profit group that builds affordable housing around Ruskin.

Then there’s the additional complication of making sure buyers qualify based on their income, dealing with people with poor credit scores and seeking out grants and programs that can offer down-payment assistance. And larger low-cost housing projects are often the target of not-in-my-back-yard protests from neighbors unhappy they may be living closer to poorer people.

“If you’re just a person who wants to do something good, it can be soul-sucking,” Morina said. “It’s just very hard under any condition even if you know how to do it."

Morina’s group builds up to 60 homes a year for families who make 80 percent or less of Tampa Bay’s median income. Funding comes from a U.S. Department of Agriculture program that subsidizes housing in rural areas.

There was more interest in building low-cost housing after Florida created the Sadowski Affordable Housing Trust, funded through a surcharge on real estate deals, Morina said. But state lawmakers since 2001 have siphoned more than $2 billion from the trust fund into general revenue.

Related: RELATED STORY: Gov. Ron DeSantis should end the raids on Florida's affordable housing trust fund

“There’s a lot of folks who need housing, there’s not enough money and the government doesn’t have a perfect system for parceling the money out,” Morina said.

The cost of construction compared to income remains the biggest barrier to building more affordable housing, said Jennifer Motsinger, executive vice president of the Tampa Bay Builders Association.

A recent United Way study found a median average household income of $54,000 in Hillsborough and $50,000 in Pinellas. That would support a mortgage of about $225,000, she said, a price that is unworkable for builders based on labor, materials and regulatory costs.

“People have this misconception that for-profit builders want to build high-end homes,” she said. “They want to build to the market to meet demand.”

Rendering of Avery Commons, a $15 million affordable housing development by Blue Sky Communities that will be subsidized by the city of St. Petersburg and the sale of tax credits. [Architectonics Studios]

Invariably, developers are forced to work with non-profit groups who can obtain additional government funding such as tax credits.

Domain Homes has partnered with the non-profit groups Habitat for Humanity of Hillsborough County and CDC of Tampa. They plan to build up to 75 homes throughout East Tampa, one of Hillsborough’s poorest neighborhoods.

Domain Chief Operating Officer Kevin Robles said the involvement of non-profit groups is vital to provide housing for the area’s lowest-income families.

The economics of home building work against affordable housing. While there are some incentives, costs like permits are the same — about $13,000 in Tampa — no matter the price of the home, Robles said. And low-cost housing is most needed in urban areas, where land is most expensive.

“To produce the most inexpensive house you can, you’re starting with the most expensive element: that’s the lot of land itself,” he said.

Related: RELATED STORY: Hillsborough County to spend $10 million a year on affordable housing

Ernest Coney, the president and CEO of CDC of Tampa, said local house prices have outstripped the borrowing ability of most families because they are being bought by investors cashing in on rising rents and by people moving here from other parts of the United States.

“They sell their home for $800,000 and purchase homes here,” he said. "Folks who are only making $8 or $10 an hour, it’s getting more and more difficult to find a house that a paycheck can support.”

Reynolds, the owner of Homes Plus, still hopes his project can happen. His plan is to build 1,200 square-foot homes for as low as $160,000, a price that is well below the price of housing in the surrounding neighborhood.

Considered workforce housing, it would be aimed at young families who earn just below and just above the region’s median income, a bracket that typically includes people starting out as teachers and firefighters.

Cheryl Howell, the director of Hillsborough County’s Affordable Housing Services, said her department wants to work with Reynolds to make the project happen. Her office helped more than 200 lower-income families buy their home through a down-payment assistance program over a 12-month period through July.

“If there’s a way for him to benefit themselves and the public, we want to be there to guide him through it,” Howell said.

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