Rising construction costs and increased impact fees are hitting home builders — and buyers — and St. Johns County officials are trying to navigate a complex course that won’t help all residents, may help some residents or may help no one at all, depending on who you ask.
On Tuesday, June 6, the St. Johns County Board of County Commissioners tackled the issue of workforce housing, which, after nearly an hour and a half of discussion, presentations and public input, had to be continued in part until the board’s June 20 meeting.
Though workforce housing has been a concern for several years, the issue at hand came about in October when the Northeast Florida Builders Association requested changes to the Workforce Housing Zoning Designation.
Specifically, the association wanted the county to increase the maximum initial sales price of a workforce housing unit from $240,000 to $270,000 and reduce the percentage of units offered for sale at this price to 20% of the entire housing project versus the current 40%, among other provisions.
Austin Nicklas, director of governmental affairs for the Northeast Florida Builders Association, presented the builders’ case, stating that the 40% workforce housing rule has become “extremely difficult for builders and developers to meet due to economic conditions.” Similarly, the $240,000 price tag is too low considering the cost of construction.
The county agreed, up to a point. It offered to increase the maximum sale price to $260,000 and reduce the percentage of units to 30%.
The original adoption hearing date was to be May 2, but it was postponed until June 6.
Tuesday’s meeting prompted a lively exchange between commissioners Krista Joseph and Henry Dean.
Joseph questioned the rationale for making the changes. Dean countered that the program was not mandatory for developers and homebuilders.
“It’s strictly voluntary,” he said. “To get them to participate, they need to be able to make a reasonable profit. Not a huge profit, but they can’t operate at a deficit for the whole project.”
He added that he’d “somewhat reluctantly” agreed so as to provide any affordable housing at all.
Joseph cited bankers who told her that, in order for someone to afford a $260,000 to $270,000 home, they would need an income of $60,000 to $70,000, far more than many workers considered “essential” earn.
“If we take a lower number for the price point, and we have a much higher percentage for the amount of homes that have to be at that price point, the affordable housing program will have zero homes,” said Dean.
Several times during the meeting, speakers emphasized that the issue was “workforce” housing rather than “affordable” housing, though many times people said “affordable” when they meant “workforce.”
The county defines affordable housing as housing where rent or mortgage payments, property taxes, insurance and utility costs collectively don’t exceed 30% of a household’s gross income.
Workforce housing, on the other hand, is defined as housing that can be purchased or rented by qualified households whose total income is within the low to moderate category or those earning up to 120% of the area’s median income.
Several times, speakers pointed out that these homes would be affordable to married couples where both partners were employed in the “essential” fields — most frequently mentioned: law enforcement officers, firefighters, nurses and teachers.
If single, however, the incomes of individuals in these fields would most likely fall short.
“I don’t think it’s fair that a nurse has to marry someone who has enough of an income to be able to get workforce housing,” Joseph said.
In fact, according to the pay level of the aforementioned careers, the same double income that would make the workforce housing unit affordable would also exceed the 120% cap, which for two people stands at about $85,000.
“The only way to fix this workforce housing crisis is for the county to start paying its law enforcement, firefighters and teachers substantially more so they can actually afford to live in the county they serve,” said Nicklas.
He said the changes would still not solve every potential homebuyer’s challenges.
“Unfortunately, single-income households, single parents and other lower-income groups will most likely still be priced out at these rates,” he said. “But, sadly, most cannot be helped by the current ordinance, either.”
In fact, Elizabeth Tate, chair of the St. Johns County Chamber of Commerce public policy committee and essential worker housing coalition, said not one new unit has been built or sold under the existing ordinance.
“Even with this new ordinance, fewer than 300 homes will be built,” she said, adding that the four largest employers in the county have a need of 3,500 homes for their employees.
“The housing requirements of hundreds of other St. Johns County employers push that number significantly higher,” she added.
Another concern voiced by multiple people was a deed restriction meant to forestall speculators from purchasing the less-expensive homes simply to flip them at a profit. According to the proposal, anyone buying one of these homes would have to retain ownership for at least three years or sell the house for the exact amount they paid for it.
But naval personnel who make their homes in Northeast Florida could be transferred at any time. If they have to sell, they will be held to the amount they initially paid plus the cost of a sales commission, which equates to selling their homes at a loss.
Tate recommended that both the 120% cap and the three-year deed restriction be removed.
The commission voted 4-1 in favor of the amendment recommended by the builders’ association, with Joseph voting no. The board then unanimously elected to postpone a separate vote on amendments to the plan. These amendments would eliminate the 120% cap and reduce the three-year restriction to two years.
