Palm Beach County has never been reluctant to spend large sums of taxpayer money to tackle huge issues.
Voters approved $100 million bonds twice in the 1990s, once to buy environmentally sensitive land and a second time to buy south county farmland.
Without voter approval, county commissioners shelled out $269 million in 2006 to land The Scripps Research Institute and $87 million more to bring Germany’s Max Planck Florida Institute for Neuroscience to Jupiter.
But borrowing $350 million in one fell swoop? That’s what commissioners will contemplate at a 9:30 a.m. March 29 workshop.
As some of its past debt comes off the books, commissioners will be asked to borrow $200 million to build affordable workforce housing and, in a separate request, $150 million for environmental and water resource projects.
The source to repay the money almost certainly would be property taxes with the possibility of a voter referendum in November.
Commissioners also have talked about tapping sales taxes to raise an additional $270 million a year for transportation projects. That decision, which would require voter approval, is still two years off.
And the Palm Beach County School District will be asking voters in November to continue a property tax rate hike to raise $240 million a year. County commissioners must agree to place that question on the ballot.
20,000 homes over 10 years
In a detailed report following years of study, the Housing Leadership Council of Palm Beach County spells out the need for $200 million to leverage hundreds of millions more to provide 20,000 affordable homes and apartments over 10 years.
The approach, first suggested two years ago by Commissioner Mack Bernard, is to eliminate a gap of roughly 2,000 units per year.
With housing costs skyrocketing, the timing couldn’t be better.
“With the situation, how dire it is … I believe our voters would support creating an additional 20,000 units in the county,” Bernard said. “We have to really find a way to take matters into our own hands.”
A second pitch, backed by Commissioner Dave Kerner and promoted by a not-for-profit group headed by former Commissioner Karen Marcus, seeks $150 million to buy land and pay for projects to ensure future water resources.
The proposal is centered on a $216 million menu, including $50 million for water storage in the Palm Beach Aggregates rock pits off Southern Boulevard, $40 million for water storage in the western L-8 Canal basin and $30 million for septic-to-sewage conversion.
The discussion of transportation dollars is not on the workshop agenda and is unlikely to be scheduled for a public consideration before 2024.
Must increase density
The issue most likely to grab popular public support is housing.
The coalition, a 2006 not-for-profit spinoff from the Economic Council of Palm Beach County, proposes that a minimum of 50 percent of the bond proceeds go toward financing rental housing and at least 25 percent go toward homeownership. The bond money would be loaned, not granted, and it would go to developers, not homeowners or renters.
“The goal is to leverage as much as we can,” said Skip Miller, a GreenspoonMarder attorney and chairman of the housing steering committee that prepared the report, called “Housing for All: Palm Beach County’s Housing Action Plan.”
As rising prices and fierce competition for new and used homes drive a rapid rise in prices, the Housing Leadership Council proposes not just a capital infusion but a shift in thinking.
“To build economic resiliency and sustain the county’s strong economic growth, the county and its municipalities must offer a range of affordable housing options,” says a draft of the report approved March 9. “This will require leaders to learn the root causes that created these gaps, then focusing resources on narrowing the gaps.”
And that means taking unpopular stands.
“The objectives of any planning and regulatory reform should be to increase residential production by increasing density and expanding the developable footprint,” the report says.
“The first and foremost objective of any planning and regulatory reform is to increase residential density,” the report says. “In a county in which there is an increasingly finite supply of vacant land, local governments must make more effective use of land.”
At the same time, the report recommends expanding the areas where housing can be built through rezoning, turning surplus vacant land over to builders and allowing accessory “granny flats” that don’t count toward density caps.
And it urges local governments to speed up development approvals, even if it means turning planning review over to the private sector.
That’s a tough sell when proposals to develop abandoned golf courses or convert commercial zoning to apartments face heated opposition from neighbors.
“We all know allowing increased density is difficult,” Miller said at a February council meeting with more than 50 participants on Zoom. “We’ve got to find a way to get over that hurdle.”
FIU documented the housing gap
The report comes a year after the council commissioned Florida International University to document the housing affordability crisis.
