Hurricanes make housing shortage worse in Central Florida
Orlando theme-park worker Daisy Hernandez was struggling to find an affordable rental even before Hurricane Irma squeezed Central Florida housing options and Hurricane Maria pushed Puerto Ricans to the mainland.
"I'm trying to hurry to see if I can get this apartment in the Four Corners area southwest of Walt Disney World," Hernandez said. "At the beginning of November, there will be a lot more Puerto Ricans here looking for apartments."
Hernandez and other Central Floridians can expect no reprieve, researchers say, from rising rents and home prices in a metro area deemed one of the nation's hottest by Arch Mortgage Insurance Co. To help meet needs, Osceola, Orange and Seminole county officials say they are seeking a "missing middle" of housing options, such as garage apartments or tiny homes.
"We created this American dream of owning your own home and owning your own property, and it's not necessarily an appropriate dream for everyone at every stage of their life," said Susan Caswell, community development administrator for Osceola.
Until now, Central Florida's housing has consisted mostly of suburban-style houses, town homes and garden apartments. Local governments and the building industry need to work together to create more housing choices, Caswell said.
Osceola might suspend new development approvals so it has time to change building rules with options such as small-scale cottage homes, courtyard apartments, "micro unit" rentals and garage apartments embedded in communities designed for residents of diverse incomes and ages, as well as revisit impact fees.
Orange County is considering mixed-style housing as it moves forward with a development district that which would include about 500 acres south of downtown Orlando. Buildings with five to eight stories and a mix of residential, office and retail are being considered, said County Planner Alberto Vargas. The county is considering prospects for homes with added rentable living spaces of about 400 square feet. The space could help offset mortgage costs for owners who rent them out while helping meet a need, he added.
"The bottom line: You should not be able to see the difference between market-rate properties and affordable ones," Vargas said.
Seminole County is seeking proposals that include reusing old schools, offices and stores, said Donna King, community development division manager for the county. Seminole county now allows "tiny houses," which can be constructed with less than 600 square feet, in certain areas.
"We are looking for people to come to us with ideas on how to increase the number of affordable developments in Seminole," she said.
The proposals are driven, in part, by a projected population increase of about 70,000 annually in the four-county Central Florida region during the decade ending in 2025, University of Florida economic research shows. Supply of homes on the market is already down to about half of normal levels, and affordable apartments are fast becoming unaffordable.
Hernandez said she has waited for federal housing vouchers from the Orlando Housing Authority for months, with no indication whether she would ever get them. Those dynamics have helped boost Metro Orlando home prices to rise at double national rate from a year ago. The bottom line for Metro Orlando is a sharp drop in homeownership with limited housing alternatives.
Steve Guggenmos, vice president of research at Freddie Mac Multifamily, said the Orlando area was stretched thin even before recent hurricanes upset supply and demand.
"The way the market is right now, without any other additional factors, there is more demand than supply of affordable units and that is making it so rents are going up a lot faster than income and so affordability is going down quickly," he said.
In Central Florida, particularly Orange and Osceola counties, rental demand is expected to rise with an influx of many as 100,000 evacuees from Puerto Rico in coming years, according to Brian Alford, who studies Florida economics for the CoStar Group.
Osceola's housing crush is one of the most marked. The number of Osceola complexes affordable to low-income residents dropped from 176 to about 18 during the six years that ended in 2016, according to recent Freddie Mac research. The financial institution looked at complexes that went through the financing process twice between 2010 and again in 2016.
Housing options identified by local governments are laudable, said Owen Beitsch, senior director for GAI Consultants. But they are not necessarily realistic, he said. Builders are constructing larger homes to appeal to buyers and banks are less inclined to back riskier housing types at a time when consumers are seeking more space.
Allowing more rental units per acre generates additional revenue for landlords but the cost of construction is more expensive, he added.
"It's not just a matter of physical environment and appearance," Beitsch said. "It's a matter of weighing all costs."