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We’re at the ‘epicenter’ of the nation’s housing crisis, but Broward’s housing leaders are missing in action

broward housing council
Broward Housing Council
Two Broward Housing Council members who have yet to show up to a council board meeting this year: Broward County Commissioner Jared Moskowitz, who is running for Congress, and School Board member Ann Murray

By Dan Christensen, FloridaBulldog.org

What if there was a crisis in Broward County and the leaders responsible for helping to solve it didn’t bother to show up?

We just found out. Amid a “housing affordability crisis” that the CEO of the United Way of Broward recently described as “the predominant issue affecting Broward residents,” the 15-member Broward Housing Council canceled its June 24 meeting “due to a lack of quorum,” its website says.

Worse. Two ostensible public servants on the board haven’t shown up for any council meetings all year: Broward County Commissioner Jared Moskowitz, who’s busy running for Congress, and outgoing School Board member Ann Murray. Their absences in February, April and June were all unexcused.

Under the council’s bylaws established by the county commission, that should mean Moskowitz and Murray are out. “A member of the Broward County Housing Council shall be automatically removed as a member if he or she has three (3) consecutive unexcused absences…” say the council’s bylaws. Automatic removal will be deemed effective for Moskowitz “when written notice of the reason for the removal has been sent to the member by the Office of Intergovernmental Affairs and Professional Standards.” For Murray, it will be effective when a written notice is sent by the “Council Coordinator,” the bylaws say.

The same rule also applies to one private citizen on the housing council’s board who was likewise absent from all three of this year’s scheduled meetings: Fort Lauderdale real estate broker Christopher Krzemien.

HOUSING CRISIS ‘EPICENTER’

The embarrassing no-shows are ill-timed.

Four days after the housing council meeting was called off, President Biden’s housing Secretary Marcia Fudge landed in South Florida and declared Miami to be “the epicenter of the housing crisis in this country,” according to the Miami Herald.

And Broward is clearly within the epicenter’s cone of certainty.

Kathleen Cannon

On June 14, Florida International University’s Metropolitan Center Associate Director Dr. Ned Murray presented Broward commissioners with the preliminary findings of the center’s assessment of the county’s affordable housing needs. A key finding: a stunning 92 percent of Broward residents – many of whom are people of color – can’t afford the current median sale price of $545,000 of a single-family home.

And as United Way CEO Kathleen Cannon noted in an April op-ed in the Sun-Sentinel, “Broward is ranked last in the state’s 67 counties in affordable available housing to this population, with less than 25 units for every 100 families. These are employed people like teachers, office workers, service industry land retail employees – the backbone of our economy.” Housing is affordable if the occupant pays no more than 30 percent of gross monthly income for it, according to U.S. government.

In response, the United Way has launched its “United in Housing for Broward Program Related Investment Fund. Its purpose: to build a “capital fund to support affordable housing projects” that benefit workers who are renting because they can’t afford to buy a home.

THE 12-MINUTE MEETING

What has the Broward Housing Council done lately, besides failing to meet last month? Not much, a review of its recent agendas and official minutes shows.

The group, which was created to advise the county commission about policy on affordable and workplace housing and homelessness, is supposed to meet six times a year. The rules don’t say for how long.

In April, the council met by video conference for exactly 12 minutes. A draft summary of the meeting’s minutes shows that after roll call and approving the minutes of the previous meeting, members heard a couple of brief reports, including from the director of the county’s urban planning division about how advisory boards would resume in person meetings effective May 11 and that ethics training would be provided during the June 24 meeting (that was canceled).

No initiatives or ideas were proposed. But the council did fulfill its lone specified annual duty: submit an annual report to the county commission and others.

Minutes of two prior meetings show they were similarly short, sweet and devoid of evidence of fresh thinking about ways to help residents in dire need of affordable housing.

The February 25 video conference meeting lasted 41 minutes. The meeting began with the introduction of two new council members. “Chair (Marcia) Barry-Smith welcomed new BHC members (Broward) Commissioner Jared Moskowitz, representing the board of County Commissioners, and Nathan Perlmutter, representing the Builders Association of South Florida,” the minutes say.

Moskowitz was a no-show.

VACANCIES ON THE BOARD

The council was informed that three days earlier the county commission had approved $47 million in gap financing for nine new construction and/or land acquisition projects representing 1,025 new affordable multifamily units. Chairwoman Marcia Barry-Smith noted there were four vacancies on the council’s roster.

