Home ownership and the affordable housing puzzle

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Housing affordability has been a hot topic in Tampa Bay for some time. Affordable housing was a prominent feature in the debate about the various Tropicana Field redevelopment proposals. As luxury towers spring up and rents and home values spiral upward, many people who live and work in St. Petersburg and the broader region can’t secure housing that fits their budget and are priced out of the area. Some fall into homelessness.

But the public conversation about housing can be confusing, lacking in specificity, and short on solutions. What, exactly, does “affordable housing” mean? What’s the scope of the affordability problem? What strategies are helping to increase the availability of homes for lower-wage and middle-class buyers and renters in the hot Tampa Bay real estate markets?

For guidance on the affordable housing puzzle, we turned to Habitat for Humanity of Pinellas and West Pasco Counties CEO Mike Sutton and his team. This region is fortunate to be home to the nation’s most prolific Habitat affiliate, which will soon turn over the keys to its 800th home to a family in Lealman.

Habitat for Humanity ‘s work is focused on the affordable homeownership segment of the housing continuum. The local affiliate is experiencing its third straight year of record growth and plans to build homes for 70 to 75 families who make 30 to 80% of the area median income.

Habitat reports that an estimated 140,000 households in Pinellas are struggling with unsustainable housing cost burden. That’s when a household pays more than 30% of its gross monthly income for housing expenses, leaving insufficient money for other necessities.

In late 2022, Tampa Bay homebuyers on average were spending 35.5% of their household income on mortgage payments, according to Zillow. The situation is more dire for renters, who spend on average 42% for rent, making Tampa #4 on the list of the nation’s most unaffordable cities.

There are no simple solutions to the affordable housing crisis: A combination of policy reform, private sector initiatives, philanthropic resources, and community-based efforts are all needed. Working together to increase the supply is crucial. There are only 53 affordable housing units available for every 100 households earning 60% or less of the area median income. That means that thousands of workers our local economy depends upon cannot provide stable housing for their families. A shortage of housing overall puts extra pressure on those at the lower end of the income spectrum in competition for an insufficient supply.  

CEO Mike Sutton emphasizes that Habitat homes are sold, not given away. Home buyers must invest between 300 and 400 hours of “sweat equity” in their homes and attend more than 32 education classes on topics ranging from budgeting to home maintenance. Zero-interest mortgages help bring the homes within financial reach.

“Often our buyers end up spending less on their mortgage, taxes and insurance than they had been on rent,” said Sutton. “What they are able to do with that surplus each month raises their standard of living and gives them an on ramp to middle-class life. People move off housing assistance and other forms of public assistance permanently. It’s transformative.”

When families are freed from unanticipated rent increases, and the corresponding stress of frequent moves and school changes for their children, the stability and confidence they experience is palpable. Wages increase. Educational attainment soars. Families have the opportunity for the first time to build intergenerational wealth.

And the vast majority of Habitat families are successful homeowners: Of the 800 homes built and sold in Pinellas and West Pasco counties, there have only been seven foreclosures.

Asked about NIMBY-ism (the Not in My Backyard phenomenon, i.e. neighbors objecting to the arrival of a Habitat house and family in their midst) Sutton acknowledged that neighborhood resistance is a serious obstacle to the creation of affordable housing overall. However, he reports that Habitat has deep experience breaking down barriers and resistance, in part by engaging Habitat families and volunteers as ambassadors for the program. “By the time the home is built, tensions have typically dissolved. Families are part of the process – going door to door, introducing themselves, handing out information, inviting their neighbors to the opening,” Sutton said.

Habitat has recently built a mini-subdivision of single-family homes in Lealman and is moving into the multi-family housing market in St. Petersburg. “These clusters give homeowners a supportive community of people who share the culture of all that goes into becoming a Habitat family,” Sutton added. 

Inflation has increased the cost of Habitat homes by $45,000 over what they were before the pandemic. This requires raising more than $3 million additional revenue each year just to meet construction costs. The organization currently has a strong volunteer corps, donor base and partnerships with contractors and suppliers, but to meet future demand they’re working to establish stronger collaborations with local, county, and state governments and corporate partners.

A new program “CEOs Build” has enlisted 55 corporate leaders, including Bill Brand, Mindy Grossman and Ryan Ross, to make a financial commitment to Habitat and volunteer at a build site. “These leaders understand that the availability of affordable housing is important to their recruitment and retention of quality employees,” Sutton said.

Policy advocacy is key to the future of affordable housing of all types, according to Sutton. “It is not easy to create low-income or moderate-income housing for purchase or for rent. More funding is needed. We need to advocate for easier and less time-consuming permitting and construction processes. And the high cost of land is a big factor.”

Advocacy is a priority for Habitat moving forward. The organization recently made its first state government funding appropriation request. Habitat recently hosted 25 legislators to a home building and information session to ask for help. To leverage public interest in the topic, they’ve developed a one-hour virtual workshop, “Affordable Housing 101,” to build awareness of current issues and offer actionable steps that community members can take to advocate for better housing options for their fellow citizens.

The next advocacy workshop is April 20 at 12 p.m. To learn more, visit https://habitatpwp.org/advocate/.

Interested in supporting Habitat for Humanity of Pinellas and West Pasco Counties financially? Attend their “Disco Ball” gala March 31, or donate to or shop at one of their Restores, or make a donation. Want to apply to become a Habitat family? Take a virtual tour of a home and apply here. 

Interested in knowing more about the local housing scene? The Institute for Strategic Policy Solutions at St. Pete College hosted this program, “Foundation for the Future: Building Our Housing Landscape,” late last year.