The Palm Beach Board of County Commissioners have approved two bonds to help pay for two affordable rental housing developments: one specifically for qualified veterans and another aimed at low-income residents.
Money raised through a $27 million bond would be used to help build 168 rental apartment units in Belle Glade (Calusa Point II), one of the country’s poorest areas. The other $14.2 million bond would help fund a 54-unit apartment complex (Village of Valor), aimed at military veterans in Palm Springs, a village west of Lake Worth Beach, according to a presentation by the Housing Finance Authority of Palm Beach County, which helps fund developers who build affordable housing. Commissioners approved the two bonds in a 6-0 vote last week.
The potential addition of hundreds of rental apartment units comes amid a growing affordable housing crisis in not only Palm Beach but throughout South Florida, which now ranks as one of the nation’s most expensive rental markets.
The median monthly rent of a two-bedroom rental apartment in West Palm Beach is $2,400; a one-bedroom is $1,851, according to the latest data from Zillow, the tech real estate company.
The county bonds are designed to lower construction costs for developers so that homes can be built below market value, according to David Brandt, executive director of the Housing Finance Authority of Palm Beach County.
He told WLRN that developers requested “private activity revenue bonds” for the housing projects through an open application process.
“Revenue bonds are exempt from federal income tax and therefore have a lower interest rate compared with conventional financing,” Brandt said.
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Developers also qualified for the federal 4% Low Income Housing Tax Credit, a tax incentive for building affordable homes. But Brandt said the incentives are “insufficient,” so developers still need to raise funds through local, state or federal sources.
Both projects — at least for now — are “still in the process of securing their respective 'gap' funding,” said Brandt, who noted that the county cannot lend the money raised through the municipal bonds until the development is fully funded.
The county requires affordable housing projects have 40% of units rented to tenants with household incomes not exceeding 60% of the area median income, or AMI. The county’s median household income is nearly $70,000.
Almost 30% of renters in Palm Beach are "severely cost-burdened," meaning they spent more than half their income on housing, according to the recent Palm Beach County Housing Equity Study.
The Housing Leadership Council of Palm Beach County, which commissioned the study, wants to build 20,000 affordable housing units over the next 10 years, with financial assistance from a $200 million bond approved last year to build affordable and workforce housing units.
