City unveils plan to purchase flood-prone properties

St. Petersburg is finalizing the second phase of its $160 million disaster recovery plan, which includes homebuyer assistance, affordable housing and voluntary buyout programs.

The city expects to purchase 14 high-risk residential or commercial properties, help create 582 affordable multifamily housing units and provide 70 low-income households with up to $80,000 in down payment assistance. Acquisition program participants will receive the post-storm fair market value for their homes, up to $400,000, and cash relocation incentives.

Officials will offer those storm victims up to $50,000 to purchase or rent another home with a reduced flood risk in Florida. However, Councilmember Brandi Gabbard told administrators at a Jan. 15 committee meeting that ensuring residents can safely remain in coastal communities is a “huge priority for me.”

“The district I represent is 95% within the coastal high-hazard (area),” Gabbard said. “We’re not giving up. We want to adapt; we want to be able to maintain our neighborhoods.”

She added that climate gentrification is a “real challenge” for coastal communities. Gabbard also noted that 46% of St. Petersburg has a high flood risk, and that number will “continue to grow.”

St. Petersburg can purchase storm-damaged properties in the pink-shaded areas. Image: City documents.

The federally funded Sunrise St. Pete initiative’s first phase will provide storm-affected homeowners with up to $375,000 for reconstruction, including elevation, $100,000 for rehabilitation and $50,000 for previously completed repairs. All eligible residents can also receive $15,000 for up to six consecutive months of rent, mortgage and utility payments.

According to U.S. Department of Housing and Urban Development (HUD) requirements, city officials must convert parcels acquired through the voluntary buyout initiative into open space. They can also dedicate the land to recreational or flood mitigation uses.

“We had a lot of conversation about this post-flood, post-storm value,” said Amy Foster, housing and neighborhood services administrator. “And why would they go with our program versus selling it on the market? It’s these additional incentives that incentivize them to go into our program.”

While the full city council must still approve program parameters, administrators have allocated $5 million to purchase high-risk properties that sustained damage from Hurricanes Idalia or Helene. At least 80% of the acquisition must benefit households earning up to 80% of the area median income (AMI).

Administrators also recommend limiting the initiative to parcels within designated disaster risk reduction areas. Low- to moderate-income households must comprise over 50% of the population in those neighborhoods, and acquiring contiguous properties is a priority.

“There’s a lot of talk about (participants) moving anywhere within Florida,” Gabbard said. “I don’t know that I love that. Dollars that are being spent here in the City of St. Petersburg to help St. Petersburg residents – I would like, if at all possible, for us to find ways to keep them as St. Petersburg residents.”

The city will allocate $5 million for homebuyer assistance prioritize low-income households with age-dependent and disabled members, or essential service personnel. Officials will allocate $48 million to affordable housing.

A graphic highlighting new program details. Image: City documents.

Developers, public housing authorities and current multi-family property owners can receive up to $125,000 per new unit, if over half are for households earning at or below 80% of the AMI. The minimum affordability period is 30 years, and officials will prioritize developments that offer a longer term and cater to extremely low-income residents.

Gabbard said some developers have already expressed confidence in their ability to secure program subsidies. Mark Van Lue, assistant director of housing and community development, said the city has 14 project funding applications totaling nearly $90 million that have yet to receive the council’s approval.

“We haven’t even put out an RFP (request for proposals) yet, so we’re definitely going to get more projects,” Van Lue added. “The good news is that it’s going to make our competitive process work very well. It’s not just a handful of people who are going to be looking for this money.”

He said St. Petersburg has approximately $9 million “to work with” in this year’s budget, and 84% of units in the 14 pending projects are for households earning up to 80% of the AMI. A “pretty good percentage” of those are “well below” that threshold.

“We’re not getting tons of 120% (AMI) or market rates in these projects,” Van Lue continued. “So, I think that all speaks well to this competitive process that we’re going to run.”

Gabbard said the funding is not “a given or a handout.” She believes that “if our residents are fighting this hard to get this money, our developers should be, as well.”

Administrators will provide more granular acquisition details to council members in a forthcoming resolution for their approval. Foster said there is flexibility to tweak the Sunrise St. Pete initiatives discussed at the committee meeting.

Committee members will likely revisit program parameters before Sunrise St. Pete’s second phase launches in the spring. The council will vote on accepting a long-awaited, amended HUD grant agreement Thursday.

“It’s really hard to give away money,” said Councilmember Mike Harting. “The level of complexity – you’ve built a business from the ground up. It’s really pretty amazing.”