Daytona considering new fees to fund affordable housing

By Eileen Zaffiro-Kean, The Daytona Beach News-Journal

There’s no question Daytona Beach needs more affordable housing, and lots of it.

The city’s median annual income is $44,500, about $15,000 lower than Port Orange, Ormond Beach, Deltona and Palm Coast. For Daytona Beach’s renters, who live in more than half of the city’s housing, it’s even worse: $34,000.

Daytona Beach’s housing stock is also old. About 71% of the city’s housing is more than 40 years old, and almost 30% is at least 50 years old.

Daytona Beach city commissioners have vowed to do what they can to spark affordable housing development.

As commissioners work toward a plan to get hundreds – maybe even thousands – of affordable housing units created in the coming years, a community meeting was held at City Hall Wednesday night to hear what residents have to say about the issue.

More than a dozen residents shared their views, and several of them said they want the city to start charging linkage fees on new development and putting the money into an affordable housing trust fund.

For the past few years the local FAITH organization, an activist coalition of 30 Volusia County houses of worship, has been urging both city and county officials to charge linkage fees and start an affordable housing trust fund. FAITH reaffirmed that priority at the group’s annual action assembly Monday night.

If Daytona Beach decides to try linkage fees, the city could raise millions of dollars every year.

How can affordable housing be financed?

Daytona Beach city commissioners are considering charging linkage fees when new development creates a demand for labor, but construction workers and people who will work at the new business or apartment complex can’t afford local housing.

The fees can be collected from commercial development as well as market-rate residential development and placed in a trust that’s tapped to pay for construction and maintenance of affordable housing.

A consultant the city hired, Strategic Planning Group, has recommended various linkage fees for different types of development ranging from $1.23 per square foot for new hotels to $23.35 per square foot for new office space. The city could choose rates lower than those suggested by the consultant.

If Daytona Beach charged $10 per square foot for 1,500 new residential units averaging 1,400 square feet each, that could raise $18.2 million in linkage fees over 10 years.

A non-residential linkage fee of $10 per square foot on developments that created 10.64 million square feet of new space could tally $53.2 million in linkage fees over 10 years.

Combined, that could come to $71 million in revenue for affordable housing in Daytona Beach.

If Daytona Beach decides to impose linkage fees, state law will require the city to come up with ways to make a developer whole for its linkage fee charge. That could mean providing the developer more floor space than would normally be allowed, density bonuses, flexible design standards, zoning variances, reduced parking requirements, accelerated approvals, reduced fees and tax incentives.

Daytona Beach could also look at requiring developers to sell or rent 10% to 30% of their new residential units to lower-income residents.

Other tools to spur creation of more affordable housing could include waiving or reducing impact fees and building permit fees, expediting permitting at no additional charge, allowing additional building height or square footage and allowing manufactured housing.

‘Affordable housing is not charity’

Housing is considered affordable when the monthly cost for utilities and rent or a mortgage payment is 30% or less of a household’s income, according to the federal government’s definition.

Nearly 60% of Daytona Beach’s renters are pouring more than a third of their income into rent and utility bills. Nearly 40% of Daytona homeowners are burning through more than 30% of their income on mortgage payments and utilities.

Rising house prices and interest rates will make the financial load even heavier for new homeowners, and some people will be priced out of homeownership entirely.

Those who spoke at Wednesday’s meeting said they’ve seen how tough it is for some people, and they offered ideas to relieve that burden.

One man said some local restaurants are struggling to stay open because they can’t find enough employees who can cover their housing costs on what they would be paid as a waitress or cook.