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Habitat looks to create affordable townhome community

Mark Parker

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The Clearwater City Council approved housing officials to continue negotiate a contract for sale of land at 1454 S. Martin Luther King Jr. Ave (pictured). Screengrab.

Clearwater housing officials selected a partnership between the local Habitat for Humanity and Neighborhood Housing Services affiliates as the recommended recipient of property to develop 24 townhomes.

City council members unanimously approved the Clearwater Economic Development and Housing Department to continue contract negotiations with the two entities during Monday’s work session. The property consists of 1.35 acres at 1454 S. Martin Luther King Jr. Ave.

A five-person development review committee unanimously selected the combined Habitat for Humanity of Pinellas and West Pasco Counties and Tampa Bay Neighborhood Housing services (TBNHS) proposal out of three applicants. Chuck Lane, assistant director of economic development and housing for the city, said two critical risk mitigation factors set the Habitat proposal apart from the others.

“Half of the project won’t be subject to volatile interest rates,” explained Lane. “Secondly, this group seemed to really have a good handle on how they would create and manage a homeowner’s association.”

An aerial view of the 1.4-acre property, valued at $525,000. Screengrab.

The city acquired the property for $84,000 in 1995 through a U.S. Department of Housing and Urban Development grant. Original plans called for a seven-unit single-family subdivision. Housing officials decided a townhome concept would better fit the neighborhood’s character and create more homeownership opportunities.

Due to the use of federal Community Development Block Grant funding, the city must reserve at least half the homes for households making less than 80% of the area median income (AMI). Housing officials issued a request for proposal (RFP) in August, stipulating that the remaining units go to those making under 120% of the AMI.

According to city documents, the maximum density for the property, valued at $525,000 in July, is 24 units. All three submitted proposals call for 24 townhomes with similar three-bedroom, 2.5-bathroom designs with one-car garages.

Habitat and TBNHS expect each home to encompass 1,460 square feet and sell for $325,000. The organizations anticipate a $9.04 million total development cost, leaving a funding gap of $1.24 million, or $51,674 per unit.

The Habitat application calls for the city to donate the land, while Lane said Suncoast Housing Connection offered to pay $180,000. He added that in order to make money on the project, Habitat proposed a 12% developer fee, which is about $970,000, while Suncoast asked for 10%.

While Lane relayed that the committee agreed that Suncoast Housing Connection’s proposal “was a close second,” Habitat’s 0% mortgages and experience managing a homeowner’s association pushed its partnership with TBNHS to the top.

“That’s a very critical element with a project of this size,” he said. “Because if it fails, it can be catastrophic.”

Mike Sutton (front), president and CEO of Habitat for Humanity of Pinellas & West Pasco Counties, at a home dedication ceremony with former Tampa Bay Buccaneer Warrick Dunn in October. Photo by Mark Parker.

Lane told council members that a member from either organization would oversee the process indefinitely and that “they really put together a pretty good proposal on how they would set up that homeowners association and maintain it.”

Council chair and Clearwater Mayor Frank Hibbard noted Habitat’s challenges with operating another development’s association. Lane called that a learning experience for the organization and said the experience helped shape the current proposal.

Mike Sutton, president of the Habitat affiliate, noted it broke ground on the project in question 10 to 12 years ago. He added that the organization substantially increased its educational requirements over the last decade.

“Our education program is now 32 robust classes that all homeowner candidates have to go through,” said Sutton. “This particular project on MLK would be a pretty robust HOA education component that would go above and beyond the classes that we would offer.”

Sutton said the families Habitat serves have no homeowners association experience, and the organization has learned from prior missteps.

Documents state that Habitat and TBNHS will seek Penny for Pinellas funding from the county and city to cover the $1.24 million gap. In addition, council members previously approved allocating $3.3 million in American Rescue Plan Act funding for affordable and workforce housing projects.

“I’ll work with City Manager (Jon) Jennings on what our funding level will be,” said Lane. “That will dictate what they ask of the county. There’s also other features that we need to talk about – rooftop solar and other energy-efficient features.”

If officials finalize a contract, Lane said the Habitat and TBNHS proposal calls for a two-phase build with all 24 townhomes available by March 2026.

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2 Comments

2 Comments

  1. Avatar

    Joyce

    November 28, 2022at6:00 pm

    How do you expect for people to afford to buy one of those homes for $325,000?????
    This price is very unreasonable!!!!
    Joyce

  2. Avatar

    Noah guy

    November 29, 2022at5:12 pm

    $325,000 is nothing when the city has the highest utility rates and they’re putting in an HOA all red flags
    Let’s connect the dots… $325k… overpriced utility rates… HOA… U-turn swerve swerve swerve

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