More Affordable Housing Units Coming to Broward County
Some of the most luxurious and refined condominiums and gated communities in Broward County have been completed by the Related Group, but the company is also one of the most prolific developers of affordable housing properties. In Pompano Beach, where the Related Group has completed the upscale Casamar and Solemar oceanfront towers, the company is working on a new project that would add 467 affordable units near the Florida Turnpike section that divides Pompano Beach and Coconut Creek.
The project at 1201 NW 31st Avenue will be developed on 5.2 acres formerly occupied by a hotel, and it will include a retail component and neighborhood amenities for residents and their guests. RUDG LLC, the affordable housing division of the Related Group, is pursuing a $7 million financing deal that would include a ground lease from the county. The idea came from a section within the Broward County Housing Authority, which received seven bids for the project. Preliminary details about the deal suggest that RUDG has proposed a 75-year ground lease that would call for a $4.3 million payment at closing. The $7 million in gap financing would turn into a 30-year loan. The Florida Housing Finance Corporation has been reviewing the RUDG proposal.
Most of the 467 units will qualify under the 80% median household income rule for affordable housing, which in Broward County is $89,100. Up to 113 units will be designated as workforce housing, and 27 will be offered at market rental rates. In South Florida, workforce housing is often occupied by construction crews and emergency workers called up for disaster recovery efforts after hurricanes. The retail component will occupy 3,900 square feet, and there will be a swimming pool plus 690 parking spots. The commission also plans to reroute bus lines and arrange for a ground transportation terminal to serve residents.
South Florida is one of the American metropolitan regions that have been the hardest by the affordable housing crisis. There was a time when people who got priced out of the market in Miami-Dade and Palm Beach could look for more affordable opportunities in Broward County, but that has not been the case in recent years. The cost of homes and rental units in Broward County has been steadily increasing, outpacing wage growth and becoming a serious issue that requires immediate action.
County commissioners have previously attempted to address the lack of housing affordability through Community Development Block Grants funded by federal programs, Emergency Solutions Grants, and tenant-based rental assistance. Despite these efforts, the county housing market has largely marched in step with the rest of South Florida in terms of property value appreciation, pricing, and speculation. These days, many prospective home buyers and renters with low to moderate incomes are confronted with a housing market that has appreciated well above the level of inflation, thus surpassing the sluggish wage growth of the region by several degrees.
Like in Miami-Dade County, the Broward Housing Authority is implementing a more direct approach to handle the affordability crisis. The approach involves addressing the affordable housing shortage through new construction projects. When breaking down the median household income in Broward County, more than half of the workforce earns between 60% and 80%. Although these would be considered middle-income earners, the current market rents consume more than 50% of their annual income, thus negatively impacting their quality of life and creating an unsustainable socioeconomic situation.
The RUDG project is part of a larger initiative that county commissioners rushed to formulate earlier this year. The dynamic real estate market of Broward County became one of the least affordable places to live in the United States during the COVID-19 pandemic. Unless South Florida goes through another housing market meltdown such as the 2008 real estate bubble, a market correction is unlikely. Demographic studies show that affordable housing crises often result in a reduction of economic competitiveness, which is often followed by lower quality of life. To this effect, the county commission has drafted a 10-year master plan with financial and zoning solutions; the plan is strongly focused on encouraging developers such as RUDG to build more affordable housing projects through subsidies.
Broward County cannot afford to lose the competitive edge that brought major technology companies such as Citrix, Autodesk, and Equinox Systems from the 1990s through 2010. These companies chose Broward over Miami-Dade and Palm Beach because they were attracted by the abundance of workforce talent. The affordable housing crisis has been eroding the talent pool because most workers can't afford to live there. Estimates by the Greater Fort Lauderdale Chamber of Commerce indicate that 62% of households are spending a third of their income on monthly rent and mortgage payments.
The long-term implications of an affordable housing crisis could make Broward County a less desirable place to live. A lack of affordability would drive skilled workers, particularly young professionals and families, to seek employment in more affordable areas, thus exacerbating the loss of workforce talent. This is usually the first step toward reduced consumer spending, slower economic growth, and income inequality.