News & Views: CHR in the News

City taking creative steps to ease affordable housing woes

By EMILIE ALFINO, ealfino@breezenewspapers.com

There's been a lot of talk in Lee County lately about the problem of affordable workforce housing, but what's being done about it? Sanibel, through Community Housing & Resources Inc., its housing foundation, is working hard and creatively to find real, workable solutions.

The need is great. The housing foundation surveyed 317 Sanibel companies last fall and got a remarkable 94 percent response. Scott Marcelais, the foundation's executive director, was guessing that about 1,500 employees on Sanibel potentially needed housing. What he learned to his surprise was that 4,200 people come from off-island every day to work on Sanibel.

Florida requires all cities to have an affordable housing plan but imposes no specific requirements. In keeping with its historical trend, however, Sanibel beat the state by about 20 years, jumping into a low-income housing program in the early 1970s and imposing upon itself a goal of 3 percent of the city's housing units devoted to lower-income housing.

“But 3 percent will never touch the employee demand,” Marcelais said. “You can meet your goal but not meet your need. There's a big gap between the need and the goal.”

Land is the key to providing below-market-rate housing for workers on Sanibel, and land on Sanibel is in short supply. “The capacity for housing here would never touch the demand,” Marcelais added. “This housing is important for tenants but equally important for business owners,” he said, who have a hard time attracting people to work on Sanibel, largely because of the commute — in both traffic and distance.

It became clear that to provide any below market rate housing on a large scale, CHR needed to look off-island while staying as close as possible to reduce employees' commuting time.

They didn't have to look far. The Shell Point Retirement Community has a workforce of 1,000 people, soon to balloon to 1,400. Lack of nearby housing affects their turnover rate, which currently hovers around 30 to 40 percent. Most Shell Point employees live in Cape Coral and Lehigh Acres and commute 40 miles a day. Predominantly service workers, as is the case with Sanibel Island employees, they labor in lower-paying jobs and can't afford to live closer to work.

“For some time, we have been dealing with the struggle of recruiting people from outside the region because of the difficulty for them in finding affordable housing,” Tim Ficker, vice president of Shell Point operations said. “We also have great empathy for a lot of our front-line people who have to travel great distances to get here.” The combined issues of workers' proximity to their jobs, lack of affordable housing, and a very low unemployment rate, Ficker said, have resulted in “a collision course of factors that make it very difficult for us, and certainly for many of the businesses on Sanibel and Captiva, to recruit those folks, and to keep them.”

Sanibel's housing foundation approached Shell Point in June of last year and started discussing possible joint solutions to their common problem. Now they're joining forces to look for a way to develop land, share the units, and manage them as below market rate housing for workers.

“We have all worked as a team on this, and we're just as excited about it as Shell Point,” Mike Cuscaden, CHR board president said.

“Shell Point is a well-respected facility,” Marcelais said. “A lot of Sanibel residents go there when they leave our island. We started meeting almost monthly to figure out how we could help each other.”

“The first step is to find some land,” Cuscaden said. “Without land, this can't work.”

The housing foundation knew Shell Point, owned by a faith-based company called the Christian and Missionary Alliance Foundation, had land available. They'd recently completed a study of all surplus lands owned by faith-based organizations. “We just didn't know their plans for the land. We asked if they would consider a joint venture where we would form a limited liability corporation to build housing on their land, or land they would acquire,” Marcelais explained.

In November of last year Shell Point and Sanibel's Community Housing Resources (CHR) signed a two-year Agreement of Intent. “It gives us a two-year window to put deals together,” Marcelais said, to pursue employer-assisted workforce housing to help attract and sustain a quality, productive workforce.

“We're optimistic that we can move forward,” Cuscaden said.

“We're very pleased to know there's an organization that has some experience in doing just what we felt we needed to do, and that's CHR,” Ficker added. “When we got connected with them, we felt great that their knowledge of how to seek property, how to approach the right agencies for support and help, combined with our pragmatic need makes for a good partnership. From a practical standpoint, we just want to make it easier for employees to come to work here. These days, under these conditions, organizations cannot ignore the situations their employees face outside the workplace.

“We have a need, and they have knowledge, and so the partnership makes sense,” Ficker concluded.

Marcelais said it is crucial for the employer to be actively involved for this creative undertaking to succeed. “When the employer is involved, they are actively providing a fringe benefit to the employee that gives them a return on their investment,” he said. “This is a dollar the employer spends that always works for them.”

For example: the asset appreciates; turnover reduces; employees are more productive, happier, closer, more able to work overtime, and more readily available in an emergency.

“That dollar is spent once but it works forever,” Marcelais said.

Before World War II, it was not uncommon for employers to take an active part in the housing of their workers, Marcelais explained, but over time, there were abuses by the landlord/employers. “They had too much control,” he said. Everyone has heard the stories about people “owing their soul to the company store,” as the old song goes.

Under the new partnership, Sanibel CHR would be the landlord. “We're in the housing development and management business,” Marcelais stressed. “We're going to be the landlord, not the employer, so if an employee leaves the job, he or she won't necessarily lose the housing (he or she still will be require to work 30 or more hours per week.) This will take away any potential abuses or ability of the employer to take advantage.”

The agreement with Shell Point is initially for two years but is renewable. “This is something that, with the help of the CHR group, we can together go after some possible solutions, no matter how long it takers,” Ficker said. “We are very hopeful, even though we don't have anything firm to talk about yet.” According to the agreement's terms, “The parties agree to explore prospects to the workforce housing situation and pursue mutually agreed-upon remedies to develop housing.”

