Thursday, November 17, 2005

The Cost of Affordability

We learned in the Pelican Press that the city is fast tracking a proposal to get "attainable housing" in downtown Sarasota. The proposal is to quadruple density (from the current 50 units per acre to 200 units per acre), in return for "attainable" housing.

While this getting more affordable housing is laudable, like everything the devil is in the details.

A meeting of the Alta Vista neighborhood association tonight showed little support and brought out lots of questions about a last minute decision to include two current proposed developments in their neighborhood into this density plan. Quadrupling the density in this area (Ringling Plaza and former Scotty's site) could bring an additional 2000+ new housing units to a neighborhood that currently has 500 homes.

In the case of the Alta Vista neighborhood, what is the reasoning behind changing the land use to City Center? While it gives the developer a bonus in land value, what do the city and neighborhood get in return? Can the city infrastructure support such uses in this neighborhood?

The Pelican article said: "The last two properties were added to the proposal the morning after the commisison meeting, after the mayor and city manager met with the city’s planning staff."

Fast tracking a major change like this with little public input may not be a wise approach.

The Palm Beach Post editorializes on the problem:

The county has just awakened to the fact that voluntary efforts to persuade builders to erect affordable homes do not work. As housing prices outpace earnings and more workers move to the Treasure Coast, where rising prices are creating similar pressures, Palm Beach County devoted half of a two-day economic summit to housing.

Meanwhile, for three decades, affordable homes have been required as part of even the ritziest housing developments in Montgomery County, Md.

In the Washington, D.C., suburb, a single parent earning $40,000 a year can afford a new home. In exchange for setting aside 15 percent of new homes as affordable, builders get to build 22 percent more homes. The idea is that added density will produce profits to cover lower-priced housing.

The other idea is that affordable housing doesn't destroy property values. Since 1974, Montgomery County has produced nearly 12,000 affordable homes, about 7 percent of the county's housing stock.

That's just one model commissioners can consider. They will face the typical hurdles from builders who, even in the face of incontrovertible evidence, pledge to resist mandatory programs.

Note the math in the Maryland example, 15% affordable homes gets the developer 22% increase in density. The proposal here is for a 400% increase in density. What will the community get in return? Will it be the same 15% affordable homes? This seems like quite a deal for the developers.

1 comment:

Anonymous said...

Your comment is not making a lot sense. If you consider a condo to be affordable at $300,000, you have to remember that this 5 to 8 times less than what you would sell them following supply and demand.

This is why Sarasota needs at least a 400% bonus to make affordable housing economically feasible for developers.

Hopefully, everybody understands the concept. As a developer I can assure you that we are not evil and our numbers must work.

Sarasota is becoming a larger city. St Pete or Tampa allow 300 units and more per acre in their downtown.