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Deed Restrictions Give Broward Housing Launch a Boost
By Terry Sheridan
In a small step that promises big results, Broward County is moving forward with its first formal affordable housing program on lots claimed for unpaid property taxes.
To ensure homes built on the properties will remain affordable, the land will carry 30-year deed restrictions that encourage owners to stay put for more than 10 years.
The program will begin with 19 lots in the unincorporated Roosevelt Gardens area near Fort Lauderdale. Builders Lennar Corp. and Bob Young worked together before on the Sweeting Landings project in Fort Lauderdale.
Overall, more than 100 affordable homes priced from $130,000 to $200,000 are expected to be built under the county program in the neighborhood near the Swap Shop north of Sunrise Boulevard.
The national home-builder will not market the homes but instead will work with buyers channeled through the nonprofit New Visions Community Development Corp., said Lisa Maxwell, Lennar's redevelopment director.
About 64 interested buyers have been on a waiting list for almost a year, said New Visions executive director Jacqueline Tufts. The group will handle the marketing and prequalification of buyers.
New Visions partnered with Bank of America to build the Sweeting Estates affordable housing several years ago. This is the group's first time working with Lennar, Tufts said.
Buyers will be qualified under U.S. Department of Housing and Urban Development programs that will provide down payment assistance and buyer education programs. Buyers can't earn more than 80 percent of the county's median income of about $58,000. The target likely will be 50 percent to 80 percent of the median income, or about $29,000 to $46,400.
The programs are limited to first-time buyers or those who haven't owned a home in at least three years.
A deed restriction ? the project's most contentious aspect ? was discussed this month at a County Commission meeting.
The staff originally proposed barring owners from selling the Roosevelt Gardens homes for more than the purchase price, said county Vice Mayor Josephus Eggelletion Jr., whose district includes the community. But he said that would affect the appraised values of surrounding properties.
"I tried to craft a compromise to allow the market to play itself out and not cause undue harm to surrounding properties and to ensure the house would stay affordable," Eggelletion said Thursday.
His amendment, approved after a lengthy discussion Feb. 14, gives the county the right of first refusal on resales. Subsequent owners would face the same restriction, said Debbie Bowers, assistant to acting County Administrator Bertha Henry.
An owner who sells in the first 10 years would give any appreciation to the county, but the county would consider hardships such as a death or pending foreclosure, Bowers said.
In the 11th year, the county would get 85 percent of the appreciation. The county would get 5 percent less in each subsequent year. After 30 years, the owner could sell at full market value.
For example, if a $200,000 home sells after 10 years for $400,000, the county would keep $170,000 or the balance after loan payoff, Eggelletion said.
The county could offer the funds as assistance to another buyer, invest it elsewhere or put it in an affordable housing trust fund.
"I came to this after talking to bankers, appraisers and Realtors," he said. "They gave me a sense of what's going on in the marketplace and what appraisers look at on paper and in reality. Banks aren't supposed to red line, but in reality it occurs."
But County Commissioner Ilene Lieberman has questioned whether the recaptured profits would be enough to offset the county's rapidly rising affordability benchmark.
"We don't know what the average sale price of a home will be" after 10 years, she said at the commission meeting. "We're looking at numbers that are approaching $400,000 for an average house. ? This doesn't get to where we need to be with this, which is that we need to maintain an inventory of affordable units."
The commission agreed to add Eggelletion's covenant to the first 19 homes in Roosevelt Gardens. The rest may be sold under other guidelines. u
Terry Sheridan can be reached at email@example.com or at (954) 468-2614.