Those vacancies remain today, despite council bylaws that say the council must be made up of “at least 17 and no more than 19 members, comprised of 16 voting members.” Currently, there are only 13 voting members. Vacancies are supposed to be filled “as soon as is practicable by the appropriate appointing authority.”

County commissioners appoint seven to nine members, including one of their own, from various categories. The Broward League of Cities appoints three. The rest are appointed by seven other organizations, including the School Board, Florida Association of Realtors, the Builders Association of South Florida. Broward’s administrator, or her designee, is also a non-voting member.

Dr. Ned Murray

The December 2021 meeting of the Broward Housing Council, also via teleconference, was a spare 21 minutes. The council was briefed on the governor’s 2022 budget included $350 million for affordable housing and a summary of the federal Build Back Better Act.

The June meeting was canceled when only seven members declared the day before that they would not attend. Two of those members don’t have a vote, so only five of the 13 voting members were not marked as absent. A quorum requires a majority of the current voting members to be present.

Besides the ethics training, the June meeting was supposed to feature the election of a new chair and vice chair, several housing related reports, a discussion of an upcoming council workshop in the fall and a presentation by FIU’s Murray on the county’s affordable housing needs.

Presumably, those matters and others will be taken up at the next scheduled meeting – assuming it occurs – on August 12 at 10 a.m. in Room 430 at the Broward Government Center in Fort Lauderdale.

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Latest comments

  • Broward citizens desperate need representation and solutions to the housing crisis. Incomes rising 2% and housing cost rising 38% in the last 6 months is dramatically affecting families here.

  • Good luck getting the Broward County Office of Intergovernmental Affairs and Professional Standards to send the termination letter because several years ago Bertha Henry divided the Office in two several offices. Which of the two new offices are now responsible? Clearly, they have not updated the County procedures. Additionally, you are familiar with the two IG Reports involving the current boss with the Office of Professional Standards. This one will get kicked down the road and no one will be removed from their position. Good article nonetheless.

  • The ballot question to raise property taxes is a guarantee to raise rents. The rent is too damn high, vote no on the property tax increase!

  • The housing crisis defined as housing costs exceeding 30% of household income, is blamed on supply-demand inequities. The assumption being building more high density rentals will resolve that inequity, and bring about more affordable housing. As noted, Housing Secretary Marcia Fudge declared South Florida to be “the epicenter of the housing crisis in this country,”

    Before embarking on another round of developer promoted high density housing as a solution, let’s take a closer look at high housing cost causation.

    The recent Miami Herald story on the housing crisis reported 20% to 50% rental rate increases across South Florida in the last year. Little Havana saw rental rates jump 50% in just one year. What is the underlying causation for that large jump in rental rates?

    There are two sides to capitalist free market strategy. One being the organic adjustment of demand to meet supply through the free market pricing mechanism. Another side to this natural process is the subversion of of native pricing based on costs to the unnatural application of charging whatever the market will bear. It can be argued this is free market, however it is NOT free market guided by the underlying principle of Capitalism which is to Maximize the Most Efficient Allocation of Resources.

    To what extent has rental property ownership costs increased in the past year? Including both long term capitalized and short term operating costs, have those costs gone up 20-50%?
    As to long term ownership financing costs, many properties are already paid off, or fully depreciated, or if more recently financed or refinanced, those finance costs are are a 50 year low.

    As to capitalized improvements like a new roof, costs there are up 15% over the past two years, but then again those are capitalized costs spread over a long period of time, 10 to 30 years, as would be major remodeling or upgrade of rental property. Fortunately this occurred at a time of record low financing expense, locked in for the duration of the loan.

    Maintenance and upkeep costs are generally up 10-15% for cleaning, painting, replacing appliances, yard maintenance, plumbing and electrical repairs, accounting for the month to month operating costs.
    There is the increase in property tax across South Florida running shy of the rate of inflation of 8%

    However one cost has increased significantly. Property INSURANCE costs have increased 40%-50% this year, a problem faced by ALL housing and business owners in a State stuck with a legislature too paralyzed to address the underlying issues of climate change, severe weather, salt water intrusion, mold, excessive litigation and the impossibility of insuring against those losses under current coverage requirements such as mandatory full roof replacement.
    Building more high density housing will not reduce insurance costs.

    And yet the increase in rental owners’ capitalized and operating costs, taken together, come nowhere close to the 20%-50% rate increase in monthly rent this year.

