Palm Beach County voters will decide in November whether to raise property taxes in order to build more affordable housing for middle-class workers such as teachers and firefighters.
But unlike many county referendums, this one wasn’t conceived and recommended by county government administrators.
Instead, it was proposed and designed by a housing advocacy group run in large part by developers and business leaders.
While recommending a property tax increase, the group quietly ruled out other ways to pay for workforce housing projects that would directly impact developers or other businesses.
What voters will decide: 'A crisis we need to address': County puts $200 million affordable housing bond on ballot
Doing so has kept, for now, those alternatives off the agenda of the County Commission, underscoring the outsize role the real estate industry and business leaders have had in steering the county’s efforts to address the housing crisis.
The group, an offshoot of the Housing Leadership Council of Palm Beach County, persuaded a majority of county commissioners that the best way to help alleviate a worsening housing crisis was to create a $200 million pot of money to spur the building of more moderately priced housing.
The hope, supporters say, is that money can be used to help offset the cost of developers building homes and selling or renting them at discounted prices.
Creating as many as 20,000 moderately priced homes over the next decade would provide affordable housing to thousands of workers and their families while easing some of the upward pressure on other housing prices, they say.
The housing referendum on November's ballot was the centerpiece of an “action plan” presented this year by a committee assembled by the Housing Leadership Council, a nonprofit formed by the Economic Council of Palm Beach County. The effort came as county residents suffer through a worsening housing crisis, with rents and home prices spiking to the point that many residents have been pushed out of their homes and businesses struggle to hire workers.
The committee’s leaders say their aim was to bring forward a plan with broad support from the business community. And indeed, the referendum has been supported by the economic council and other local business interests. But the plan calls for little from the developers and builders who produce the county’s housing stock, a group that has successfully persuaded commissioners in the past to reduce their workforce-housing obligations.
Vote spreads the cost of the new housing among all property owners
A Palm Beach Post investigation last month revealed how developers worked for years to persuade commissioners to weaken a once-ambitious workforce housing program, boosting developers' profits while reducing the amount of moderately priced housing available for county residents.
Now, the November referendum spreads the cost of the new housing initiative among all county property owners, while other parts of the housing plan call for loosening regulations and lowering or waiving fees on developers. If approved, the 20-year bond issue would cost the owner of a home with a taxable value of $326,000 between $14 and $20 a year.
When it was presented to county commissioners in March, the plan drew criticism from a county housing official, who said that it failed to present or fully consider other important potential solutions.
“If the housing summit steering committee has put forth a lot of effort, this commission should be brought all of the funding sources, all of the potential sources and not necessarily, ‘Let’s just look at the bond,’” Jonathan Brown, the county’s director of housing and economic development, told commissioners.
“We need to make sure there is transparency in what is presented because there may be other options that are better,” he continued.
Brown said the committee should have done more to explore paying for new affordable housing by charging what's called a “linkage fee" to developers when they build market-rate housing. He said he asked the committee multiple times to propose such a fee as part of their action plan, but committee members declined.
“That should have been presented,” he said. “That should be one of the options that this commission should make a decision on, whether they want to explore or not.”
Committee leaders acknowledge they rejected his proposal, which they said was opposed by many business leaders. But they said doing so was in line with their mission of proposing a plan the business community would support. Indeed, they said, presenting a plan with business-community support was a directive from the county government’s top executive — County Administrator Verdenia Baker.
“Those were marching orders from the county administrator herself,” Jack Weir, a Palm Beach Gardens developer and chairman of the Housing Leadership Council, said in an interview. “I think we’ve achieved it,” he added, saying the housing bond appears to have broad business support. “We think this is a very smart and effective plan which will leverage private resources."
In an interview, Baker said she did not recall ever giving Weir or other committee members any such direction. But she agreed it was important that business leaders support any major new housing initiatives.
“I think right now we’ve got to come together as a community with a plan,” she said, “and we will be constantly adding tools to the toolbox.”
That plan, though, continues to be largely driven by developers.
It was the central topic of a housing summit organized this summer by the county government — and sponsored by developers. After a session at the summit debating how to handle the housing crisis, County Commissioner Maria Sachs made a point to thank the developer Dan Catalfumo, whose company was a sponsor of the event.
“You’re making this happen, sir,” she said to him. “Thank you so much.”
The industry’s guiding role in creating and promoting the referendum even has played out in county commissioners’ votes on whether to support it.
Commissioner Melissa McKinlay had her doubts about the referendum as a commission vote on whether to put it on the ballot approached in June. With the economy seemingly worsening, rents spiking and gas prices and inflation shooting upward, she worried it was a bad time to raise taxes on residents.
A conversation with Weir about how the money would be allocated was the clincher for her "no" vote, she said. Weir, she recalled, told her the money should be steered mostly toward projects near major roads and population centers, which she interpreted as meaning the mostly rural Glades region was unlikely to be a major focus.
“I met with him and asked how he would prioritize the projects,” she recalled in an interview, “and the way he described it to me pretty much eliminated the western communities in Palm Beach County.
"I didn’t want to tax the western-community residents if they weren’t going to receive a benefit from it,” she said, adding that she respected Weir and the committee’s work.
McKinlay acknowledged that commissioners, not Weir or other private residents, would ultimately decide where and how the bond money would be apportioned. But she said the committee’s central role in planning and pushing for the bond made it likely that commissioners would rely heavily on Weir’s judgment in setting it up.
“I think that Jack is very influential in this field,” she said. “His advice will be given strong consideration but it won’t be the final word.”
Commissioners voted 4-2 to put the referendum on the November ballot, with McKinlay and Commissioner Maria Marino opposing.
Morris “Skip” Miller, chairman of the committee and an attorney at Greenspoon Marder, said the committee that designed the action plan included people from a wide range of organizations, and that it met in publicly advertised virtual meetings and posted some of their meetings online. Their work, and an in-depth housing study that preceded it, were paid for and supported by the Housing Leadership Council.
Their process “wasn’t as structured as maybe it could have been or should have been,” he said, and he could not recall whether there had been formal decisions on whether to consider linkage fees or other alternative money-raising strategies. But, he pointed out, county administrators can propose such things directly to county commissioners at any time.
“He (Brown) has consistently said, ‘Why aren’t linkage fees in the plan?’” he said, “and our answer to him, to be honest, is the county is free to adopt a linkage fee whenever it wants.”
Brown, in an interview, said he plans to propose just that sometime after the November vote on the housing referendum.
“With this particular plan, it definitely was led and driven by the housing sector,” he said. “It’s not a plan that the county funded or commissioners asked to have done, so we have to respect the fact that the housing council had its marching orders.”
Andrew Marra is an investigative reporter at The Palm Beach Post. To support our journalism, please consider subscribing.
This article originally appeared on Palm Beach Post: Palm Beach County housing group dismissed options that cost builders