1. – Workforce/Affordable Housing – Study for the City of Coral Gables Robert W. Burchell, Ph.D. William R. Dolphin, M.A. Chaolun Zhu, M.C.R.P. Rutgers University, Center for Urban Policy Research New Brunswick, N. J. 08901 24 January 2006

2. 2 Workforce/Affordable Housing n Goals of the Methodology Simplicity of method Recognize state/regional affordable housing goals Consistency with accepted housing practice Up-to-date with most recent U.S. Census Procedures support efficient and well-planned growth Procedures do not cause community significant fiscal strain Procedures allow sufficient time for planning Procedures apprise and inform regional agencies of local affordable housing efforts

3. 3 Why Do Workforce/Affordable Housing? n The workforce and elderly need affordable housing Most housing is built for those > 120% median n Workforce/affordable housing has been successful: good properties, no impact; balanced communities n Good for economy – produces jobs Promotes steadying effect on local labor force n Citizens want it; can’t be produced by private market n Required as part of: Florida’s Growth Management Act Florida Statutes Chapter 163(6)(f) Coral Gables Comphrensive Plan – Housing Element State Housing Initiative Program (SHIP) – Housing Assessment Plan (HAP)

4. 4 Who Is Workforce/Affordable Housing For and How Long Should It Last? n For current/future workers and residents of the City of Coral Gables n For both family and elderly households. Elderly demand is a large component of total demand n Both ownership (condominium) and rental units need to be provided. Rental units should be a significant percentage of those provided n Units should be deed-restricted for an extensive period – 99 years or in perpetuity n Encourage an holistic approach to workforce/ affordable housing solutions

5. 5 A.Preliminary Definitions nWorkforce/Affordable Housing Populations Moderate, low- and very-low-income households defined by HUD Section 8 income procedures. Moderate = 80 – 120% of regional median household income Low = 50 – 80 % of regional median household income Very Low = Below 50 % of regional median household income nHousing Area The City of Coral Gables nMedian Household Income – $77,583 (2005)

6. 6 1.Future Cost-Burdened Workforce/Affordable Housing Need (2005 – 2015) – Demand nType of Housing Demand A projection of income-eligible (<120% of median household income) households into the future. Projection period 2005-2015. Calculate the share that will be cost- burdened at 50% of their income for housing. nProcedure Use Florida Bureau of Economic and Business Research (BEBR) population projections and convert population projections to households. nResults – Coral Gables’ Growth Efforts Total Future Income-Eligible Cost-Burdened Households Households Households 1,132 562 186

7. 7 2.Current Rehabilitation Workforce/Affordable Housing Need (2005) – Demand nType of Housing Demand Those defined by income limitations as requiring housing because they live in deteriorated or overcrowded housing. nProcedure Three nonoverlapping indices at the municipal level (crowding, incomplete/lack exclusive use of plumbing, and incomplete/lack of exclusive use of kitchen facilities). This is combined with age of unit. Two deficiencies 1940 or newer; one deficiency 1939 or older. nResults– Coral Gables’ Deteriorated Housing Efforts Total Housing Units Total Deteriorated Income-Eligible Deteriorated 17,166 127 (0.74%) 113 (0.66%)

8. 8 3.Current Preservation Workforce/Affordable Housing Need (2005) – Demand nType of Housing Demand Those defined by income limitations already housed within a locally subsidized unit. Units likely to be lost in the future. nProcedure Finding developments whose mortgages or subsidies are expiring and convincing owners or subsidy sources to extend the commitment. nResults – Coral Gables’ Preservation Efforts Coral Gables has no existing subsidized affordable housing units. The City should pursue property donations and foreclosures as future affordable housing opportunities. 2005-2015 50 units from such sources

9. 9 4. Backlog Cost-Burdened Workforce/Affordable Housing Need (2005) – Demand nType of Housing Demand Those defined by income limitations as requiring housing because they currently can’t afford their housing. nProcedure Isolating those moderate, low-, and very-low-income households that currently pay more than 50 percent of their income for housing. nResults – Coral Gables’ Backlog Efforts Total Cost-Burdened Need to Be Met (10 Years) Households (@5% of Total Need) 2,111 106

10. 10 5.Future Cost-Burdened Workforce/Affordable Housing Need (2005 – 2015) – Supply nFunding A housing source to provide new affordable housing where residential and nonresidential construction takes place. nFunding Source Inclusionary on future residential and nonresidential development: 2/3 residential; 1/3 nonresidential. Total Units Market Divided Total Employment Minus Affordable by Residential Divided by Nonresidential 1,132 – 186 946 ¸ 118 1,630 ¸ 68= 24 Creates Residential Ratio Creates Nonresidential Ratio 1 Affordable for 8 Market 1 Affordable for 24 Jobs or 8,000 ft. 2 nLinkage New market housing and nonresidential growth creates demand for low/mod housing. A share of growth should be affordable housing to new and existing local workers.

11. 11 6.Current Rehabilitation Workforce/Affordable Housing Need (2005) – Supply n Funding An income source to provide subsidies to landlords/owners to repair deteriorated housing. Matching grant of 75%/25% of rehabilitation costs. n Funding Source An increase (10%) of non-new construction residential building permit fees dedicated to a rehabilitation workforce/affordable housing matching grant fund. n Linkage A small increase in residential building permit fees for the market-rate population should be used to subsidize those who cannot afford to make repairs to their housing units.

12. 12 7. Current Preservation Workforce/Affordable Housing nFunding A mechanism to garner affordable housing from the existing stock of residential and nonresidential structures. These structures would then be preserved for long periods of time. nFunding Source Foreclosures, gifts of property, condemnations or conversions of structures that would lend themselves to new affordable housing opportunities. nLinkage – Currently there are no preserved affordable housing units in Coral Gables. The City occasionally forecloses, gets gifts of properties, or could support structure conversion for affordable housing purposes.

13. 13 8. Backlog Cost-Burdened Workforce/Affordable Housing Need (2005) – Supply nFunding An income source to provide a fund to buy down to affordable the cost of existing housing. Buy-down amount equals the difference between the price of housing and what those who cannot afford can pay. For households who pay more than 50 percent of income for housing. nFunding Source Equitable return of a portion ($.20 per $100 of transferred value) of local real property transfer tax that currently supports affordable housing. nLinkage – Property transfers heat up the local housing market: a portion of the real estate transfer tax should fund cost-burdened affordable housing need. Only 5% of backlog can be managed during a ten-year period.

14. 14 Summary n Addressing Workforce/Affordable Housing Need in Coral Gables Workforce/Affordable Housing Need UnitsStrategy Future Cost-Burdened Need186Inclusionary Housing Rehabilitation113Building Permit Fees Preservation50Gifts/Foreclosures Backlog Cost-Burdened106R.E. Transfer Tax Total45545 Units per Year

15. 15 Conclusions n Affordable housing in Florida will become more of an issue as baby-boomers retire nationally (2010-2030). n This will be most pronounced for in-state residents. n South Florida, due to its growth, could produce more affordable housing through land-use policies than most other states – approximately 20% of all market housing from 2005 to 2015 (including residential and nonresidential components). n Affordable housing should routinely accompany market-level residential and nonresidential development in the State’s municipalities/counties and be reserved for longer-term, in-state residents.