    Has the supply side so dwindled or failed to increase, while demand in the last year jumped so dramatically that rent increases need be 50% to equalize the supply/demand equation? Does it sound reasonable that this inequity exploded in just 12 months forcing thousand dollar rent increases on existing long term tenants?
    The housing crisis has been building over time, that is REITS (Real Estate Investment Trusts), Private Equity firms, and developers have been intentionally building the housing crisis.
    How’s that?

    Take the confluence of highly capitalized cash rich REITS buying up residential homes across the nation converting those former family residences into commercial short term rentals in residential zoned neighborhoods. Apart from negatively impacting the quality of life in those existing neighborhoods, converting a former family owned home to commercial short term rentals, has two consequences.
    First: They remove an owner occupied home from the supply side of the home sales market, thereby driving up home prices, making homes not affordable for NEW home buyers thereby also forcing those buyers into the rental market.
    Second: These commercial purchases often transform a family home owner into a renter, adding one more family to the demand side. Seniors are now Downsizing to a rental unit rather than to an owned condo.

    The top 3 REITS and Private Equity firms in the US, Blackstone, Zillow and Bedrock are buying up to 15 percent of available homes, purchasing hundreds of thousands of homes a year, removing them from the owner occupied home market. These are homes that regular home buyers had no economic chance to purchase. Time and again home buyers across the nation recount the difficulty of buying a home given that cash rich REITS are able to make immediate full price cash offers and often lock down a sale before the home has even made the MLS, Real Estate Multiple Listing Services.

    Developers offer to come to the rescue by building high density RENTAL APARTMENTS to solve the housing crisis. But does that solve anything?

    Rentals are a portion of housing the market. Historically rentals were a pathway to home ownership. Individual home ownership, be it homes or condos, are historically the main means of wealth acquisition in the US through property equity and appreciation. Every mortgage payment was an investment in one’s future. On average, home owners accumulate $400,000 paid up equity in their homes by retirement age. Rentals are just the opposite. After 20, 30, or 40 years of making rent payments, the renter has nothing to show for hundreds of thousands of dollars in monthly payments.
    Since 2000, the percentage of home ownership has dropped as more housing has moved to rentals.

    Whereas home owners accumulated wealth over decades of making mortgage payments, today it is corporations who accumulate wealth over decades of renters making rental payments. Changing the housing market from owner occupied to rentals redistributes the wealth to the commercial property owning class. Previously developers built homes and condos for property buyers, making their profit on that original sale and then moving on to new constuction projects. As cities began to become “built out” with little to no new land available, developers recognized the long term profitability of building rental housing, holding onto the property, and deriving an endless rate of return on that investment into perpetuity. The beauty being the developer makes a one time investment that pays off for life, not just in a single sale,

    Developers encountered a problem with cities built out finding no additional land zoned for high density housing. To get around that limitation they came up with a politically palatable solution called FLEX. Developers impressed upon local officials their willingness to mitigate the housing crisis. They used a skewed FLEX calculation to justify building high density apartments by promising to build a number of “affordable” housing units in return. Except the ratio was 1 affordable unit for each standard priced unit. Worse, the definition of “affordable” is cloaked in a general statement as being an acceptable percentage of the local median income. Specifically what that “affordable” amount is varies from jurisdiction to jurisdiction and it is hard to pin down an actual figure. In Plantation I’ve heard that $1850/month for a one bedroom is the definition of affordable, but that figure is going up.

    We face three problems:
    1. Existing rental property owners are increasing rents far beyond the reasonable cost basis for current increase in rental ownership expenses. In other words they are charging What the Market Will Bear. Much like water and gas were sold for exploitative prices after hurricanes. Is there a way to legally prohibit price gouging in the rental market as the legislature did in outlawing price gouging after natural disasters? Is rent control a possibility at the municipal or county level?

    2. Existing housing is being removed from the housing market by commercial corporations invading our residential neighborhoods for short term rental conversions, driving up housing prices, and putting more pressure on the long term rental market. The State of Florida has succumbed to the corporate interests of REITs and Airbnb type operations by passing preemptive legislation to PREVENT local government from restricting the corporate invasion feeding upon our residential neighborhoods. We can thank our Governor Desantis for that with his Open For Business mantra at the expense of our local community. What ordinances can we enact to assess costs to these corporate interlopers making short term rentals more costly to them. They could be assessed a nightly safety registration fee, or a community rental displacement fee, that could be used for rental assistance in the community to help offset the adverse impact of these commercial operations.

