City of Marathon hosts housing forum
It all started with a Facebook post by local Marathon business owner Larry Smorgala. He wrote, “Just this month alone, two hard working, great families, are moving out of the Keys because they can’t afford to live here and get ahead in life. How does our elected government sit back and watch this happen? … I would love for just ONE elected official to explain the plan that they are working on to help this situation.”
Not long after, Marathon Councilman John Bartus called for a roundtable discussion that took place on May 3 with about 30 people in the main chambers of City Hall. Also in attendance were Mayor Luis Gonzalez, Councilman Mark Senmartin, various city officials (planning director, attorney and city manager), Sheriff Rick Ramsay and Monroe County Mayor Michelle Coldiron.
The meeting’s tone was respectful, if sometimes desperate when businessmen and women described the difficulties in finding employees. Mainly, the meeting was a great exchange of information between residents and city officials.
“We have employee issues, you have employee issues,” restaurant owner Peter Demaris told the city officials in explaining the shortage of employees he says is due to the cost of housing. “We are going to have to raise our rates exponentially and no one is going to want to come here and we will collapse the system. No one is going to spend $35 on my hamburger. I am working my (employees) 65 hours a week just to (be open) four days a week. We need to resolve our affordable housing issues to bring people into the workforce.”
Three possible solutions to the affordable housing were identified: lobbying to change the law that governs how bed taxes can be spent, researching a reportedly successful program currently used on Cape Cod to subsidize annual rentals for workforce and, finally, raising fees, fines and taxes.
Here are the highlights of the discussion:
In Marathon, there are just over 4,000 existing housing units. The city has 344 new affordable building rights to distribute before it reaches “build out,” and the state will no longer issue new building permits. The city also has 44 market rate building rights to distribute.
In the past 15 years, the City of Marathon has built 750 deed-restricted affordable housing units; there are 31 more that are currently “in process.”
The City of Marathon has two types of affordable housing. The first are built using private financing, such as Tarpon Harbour and Seaward Landing. While those projects have income caps for tenants, they can charge the maximum of allowed rents and still meet the definition as affordable housing (120% to 160% of the median income as defined by the City of Marathon).
The second type of affordable housing is developed with “tax credits,” or financed through the Florida Housing Finance Corporation, a quasi-governmental bank. Tax credit projects — like 73rd Street and Crystal Cove Apartments — charge different rents for essentially the same unit based on the renter’s income. For example, a development agreement can set aside five apartments for people earning 20% of Monroe County’s median income (based on federal income guidelines that shift each year to target the most needy category). There can be vacancies in the affordable housing development and tenants still be rejected because they make too much, or too little, to qualify for the available (not rented) apartments.
In the past, the City of Marathon has approved developments of affordable housing with no assurances about what type of affordable housing is built, i.e., whether it will be expensive or inexpensive.
“We do have control if we exercise it,” said Senmartin, adding the council recently put rent cost requirements on a small project to be developed near the airport. “It shouldn’t be a free-for-all.”
The City of Marathon has an affordable housing fund. Since 2010, it has loaned $870,000 to 87 first-time home buyers at $10,000 each. It has been described as a down payment program, but on May 3, most in the room acknowledged that it only covers some of the closing costs. The fund is seeded by developer impact fees, as well as the fee to transfer building rights from owner to owner.
Habitat for Humanity’s Chris Todd-Young is well versed in the need for affordable housing in the Middle Keys. She had two suggestions. One, enforce the income requirements on affordable housing rentals. “There are a lot of people living in affordable housing that don’t need to be there,” she said. Rental enforcement should happen annually to capture data on renters who have outgrown the program with increased earnings (raises). Enforcement does not apply, however, to homebuyers. Income caps are set when they buy the house and, provided they make the mortgage payments, stay the same.
Todd-Young also alerted city officials to a program on Cape Cod that she said is successful — using tax credits to incentivize property owners to rent to the workforce at affordable rates. Bartus asked City Manager George Garrett to follow up on the suggestion and bring back more details. Marathon resident Mallory Morton advocated for something similar, voicing support for government-business partnerships to help purchase employee housing with property tax breaks.
The forum participants also asked “out of the box” questions. For example, can vacation rental application fees or vacation rental violation fees be doubled and then siphoned off to use as subsidies? Unfortunately, no.Florida Keys Weekly