“The lion's share of the ownership is going to be Shell Point; we will be minority shareholders,” Marcelais explained. “Shell Point will get a percentage of the units for their employees, and we'll get a percentage for Sanibel workers. And some of that will be for Sanibel workers who are county employees, primarily teachers.” There's a 30 percent turnover rate for teachers at The Sanibel School, where teachers are paid the same rate as anywhere else in the Lee County School District, according to Marcelais.

The new partnership with Shell Point is just beginning; the housing under construction there now won't be part of any future workforce housing venture with Sanibel.

Also under way is a survey of county-owned surplus land, with the results of that inventory due July 1. Marcelais said a county-owned parcel is located near Shell Point and might offer some possibilities for the future as well.

CHR has formed a subsidiary to handle off-island housing and other innovative future possibilities, the Coast and Islands Community Land Trust. Its president is Sanibel Planning Commissioner Phillip Marks. The land trust has plans to make home ownership on Sanibel possible for young professional workers, Marks said. “It's a new direction. Community Housing Resources is our parent corporation, but we're a fully tax-exempt, charitable organization that functions on its own. We use the larger CHR board to gain support,” Marks explained.

The trust's first plans include below-market-rate “limited-equity ownership” condominiums right on Sanibel. What is limited-equity ownership? The land trust owns the land and will always own the land. People buy units much like they would buy any condominium. Their equity grows in some progressive amount yet to be determined — for example, 2 percent a year — and is capped at some maximum, maybe 25 percent of the appraised value. So, say it's a $100,000 condominium and the buyer stays for 10 years, after which time it's appraised at $140,000 and the owner is ready to sell. They must sell it back to the Community Land Trust. The owner will get 20 percent of the equity (if it has been growing at 2 percent a year, times 10 years), or an $8,000 profit. “Then we buy it back and sell it to the next eligible person,” Marcelais concluded.

There is no requirement to be a renter in the below market rate housing program prior to being eligible for the limited-equity ownership program.

Ownership of this type is not far off, Marcelais said. The permitting process is under way for 14 units on the island at Court Place near Center Street and Main Street, behind Billy's Bikes. It will be a duplex configuration with six rental units, and eight condominiums for limited-equity ownership.

Marcelais hopes to be through the permitting process this summer and begin construction in the fall. The plan is to use “systems-built housing,” if possible, the new term for modular housing. Marks praised the quality of the systems-built housing. “They're warranted for five years and probably better constructed than the home I live in now,” he said. “It's practically a turnkey set-up, except for your toothbrush.”

“Once we get started, it could be just four months from groundbreaking to occupancy,” Marcelais said. Systems-built housing is quick and meets or beats all of Dade County's hurricane standards, he explained. “It reduces the cost by 30 percent and the time by about 300 percent, from one year to one-third of a year.”

Fifty people are on the waiting list for units in Sanibel's below market rate housing, where the turnover is a little more than 10 percent a year. The math is easy: without the off-island projects under consideration now, a worker could languish on that waiting list for five years or more. And people are surprised to learn that 86 percent of the tenants in Sanibel's below market rate housing are people in the workforce. Marcelais said people often tend to think tenants are primarily seniors.

“The Shell Point project would take care of that waiting list immediately, and those people could remain on the waiting list to move to a unit on the island if they wanted to. The Shell Point units would accommodate people who need housing, not at a rate of eight to 10 at a time the way we do it on the island, but we're talking hundreds of units,” Marcelais said.

That's cause for a lot of excitement and hope at CHR. It presents nothing but positive possibilities for both partners and could expand to other faith-based, land-owning organizations as well as county-owned land. “The land is the key,” Marcelais stressed. “When you have a circumstance where you're going to build rental housing, and you know it's going to be 100 percent full on day one, and you know the tenant population is going to remain, it's a no-brainer. All you have to do is build it.”

So in 2007, as in the early 1970s when the city first voluntarily ventured into below market rate housing, Sanibel is leading the way to solutions—for its workforce, its businesses, and its community. Sanibel wants its workers to be part of the community, Marcelais said. “Otherwise, the community can become homogeneous, and you can start to have business closings. Then people go off-island to shop, and they just come home and stay home and do nothing here.

“It's not just socially and morally sound to provide this housing; it's economics, too.”

Marks said the Shell Point venture will be the first but far from the last effort of the new Community Land Trust. All its future projects will be home ownership, not rentals, Marks said. He stressed the importance of the limited-equity ownership system with these points:

• “It's probably the only way a young to middle-aged professional of any sort—a nurse, a teacher, a police officer—will ever be able to own anything on this island,” Marks said.
  
• If an owner's income jumps (for example, through a job promotion), that home is always his; he doesn't have to move out because his income went up. “There are no upper limits,” Marks stressed.
  
• The homes will appreciate at a set rate, something like a CD, but the percentage of appreciation will be on the total value of the home. For example, a buyer may put $8,000 toward buying a $150,000 home. That buyer will be able to earn equity at a given rate—2 percent or 5 percent, whatever is determined when the program is set up—on the $150,000 for an investment of only $8,000.
  
• Once the home is built, it's a permanent, ongoing workforce housing resource.

“What we're trying to do is attract and sustain a young community, where families can move to Sanibel with their children, who will go to The Sanibel School,” Marks said. “This could be the only way they would be able to have that home.”

Marks said the land trust will begin taking applications soon.

Copied with permission from the Island Reporter, a division of the Breeze Corporation.

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