Attainable Housing

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If you read this article, I am going to tell you why Workforce Housing does not work in today's economic environment on or off Fort Myers Beach and how Affordable Housing could.  I'll also describe the differences between the two.

In 2017, I served on an advisory committee with the Lee County School District, just months after an internal investigative report called BlackBelt 2020 was wrapped up.  The reason for the research was to identify the cause of a historically bad teacher turnover rate.  At the time, the school district was losing 25% of it's teachers over several consecutive years, which actually got worse toward 2023.  The most compelling response from the teachers was "housing affordability."  In short, this is the #1 reason why the Lee County School District has floundered in ratings over the past 15-20 years.  Don't let anyone tell you differently.

You would think that the Lee County Public entities would consider public/private partnerships in attainable housing developments that could benefit the people they employ, right?  Despite numerous attempts by the private sector, the Lee County School District failed its own during those years by failing to take realistic solutions seriously when the lending environments were great.  Just google "Scott Allan School District Housing" and you will read about a proposed public / private partnership that won unanimous board approval to proceed.  It was squashed for reasons I won't get into because it's political and if you want to talk politics, come to the mancaves one night!  

The School District's inactions were just one of the reasons I became a vocal advocate for change in their Board of Directors.  We'll see if the new elected officials of the school board take this seriously or not.  So far, I have seen nothing from them on this.  So here we are today in 2023 and the issue of attainable housing has snowballed and is probably the #1 issue behind the rebuilding efforts to bring Fort Myers Beach back to life.  

The gentrification of the beach has gone from a 35 year plan to a 3-5 year plan following Hurricane Ian.  We better figure out what we are going to do to make housing affordable to the employees who will be cooking your food, making your drinks, cleaning your streets, making your bed, protecting your families, putting out fires, teaching your kids, and the list goes on.  

So let's get down to the conversation that has everyone either entirely confused or for those people who think they are professional affordable housing developers because they read an article in the paper.

Workforce Housing was originally designed to promote housing affordability to professions such as first responders, retail clerks, and everyone else I mentioned in the previous paragraph.  There have been literally no known grants or subsidies for Workforce Housing until Governor Ron DeSantis signed the Senate Bill (SB) 102 into affect.  Also known as the Live Local Act, it represents the largest investment for housing efforts in the states history.  The bill invests $711 million spread across multiple programs.  

Workforce Housing is predicated on the area's median income (AMI), which today is $85,900.  Under Workforce Housing, a household qualifies if their income is between 80 and 140% of the AMI.  I won't bore you with trying to explain how it works so I'll give you an example.  

If you are a single mom earning the lowest level 80% AMI, your income would need to be no less than $47,680 on your tax return.  If you can find a housing complex that offers Workforce Housing, single mom's rent on a 2-bedroom apartment would be $1,532 per month.  This calculates to 39% of her annual income that would go toward rent.  Then utilities.  Anything over 30% income/housing ratio is considered "rent burdened" by HUD standards, so in this situation, single mom is rent-burdened.  

Let's ask ourselves who the employees will be on the beach.  Let's assume my single mom example is a bartender at Margaritaville who is likely going to be paid minimum wage at $12/hour, relying on tips to earn a living.  Bartenders rarely report tips to the IRS, so bartending single mom is likely to show far less than $47,680 (the lowest tier for workforce housing), eliminating her from Workforce Housing units;  Statistically, bartenders earn $15/hour or $31,500 per year on the books.  Someone please point to an employment sector on the beach that earns and documents the minimum Workforce Housing income limit ($47,680).  Shut up, realtors.  :-) 

Now roll in the worst lending environment we've seen in nearly 20 years and construction costs which have gone up nearly 40% since Covid-2020.  Workforce Housing is dead on arrival on and off the beach.  Not even if the land was donated for free could you make it work today.  Don't forget the flood zone.  You'll have to elevate the building on a parking garage at roughly $25,000 per parking space to build.  Does all this even matter?  Who will workforce housing cater to on the beach?  Practically nobody that needs it most.

