Affordable Housing Votes Limit Luxury Housing Construction In Key West
By Pru Sowers
New luxury housing construction will come almost to a standstill in Key West next year as a result of action taken by the city commission to increase the local affordable housing stock.
Commissioners voted 6-1 on April 5 to restrict all new building permits allowed by the state in the next fiscal year to affordable units. Since Key West has been designated by the state as an area of “critical control” because of its location and lack of vacant land, the city has a total of 91 units of new housing available each year for the next 10 years. A unit equates roughly to a one-bedroom apartment.
In the next building permit application cycle, 48 of those units had already been set aside for affordable housing. Now, all 91 units will be restricted to new affordable housing projects.
“If we don’t do this, then these units, these precious units that we have left, can get eaten up by market rate projects coming through the pipeline,” said Commissioner Sam Kaufman, who sponsored the resolutions. “We need to make the priority affordable housing.”
Kaufman’s resolution also directed city staff to write another resolution stipulating that all future building permit units allocated over the 10-year program be set aside for affordable housing. That concerned Commissioner Richard Payne, who worried that the city was setting itself up for lawsuits from commercial and residential developers who now cannot continue with their market rate construction projects. But City Attorney Shawn Smith said that the affordable unit set-aside only applies to residential projects, not commercial. In addition, he said, there is a pool of building permit units that has been reserved for existing vacant lots in Key West that will allow owners to build market rate or luxury housing.
The only “no” vote on the resolution was cast by Commissioner Margaret Romero. She argued that developers need to be allowed to include some market rate units in their projects to offset the cost of the lower income units. Otherwise, the reduced profit margin on the less expensive housing will discourage them from building anything at all, she said.
“I think we need to let the free market reign,” Romero declared.
Commissioners also took steps at their April 5 meeting to increase building height and density limits in specific areas of town. Commissioner Jimmy Weekley sponsored this resolution, directing city staff to look for appropriate areas where allowing buildings taller than the current 40-foot limit and increasing the number of units currently allowed per acre could be considered. That would be one way to encourage developers to build affordable housing complexes, he said. The measure passed 6-1, again with Romero dissenting.
“We need a lot more specifics with a lot more data,” she said about the resolution. “And we need to get the citizens’ input before we even go forward.”
That infuriated Weekley, who lashed out at Romero, calling her a conspiracy theorist. The two had clashed previously over Weekley’s proposal that the city purchase Peary Court, a moderate-income housing complex that its new owner had proposed redeveloping into luxury housing. Romero campaigned against the $55 million purchase and was one of the reasons it failed by a 44-56 percent margin in the March 15 election.
Romero kept up her criticism of Weekley’s affordable housing efforts, arguing against his proposal to explore increasing height and density limits in potential locations such as Poinciana Plaza, city-owned land on College Road on Stock Island, and in Bahama Village along the Truman Waterfront. During a presentation by City Planner Thaddeus Cohen on the pros and cons of putting affordable housing in those three locations, Romero said she was getting “real antsy” about changing city land restrictions to benefit developers.
“I am aware of one developer who is already salivating over land down at the Truman Waterfront. And I am already aware that a developer has said they’d like to, or could, put 40 units per acre out [on College Road.] So I just want to be very cautious as we go forward as a city that we are very careful with our land masses… that we are not simply filling the pockets of developers,” she said.
That set up the confrontation between Romero and Weekley over the height and density resolution.
“With that conspiracy theory that you have on every issue about affordable housing, we will never get any housing built in this community,” Weekley said. “You need to set that conspiracy aside and forget about it and let us start working towards providing housing in this community.”
Romero didn’t back down.
“When you are seeking information and don’t get it, you do have to question what is the driving force,” she said.
City Manager Jim Scholl now has 60 days to report back on possible locations where height and density restrictions could be relaxed.
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The need is for deed-restricted affordable rentals. Start calling it that and realize that the only way the City can control rentals, short of instituting rent controls, is to either build and maintain the units themselves, or partner with developers and maintain ownership of the land. The County has made it clear that it is not selling off any more public land. The City is clear on the need to maintain ownership of what precious little land it has left. Hopefully the School Board will follow suit and do a public-private partnership with the Administration site beyond Porter Place Place,near the Coast Guard, or build units themselves and partner with KWHA to maintain them. Companies already exist who will do the developing and building as well as supply the maintenance in return for the government agency subordinating its interest on the land to enable the developer to more easily get a construction loan.
The rent schedules would be restricted to the same chart already in use by the City and would allow only low income and median income units buiilding permits. The contracts can be structured so that the City shares in the profits by charging an appropriate lease fee on the land. Nobody is going to get rich because the permits can only be issued for low and median, and developers claim they cannot make money without a mix of moderate income units, even if one has “free land”. Thus the County accepted
Toppino’s plan for its private property with 70% moderate income units. In that case, the claim that “you must have moderates” in the mix in order to make a profit may be factually correct because of the cost of infrastructure where there is none, i.e., water lines, sewer lines, electric lines, roads and sidewalks.
It is less likely in the case of Key West where all those things are nearby and the only three parcels left ,owned by the City, Mosquito Control/Easter Seals, Truman Waterfront, and Poinciana have those utilities already at hand.
Key West is not the only tourist City finding itself with a need to be in the “housing” business, but I fear that may not sink in with everyone until and unless we start referring to it as a need to build or control deed-restricted rental units, and there just aren’t that many opportunities.
Maureen Bramlage