By: Christina Morrison Special to the Boca and Delray newspapers
Did you know that the median price of a single-family home in Palm Beach County is $340,000 – up by 7.9 percent this year alone? The median price of a townhome/condo unit in Palm Beach County is up by 9.4 percent this year, with median prices now at $175,000. If you own a home here, and bought it more than a few years ago, you should be feeling pretty smart – because you are! With less than 5 months of housing inventory currently available, it is truly a sellers’ market.
So if you own your home here already, you’re sitting pretty. But what if you are one of the thousands of people relocating here each year for a new job or a new venture or a new start, and have a salary of $56,000+/- (the County median) per year – where are you going to live? In a city like Delray Beach, which relies on the hospitality and tourist industries, where are all those service workers, employed by hospitals, schools, hotels, restaurants, Publix, Target, Atlantic Avenue shops, etc. – where are they going to live?
Rental housing is no better – rents in Palm Beach County now average around $2 per square foot. That equates to around $2,000 per month for a normal-size 2-bedroom apartment.
Before gas prices exceeded $2 per gallon, people would live further out, in St. Lucie County or western Broward or western Palm Beach County and commute in. With the price of gas, and people wanting a better Quality of Life than spending two hours a day commuting, this is no longer a viable option for many.
The result? In this land of riches we call Palm Beach County, to find housing that service workers – and other median income people – can afford is difficult at best.
As a Commercial Realtor who has helped relocate dozens of companies and employers to Palm Beach County, the first or second question I hear from almost every prospective corporate Tenant or Buyer is, “Where will my workers be able to live?” This is a real issue in our County and one not easily solved. Why?
- Land prices: With land in our City costing an average of $1 million per acre, it does not pay for builders to build homes that cost less than $350,000 to $400,000 – even in the western portions of the city and county. So lower-priced homes are not being built.
- Approval Timelines: With city/county offices now very busy, and processes added, the length of time it takes to get all of the approvals necessary to start building takes far longer than in past years. More time equals more costs added on to the price of the homes.
- Housing shortages: With the greater influx of buyers and renters, a housing shortage is forcing prices up. In addition, a housing shortage means less homes for sale since the potential sellers have fewer choices on where they can move in the area and what they can afford to buy.
So what can be done?
First of all, in order to solve an issue, the decision-makers need to agree there is an issue – and that is happening.
In Palm Beach County, the county staff and commission are working on proven solutions such as allowing higher density in areas close to mass-transit (like train stations and bus lines) and other areas that could eliminate some of the cars on the roads while providing convenient, well-planned communities. The County is also considering cutting the processing timelines for developments that offer affordable/attainable housing, thereby reducing the development costs for these homes which will be reflected in lower pricing.
In Delray, over a decade ago, the then-City Commission implemented one of the first Community Land Trusts in Florida. A Land Trust allows that some land that is city-owned, whether it be from non-utilization, foreclosures or other means of ownership, can be donated to the Land Trust that then holds the ownership of the land while allowing homes to be built on it. This type of development makes the homes more affordable since the land costs are not part of the home’s development costs. It also cuts down on the amount of real estate taxes charged to the homeowner, since the land is not taxed – only the home. Many of the neighborhoods in the NW-SW areas of our City were built with the Land Trust.
Having an affordable way to rehabilitate older homes in older neighborhoods is another avenue to create affordable housing. The County is working on ways to possibly provide this and CRAs in several cities are also looking at this method to improve aged neighborhoods and revive the housing stock.
“Change of Use” is another method for creating affordable/attainable housing. Old shopping centers, including some malls, are now being updated to include housing that is both more affordable and conveniently located.
Remember, affordable and attainable housing is for people who work in our communities, provide services to our residents and visitors, and who need to live in close proximity to where they work rather than spending hours a day, usually in a car, commuting. If there is no housing available for these workers in our City and County, the result will eventually be less workers coming here to work – not a positive step forward…
And what’s the second question heard most often from potential corporate buyers and tenants looking to move their companies here? You probably already know: “Where will my children get a good education here?”