    3. Building more high density rental housing is counter intuitive to growing home ownership, wealth acquisition, and preserving affordable housing for our community. Developers claim renting is more affordable than home or condo ownership without accounting fot the benefit of making equity building mortgage payments as opposed to empty rental payments that leave you not one cent richer at the end of the month, or the end of 30 years.
    Developers claim they cannot make a profit building owner occupied housing. Ignoring the time proven truth if they build it, buyers will come, if only once for the one time big home or condo ownership sale instead of the rental cash cow that keeps on giving and giving to developers while taking and taking from our residents.

    Our local elected officials have the FINAL say about what housing gets built in our community. Not Developers, not the State. We have no obligation to succumb to developers’ demands that they will only build self-serving rentals. Profit VS Patience! We are already a city fully built out. If they really, really want to build, they will build what WE APPROVE. If not, just say NO, and let them go elsewhere. It’s their choice. Build for the benefit of our community; home ownership, or not at all.

  • Some REFERENCES for my prior comment:
    References:

    https://www.statista.com/topics/4465/rental-market-in-the-us/#dossierContents__outerWrapper
    Real Estate U.S. Residential Rental Market – statistics & facts
    Published by Statista Research Department, Apr 4, 2022

    https://www.statista.com/statistics/203384/us-two-bedroom-housing-wage-by-state/
    Residential Rental Market: Hourly wages needed to afford a two-bedroom apartment in the United States in 2021, by state

    https://www.huduser.gov/portal/pdredge/pdr_edge_featd_article_092214.html
    Rental Burdens: Rethinking Affordability Measures

    https://www.statista.com/topics/5144/single-family-homes-in-the-us/#topicHeader__wrapper
    U.S. Single family homes – statistics & facts

    https://fred.stlouisfed.org/series/RHORUSQ156N Homeownership Rate in the United States (RHORUSQ156N)

    https://www.wsj.com/articles/homeowner-groups-seek-to-stop-investors-from-buying-houses-to-rent-11650274203
    WSJ PROPERTY REPORT Homeowner Groups Seek to Stop Investors From Buying Houses to Rent
    Suburban neighborhoods are rewriting rules as rental investors’ purchases surge

    https://www.floridabulldog.org/2022/07/were-at-the-epicenter-of-the-nations-housing-crisis-but-browards-housing-leaders-are-missing-in-action/?mc_cid=821cb6de95&mc_eid=3d08d00746 A Failure to execute: President Biden’s housing Secretary Marcia Fudge landed in South Florida and declared Miami to be “the epicenter of the housing crisis in this country,” according to the Miami Herald.
    Amid a “housing affordability crisis” that the CEO of the United Way of Broward recently described as “the predominant issue affecting Broward residents,” the 15-member Broward Housing Council canceled its June 24 meeting “due to a lack of quorum,” its website says. The council was informed that three days earlier the county commission had approved $47 million in gap financing for nine new construction and/or land acquisition projects representing 1,025 new affordable multifamily units. Chairwoman Marcia Barry-Smith noted there were four vacancies on the council’s roster.
    Those vacancies remain today, despite council bylaws that say the council must be made up of “at least 17 and no more than 19 members, comprised of 16 voting members.” Currently, there are only 13 voting members. Vacancies are supposed to be filled “as soon as is practicable by the appropriate appointing authority.” $47 million in available gap financing funding goes undistributed.

    https://brevardnewsbeat.substack.com/p/explosive-growth-of-short-term-rentals Explosive Growth of Short-Term Rentals Transforms Neighborhoods, Disrupts Lives
    Her $750 monthly rent is affordable on the salary from her rewarding but not especially high-paying job as a manager of a nonprofit Christian camp. Though her unit is in a “pretty quirky,” 80-year-old house on South Broad Street, it’s roomy, close to downtown Brevard, and, after seven years of occupancy, “feels very much like home,” Irwin said.
    But now her good fortune is coming to an end.
    The home’s owner, Jackson County real estate broker Billy May, plans to offer its three apartments as short-term rentals and has told tenants they must be out by next month.
    Unable to find a house or apartment she can afford, Irwin, 35, will move in with her grandparents. Though she is now resigned to what she hopes is a temporary arrangement, when she learned of May’s plans in December, “my initial feelings were disappointment, frustration and sadness,” she said. “I was hoping to live here until I could afford to buy a home.”

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