From Tallahassee Democrat
Industry experts at this week’s 2022 Prosperity Forum cautioned the business community about Tallahassee’s high-cost housing market and the dangers ahead if more isn’t done to address it.
The forum sponsored by the Tallahassee Chamber of Commerce shined a light on Tallahassee’s affordable housing crisis and how it’s impacting renters, property owners and home buyers.
For example, the average rent for a two-bedroom, two-bathroom apartment in northeast Tallahassee cost $2,250 per month; $1,912 per month in northwest Tallahassee; $1,625 per month in southeast Tallahassee, $1,450 per month in southwest Tallahassee.
Census data shows Tallahassee median income from 2016 to 2020 to be about $46,460. With a 25.2% poverty rate, one in four residents are living in poverty.
“The data right now really tells us a very important story about the crisis that we’re in,” said Sha’Ron James, a government affairs consultant and attorney at Gunster law firm, who chairs the Chamber’s Community and Prosperity Committee.
Another issue: Landlords opting not to rent properties to tenants and instead turn them into Airbnb rentals.
Numerous landlords allowed tenants to live rent free or were prohibited from evicting them during the height of the COVID-19 pandemic, said Christic Henry, managing broker and Realtor at Kingdom First Realty in Tallahassee.
“That’s your real competition for affordable housing and economic opportunity,” Henry said. “These people are trying to pay their mortgage, and it’s a real conversation.”
A ‘crazy’ market with little relief in sight for buyers
For home buyers, the northeast continues to be a real estate hot spot.
Although, southeast subdivisions like Wilson Green and Crawfordville Trace are seeing noticeable resale fluctuations, Henry said.
Tallahassee’s affordable housing problem comes down to a lack of inventory to meet high demand.
The trend, with little relief in sight, will only continue as Leon County’s population growth is projected to increase, Henry said.
In general, she said this environment is producing listings that hit the market already under contract. Or property owners getting knocks on their door from eager buyers, hoping for a real estate score.
“It’s that crazy,” Henry said.
A goal to relieve the ‘cost-burdened’
Forum speakers and others stressed the need for more jobs in Tallahassee that produce a living wage for residents to afford rent or purchase a home.
Berneice Cox, president and CEO of the United Way of the Big Bend, said a home for $200,000 is considered to be affordable, but many local residents can’t afford it.
More community partners and collaboration, she said, will help chip away at the housing crisis.
“If you have in the room bankers who can actually lend the money, you have developers, you have landlords and you have nonprofits, you have an opportunity for some good discussions,” Cox said. “More importantly, what are the action items after the discussion.”
Ashon Nesbitt, chief programs officer at the Florida Housing Coalition, said the Florida Chamber of Commerce has a housing goal in its 2030 Florida Blueprint plan to reduce cost-burdened households to no more than 10% by 2030.
Cost-burdended refers to a household that pays more than 30% of its income toward housing costs, including utilities. Severely cost-burdened applies to a household with more than 50% of its income towards housing costs.
The primary causes for cost-burdened housing expenses includes a lack of living wages and rising housing costs. Renters and residents earning 50% AMI (Area Median Income) or less are most impacted.
A potential solution: Opportunity Zones
Nesbitt said the business community and leaders can change the course of Tallahassee’s housing crisis.
He offered approaches to consider that began with understanding the housing needs of a business’ workforce. Other options to consider included matching workforce training with housing, employer assisted housing programs, matched savings and purchase assistance and rental deposits.
Opportunity Zones, the federal version of Community Redevelopment Agency districts, may also offer an attractive investment lure for those with capital gains looking to purchase, develop and redevelop properties that could be transformed into affordable housing.
In 2020, Gov. Ron DeSantis signed into law House Bill 1339 that allows lots or property tagged for commercial, industrial or residential zoning to be used for affordable housing.
This is a potential game changer in the creation of more affordable housing, Nesbit explained.
For example, someone realizing a capital gain from the sale of real estate can take that gain, invest it into an Opportunity Zone fund and not have to pay taxes on that gain for 10 years.
“So, this is a good opportunity for those of us that have done well to invest and give back to our community,” he said.