A discussion about how to increase the availability of attainable and affordable housing in Oviedo has a number of City Council members trying to find answers, with disagreements on what can be done.
“The rent is outrageous here; it’s more expensive to rent than it was to pay a mortgage if you bought a house five years ago,” Councilmember Natalie Teuchert said.
Oviedo Mayor Megan Sladek presented a proposal to implement further linkage fees for developers at the July 24 City Council working session, which was met with skepticism by the other four councilmembers.
Linkage fees are a way for local governments to collect money from developers to help support the development of affordable and attainable housing.
“[We] either procure it from the developer, or the government procures [the money] from everybody else who already lives here and gives it to future developers,” Sladek said. “Those are the choices.”
Affordable housing is defined as “housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities,” according to the United States Department of Housing and Urban Development. Households spending more than 30 percent are considered cost burdened. Affordable housing also includes subsidized housing for those earning 80% or less than the area median income (AMI). The median income in Seminole County is about $70,000.
Seminole County also follows the attainable, or workforce housing, model, which includes households earning up to 140% of the AMI or just under $100,000 a year.
“[We want to be in a place where] a one-salary teacher can afford to live somewhere in Oviedo. That’s the best case,” Sladek said. “I think we can figure out a way to get our first responders and our teachers to be able to live in Oviedo if we did linkage fees.”
The rest of the Council members did not see enough of a benefit in discussing the linkage fee proposal further. One of the biggest reasons was because they say adding additional fees to developers would lead to an increased cost for renters or homebuyers.
“If your goal is to achieve more affordable housing, you don’t want to increase cost to the developer that causes the housing prices to increase,” Councilmember Bob Pollack said.
Larry Jordan, CEO of Jordan Construction & Development in Oviedo, has seen that firsthand.
“The price for Oviedo has gone up because Oviedo is a desirable area,” he said. “So just that alone raises the price of the units. … But then obviously with the material and all the impact fees that are being put on the builders, the builders obviously have to raise the price also.”
While Teuchert sees the value in having a discussion about the fees, she is wary of the actual impact they can have.
“Do I think it’s a good idea to explore? Yes. Do I think it actually does anything for the problem at hand? No,” she said. “I don’t want to be slapping fees on developments that don’t do anything. I just don’t think that’s right.”
Among her concerns about the fees are that they would not generate enough money to make meaningful changes.
“Let’s say we get $200,000 over 10 years. We can’t build an apartment complex,” she said. “That’s not enough money to even do the parking lot.”
Jordan has already been impacted by other linkage fees, and with the increasing cost of material and labor, has stopped certain developments due to the fees.
“They just tell you, you’ve got to pay it. If you don’t, you can’t get your development rights, you can’t do anything with your property,” he said.
So what can the city do to address the increasingly more common problem of unavailable affordable or attainable housing in the city?
Florida’s Live Local Act, which went into effect July 1, says that local governments must authorize multi-family and mixed-use residential developments in areas zoned for commercial, mixed use, or industrial uses if the development comprises at least 40% affordable housing.
Sladek, however, does not see this as a solution.
“I think we will be seeing a lot of four-story luxury apartments,” she said. “Even [with] the luxury apartment style and size, rents meet the criteria under the Live Local Act. And that’s what we’re going to get.”
While there is no quick fix, a number of longer-term ideas have been discussed by the City Council.
Density bonuses, which offer developers the incentive of being able to add more units in exchange for adding a number of environmentally and city-friendly amenities, have been available and are seen as one possible answer. The city’s land development code board has been working on updating the bonuses, with a draft expected to be presented to City Council in October.
The goal of the density bonuses is to help increase supply of units, which would help stabilize prices.
One addition council members hope to see is bonuses for affordable housing in new developments.
“If you want to build two more stories and put X-percentage of it affordable, OK, now they’re making a little more money, they’re incentivized to do it,” Teuchert said. “And at the end of the project, we have affordable housing. I do think it’s a better way to get there. Is everybody going to do it? No.”
However, developers like Jordan have not taken the city up on its current bonuses.
“We’ve had this density bonus for [about] 15 years, and zero people have accepted the free gift of the density bonus,” Sladek said. “Zero.
“If you do not charge a linkage fee at the same time as you offer bonus densities, they will not take the bonus density because it doesn’t make any economic sense,” she said. “They make more profit building less.”
David Axel, president of Axel Real Estate, Inc. in Oviedo, said the reason for this is that adding more units can cause a spike in costs that far outweigh the benefits.
“Once you go past a certain height, it is more expensive. And once you get past a certain density, it requires structured parking, which is outrageously expensive,” he said.
With land in Oviedo at a premium, Pollack sees that changing with the potential updates.
“I think that developers, when they’re developing the north end over by Solary Park, when all that stuff starts to get all redeveloped over there, I believe you’ll start to see the developers starting to take advantage of density bonuses and other things,” he said. “It’s a hypothesis … But I believe that you’re going to see it there. And you could possibly see it over at the [Oviedo] Mall, too, when they do the redevelopment where the Macy’s is.”
Filling in the “missing middle” of housing — such as townhomes, duplexes, triplexes, courtyard apartments and other multi-family housing — is one way the city can mitigate the housing crisis.
“Honestly short of maybe little spots here and there, I don’t see single-family homes being built in Oviedo anymore,” Pollack said. “They’re all going to be either townhomes or multi-family.”
Axel says the problem goes back decades.
“Why is there an affordable housing crisis? Well, one of the reasons is because for many, many, many years, zoning laws supported the creation of single-family subdivisions,” he said.
There are at least eight multi-family or townhome projects that are either in review, have been approved or are currently under construction throughout the city. These would create hundreds of additional housing units. Find the projects and information about their development stage here.
Pollack sees a number of these, such as the 70 multi-family townhome units planned for the more than 13 acres around the former Chelonian Institute, as more cost-effective options.
“That’s the type of new construction that’s going to be more attainable and affordable to those individuals that are starting out their careers, and families that are starting out there,” he said. “That’s where the new style of starter homes is going to be.”
Jordan has been focusing on building townhomes due to the affordability.
“[They] are one of the most affordable things you can buy nowadays,” he said. “The land is getting more expensive, so you try to put as many units as you can on a property.”
This is the latest installment of an ongoing housing series exploring housing-related issues and solutions in Greater Oviedo and Winter Springs.
About this series: OCN spends a lot of time listening to its readers and you’ve told us that housing is an important issue to you. OCN has spent months talking with residents, its Community Advisory Board and local leaders to create this series of articles. Some articles will focus on specific areas within Greater Oviedo and Winter Springs while others will involve the entire coverage area.
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