Even before the recent housing price boom, FIU found that 30 percent of county renters are “severely” cost-burdened, paying more than 50 percent of their income on monthly housing costs. With a median home price of $418,000 (now hitting $525,000), FIU found home ownership unattainable for 81 percent of county households.
It calculated an average supply/demand gap of 2,732 housing units during the 10 years ending in 2019, when 4,726 homes were built despite a demand for 7,184.
“There’s two groups we’re looking at,” Miller said. “Prospective employers — If their employees can’t afford to live here they’re not going to relocate here. (And) people seeing rents escalate and can’t buy a house. We need to increase the supply to the point where we start bringing the cost down a little bit.”
The Housing Leadership Council report does not spell out exactly where workforce and affordable housing should be built, but it offers a lengthy section on revitalizing disadvantaged communities.
“A major priority will be increasing the supply of new housing in targeted neighborhoods,” the report says. “This will involve securing vacant land, as well as creating vacant land by clearing abandoned and dilapidated housing to provide the land required to increase production of new single-family housing, as well as small-scale duplexes, triplexes and townhomes.”
Water can’t be ignored
It’s a tough time to compete with a proposal for affordable housing but Marcus, who served on the commission for nearly 30 years, says the county can afford to put both proposals on the ballot and let voters decide.
“If you don’t deal at least with the water issue now it’s not going to get any better,” she said.
Kerner recognizes the demand for affordable housing but points out that sufficient reserves of clean water are critical, too.
We need to give the elected representatives of the county every tool and every option to combat water quality issues,” he said.
Marcus is president of Sustainable Palm Beach County, which worked with Kerner in 2020 to put together the list of projects. Among them: $19 million to buy and preserve land in Pal-Mar, the wetlands straddling the Palm Beach-Martin County border; $15 million to restore Mecca Farms, the onetime proposed home of Scripps Florida; and $10 million for planning, design, permitting and construction of stormwater improvement projects.
County Environmental Resources Management staff have considered the list and will make a formal presentation to commissioners on Tuesday.
Kerner raised the idea of the environmental bond pre-COVID when he served as county mayor. At a February 2020 meeting, in the wake of news coverage of a homeless camp at John Prince Park, Bernard suggested borrowing a similar sum to fight homelessness and provide affordable housing.
The county expects to collect $1.4 billion this year from property taxes.
Commissioners delayed both issues while they dealt with the COVID-19 pandemic. The upcoming workshop marks the first public discussion since.
While ending homelessness is not a focus of the council’s report, it is cited as a potential outcome.
Hiking property taxes to reduce property costs?
On a March 20 appearance on Channel 5’s “To The Point” Sunday show, Commissioner Melissa McKinlay worried about the perverse effect of making homeowners pay more in property taxes to help offset the cost of housing.
“I like the idea of having an additional revenue stream come in and help us finance these types of projects long term,” she told the host, Michael Williams. “We have to be careful though. … How do we shape it to have the least amount of impact on housing affordability while in the same sense being able to have a revenue stream to build those units?”
The Housing Leadership Council is offering the county options, from a general obligation bond, which requires voter approval and appears as a separate line item on property tax bills, to a revenue bond, which does not need voter approval, is more flexible and allows the county to tap various revenue streams to pay off.
In either approach, county bond advisers have told the council that the property tax hike needed to pay the debt service on $100 million in bonds would be relatively small, Miller said, about $3 more in taxes for the owner of a $100,000 home.
That would mean $42 a year on a home valued at $400,000 to cover annual payments on $350 million in bonds.
But the impact could be huge, the council suggests.
“The availability of a range of affordable housing options is one of the most important community and economic development issues facing communities,” the report says. “The high rate of resident turnover, the loss of professionals, skilled workers, and key wage earners damages the local economy. Providing housing for a mix of income groups helps retain and attract workers from various backgrounds and skills.”
Affordable housing is critical to maintaining the high-end residential lifestyle sprouting with new condos and residential communities throughout the county, Miller said.
“The bond issue is really the linchpin for all of this,’’ he said at the group’s March meeting. “If we don’t have the money, we’re not going to be able to do a heck of a lot.”
© 2022 Joel Engelhardt. All rights reserved.