Clermont weighs density bonuses as path to affordable or inclusionary housing

GrowthSpotter contributor

Clermont is considering a staff proposal to incentivize or require developers to address affordable-housing concerns in their plans, with a similar approach to local governments across Florida and other parts of the country that employ inclusionary programs.

Its Economic Development Office has drawn up a policy that offers housing density bonuses in two parts of the city. In return, developers must promise to include a certain amount of affordable housing. 

 “I think it’s imperative,” Economic Development Director Shannon Schmidt said of creating a program. “Our talent is being priced out of the market. We are hearing from the hospital and our businesses that employees can’t afford to live in Clermont and that’s a problem.”

The Clermont Zoning and Planning Commission passed the resolution onto City Council in August and council is expected to vote on the proposal Sept. 25.

One developer has already engaged the city for use of a density bonus.

Lee Chira, of Lee Chira & Associates, wants to develop approximately 250-275 units on 22-plus acres near the intersection of Hancock Road and State Route 50. The property is located directly behind a line of businesses including 7-Eleven, TiresPlus and BB&T. 

After 35 years in the development business, Chira says he has an obligation to build more affordable housing, which he has already done in other parts of Florida.  

“Central Florida is growing like a weed,” Chira said. “If you’re working for a living, you should be able to afford something decent.”

Chira’s property is in what the city calls the Hooks Street Corridor, one of two areas where the development office has proposed density bonuses.

The other area is mostly south of Hartwood Marsh Road around Pine Lake. It runs along future annexed parcels within the Wellness Way area but does not include properties fronting Hartwood Marsh, according to the city.

The density bonuses are slightly different in the two areas.

The Hooks Street Corridor was identified because it is near major employment hubs and has access to public transit. The amendment to the zoning code would increase the current 12 dwelling units per acre to 20 with set aside of floating units for affordable housing. Chira’s company is currently marketing its Hancock-area land for commercial use, while he waits for the city to vote on the density bonus.

The second area, near Wellness Way Area Plan, is expected to become an employment hub, Schmidt said. It has access into Orange County and the Four Corners. The city would allow an increase in density from the current 12 dwelling units per acre to allow for up to 25 with set asides of floating units for affordable housing. 

In exchange, the developer must create a percentage of affordable housing based on which kind; 5 percent of the bonus units for extremely low-income households; 10 percent of the bonus units for low-income households; 15 percent of the bonus units for moderate income households or another set-aside mixed development deemed acceptable by City Council.

The city will require that any and all developments fit the context and character of the existing neighborhoods, Schmidt said.

“This is not compulsory,” Schmidt said. “It is an opportunity for those inspired by the cause.”

For every 100 people who need an affordable unit in Metro Orlando, only 18 units exist – tying Orlando with Houston as second-worst in the county for available affordable housing, according to National Low Income Housing Coalition. Only Los Angeles provides fewer options. 

While rent affordable for a minimum-wage earner is calculated at $421 per month, Clermont’s average rent is $1,100 for a one-bedroom; $1,600 for a two-bedroom and $1,800 for a three-bedroom, according to the city’s economic development office. 

The city’s proposal has encountered some pushback.

Chip Tatum, president of the Apartment Association of Greater Orlando, penned a letter to Clermont Mayor Gail Ash in mid-August asking for further discussion with his association and other interested parties before a vote takes place.

“While we appreciate the spirit of the ordinance we have significant concerns and reservations about the unintended consequences that legislation like inclusionary zoning so frequenty [sic] has,” Tatum wrote. “… These ordinances complicate the planning process, create a burden on city resources, complicate financing, and result in even higher rents due to suppressed supply.”

Schmidt expects Tatum or someone from the apartment association to speak their mind during the public hearing before the Sept. 25 vote.

“This is consistent with other policies in Central Florida – it’s not a radical proposal,” Schmidt said. “It has been tested and vetted somewhere else.”

Some argue that what Clermont has proposed is not strong enough.

Jaimie Ross, president of Florida Housing Coalition, only considers mandatory policies to be true inclusionary housing programs; when voluntary, she says it is simply a density bonus.

Voluntary programs can be a good start but “are not an effective tool, typically, for getting more affordable housing units built,” Ross said, because market-rate developers tend not to use it.

“They are well received by the affordable housing developers because that’s the business they are in,” Ross said.

This is the first policy that Clermont has ever developed to address the affordable housing problem, Schmidt said.

“We will garnish some insights and greater understanding of it – test it in our market – and potentially, at a future time, create further policies,” Schmidt said.

Have a tip about Central Florida development? Contact us at newsroom@growthspotter.com or 407-420-5427. Follow GrowthSpotter on FacebookTwitter and LinkedIn.

Copyright © 2018, GrowthSpotter
94°