Florida's affordable housing crisis: The fix and the flaws part 3 of 4

TAMPA - Taxpayers are subsidizing the construction of new apartments that could charge as much as (or possibly more than) what many already cost—while prices are already unaffordable for many teachers, firefighters, nurses and others.

Many who can't afford to buy a home in the Tampa Bay area may wish they were in Jennifer Peters’ position.

"Moving out of Jacksonville, I was able to sell my home and make a pretty decent profit off of my house," she said. "I made about $90,000 from the sale of my home in Jacksonville. I had a paid off vehicle. My debt-to-income ratio was extremely low with no credit card debt."

She also has a full-time professional job, master's degree and an excellent credit score of 750. You may expect her to have no problem getting approved to buy a new home. But many who may wish to be in Jennifer Peters’ position may be surprised by the challenges she’s faced in finding an affordable home.

"I was just denied (by mortgage brokers), and they said, sorry, we can't find a bank that will approve your loan," she said.

The obstacle was her job. Jennifer Peters is a Florida teacher, and lenders frowned on her salary as a full-time teacher relative to the rising cost of living in Florida.

"So, it's just very disheartening that I can't seem to make a survivable income in Florida," said Peters.

READ MORE: Florida's affordable housing crisis: The missing middle part 4 of 4

She also tried renting an apartment, first looking for a home near an A-rated school for her children. Apartments in those areas were in short supply, and she was again repeatedly denied.

"And every time I was being shut down because they expect you to make three times the rent for your salary, your monthly salary," she said. "I asked to even pay a year in advance for some rentals just because I had the savings to do so. And I was told no."

She eventually got a relative to co-sign on a mortgage. That's how she finally found a home she could afford at $2,100 a month (and by afford, she means scrape by with tutoring and administrative side jobs on top of teaching).

"So, I'm probably putting in 60 to 70 hours a week," she noted. "And it doesn't make sense for teachers to continue to teach when they can't afford to live here."

This is the crisis state lawmakers are trying to solve with a new approach called the Live Local Act, passed in 2023. However, in its current form, it does not appear to help many working professionals like Jennifer. 

It commits $252 million to the SHIP program which is geared toward helping people who can't work or earn low incomes by government definition. That can help a lot of people, especially since the legislature took more than $2 billion out of that same fund in prior years. But it's still a fraction of what lawmakers took from that fund through the years, and it does not help Jennifer and others who make too much to qualify for this type of help, and too little to find a home on their own.

Another component of the Live Local Act offers $100 million on down payment assistance. First-time home buyers who make no more than 150% of their area median income can get up to $35,000 toward a down payment. But remember, Jennifer had much more than that for a down payment, and still couldn't buy—leaving people with higher incomes more likely to get that help.

By setting the limit at 150% of median income, it means people who make more than $150,000 a year could qualify for the down payment subsidies-- while taxpayers like Jennifer could wind up paying for it.

"So, a working class, single mother in Riverview is going to Walmart to buy something for her kids, and she is paying a sales tax to potentially subsidize someone who might be making 3 or 4 times the amount of money," said Republican State Representative Mike Beltran who opposed the Live Local Act. "And you certainly shouldn't be getting a government subsidy if you're making in the six figures—a government subsidy that's means tested. It makes absolutely no sense.

READ MORE: Florida's affordable housing crisis: proposed solutions

Another key element of the Live Local Act intends to expand the supply of affordable housing. It offers subsidies and property tax breaks to developers, if their apartment buildings set aside a certain number of units for affordable housing.

However, the definition of what’s affordable under this state law allows participating developers to charge what many working-class Floridians do not consider to be affordable.

The federal government does an annual survey on how much people make, which determines the area median income (AMI) for each county. The state then calculates 120% of AMI to determine rent limits.

For much of Tampa Bay, 120% of AMI takes us into six-figures-- and up to a third of that is considered affordable rent. 

In Pinellas, Hillsborough and much of Florida, it comes out to a limit of more than $2,100 for a one-bedroom apartment and $2,500 for a two-bedroom apartment.

Developers could charge less, but Pinellas County's principal planner Jared Austin says that's not usually how it goes.

"A developer is going to go for the maximum that they can charge. That's just the way the market works," said Austin.

$2,500 for a two-bedroom apartment is comparable to (or more than) numerous listings on popular home rental sites.

"That's correct," said former Florida State Senator and President of Florida Policy Project Jeff Brandes. "So, 120% is basically market rate. And therein lies some of the complaints about the live Local Act is that we're giving breaks to essentially market rate developers."

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