Affordable Housing is different and actually CAN benefit from SB-102 as a supplemental subsidy.  Affordable Housing is built with financial subsidy from federal, state, and local government.  Where Workforce Housing subsidy only exists if the state or local government decides, affordable housing has available programs offered from the federal government utilizing taxpayer money to form funds designed to subsidize housing development.  

Workforce Housing is designed to benefit those in the 80-120% AMI, where Affordable Housing is designed to benefit those earning AT OR LESS than 80% AMI.  In today's economy where wages can't keep up with inflation, now we are talking about teachers, firefighters, etc, etc.  Remember the purpose of Workforce Housing?  It's now the purpose of Affordable Housing because Workforce Housing doesn't work in 90% of scenarios across the nation today.  And I just made up 90%.  I bet it is closer to 100% then it is 90%.  

So, let's get back to single mom again.  Assuming her income is reported as $31,500, she can rent a 2-bed, 2-bath apartment for $787 per month under Affordable housing guidelines.  This also includes a $100 per month utility allowance.  The remainder of her income can be budgeted for life needs, her children, savings, and so much more that almost nobody in the hospitality and service industry on the beach can currently budget for. 

Imagine how life changes for everyone on the beach if attainable housing is available to those who serve you.  Imagine the potential for all of the future resorts.  Today, most of our area's employees that fall under the 80% AMI threshold are literally a medical emergency or a blown transmission away from a life-altering financial crisis.  Imagine the pride of employment and housing with someone who is able to live and serve in the community they love within their means.  For many, that does not exist.  

If we want to make Fort Myers Beach great again, we need housing solutions from the affordable housing sector, not workforce housing.  I respect the Pastor at the Baptist Church but I think he is overwhelmed and uneducated in workforce housing and probably gets talking points from a very small resource of information, because there aren't many case studies for it to work.  Workforce Housing will not work and I will double triple down on that.  The loopholes in the program are a story for another time.  Commissioner Ruane is the smartest local politician we have.  He knows this and he is involved in numerous discussions and I can bet my piggy bank with you that he knows Workforce Housing cannot work.  He isn't a land broker.  When we find land, he will be the first to help the project find the resources to apply for.  I guarantee it.

Land:  You need lots, like 5-10 acres minimum.  You need economies of scale.  Guess who owns a lot of surplus land?  The School District and they have sat on their asses for a decade knowing they have a problem with teacher retention due to a lack of affordable housing and have ignored private sector partnerships to build something spectacular.  This was one of the main reasons I became a vocal advocate for a change in their Board of Directors.  So far, I've heard nothing on housing solutions from the new board, but that doesn't mean they aren't thinking.  Don't know. 

Oh!  A FMB resident owns 15 acres just over the Matanzas Bridge and is zoned for multi-family.  Imagine the hero he would be by being a non-managerial partner to an affordable housing developer?  Housing needs land and 2-3 acres won't cut it.  We need 5-10 acres because with cost of construction, flood zone construction requirements, you need economies of scale even with the subsidies.  I see people saying "Get Torgerson to do it!"  Torgerson doesn't have a 3D printer to create more land, so look at those who own the land first.  I just gave you two owners.  Developers will do a lot for charity, however donating enough to a project to lower rents to affordable housing standards would bankrupt the business they donate from.

Let me be clear.  If you thought the Covid restrictions were bad due to understaffing and you had to wait 3 hours for a table at Nellies and The Whale, wait until the beach is revitalized in 3-5-7 years.  Pick any number.  If we don't produce housing for those who will serve us in one of the state's biggest hospitality markets, wait until you see that shit storm of residents and developers screaming because we weren't proactive enough.  Then watch who we have left flee the state for greener pasture where they can afford to raise a family.  It's time for tough talks, and it ain't Workforce Housing.  

Thanks for reading.

Sincerely and Massive FMB Optimist:

Scott Allan

Allan Development Group