Panel discusses the thorny problem of affordable housing

Longboat Key and affordable housing are two things not typically mentioned in the same breath. But on Thursday, the lack of affordable housing in the region was discussed at length at The Water Club on Longboat Key.

Even though affordable housing is unlikely, if not impossible, on the barrier island, there is still a need for places for people of lower incomes to live nearby, said Lucy Lapovsky, a member of Miracle on the Key, the bipartisan group that organized the panel discussion.

“We have housekeepers, we have landscapers, we have firemen, we have policemen. They can’t live here. We have one mobile home park, and it’s not inexpensive,” she said. “We have not a lot of rental housing and our housing is outrageously expensive.”

Sarasota County Commissioner Mark Smith, One Stop Housing CEO Mark Vengroff and Gulf Coast Community Foundation Senior Vice President Jon Thaxton made up the panel.

Smith, an architect by trade and commissioner since 2022, said the lack of affordable housing in the Sarasota area is a crisis with ripple effects that include traffic stemming from people commuting to where the service-level jobs are downtown and on the barrier islands where there is little, if any, affordable housing inventory.

Thaxton, a former commissioner with Sarasota County for 12 years and current member of the county’s Affordable Housing Advisory Committee, said housing should be available to people of all income levels.

“I work under the assumption that housing is a necessity. It is like food, it’s like water. A person or family cannot do without secure housing,” Thaxton said. “And in order to have secure housing, the housing must be affordable to that household.”

Thaxton explained that affordable housing has many terms associated with it (workforce housing, attainable housing, low income housing, etc.), but affordable housing itself does have a definition. The U.S. Department of Housing and Urban Development defines it as housing where the occupant is paying no more than 30% of their gross income.

“Housing is a continuum just as income is a continuum. Affordability depends on income, so the housing in order to meet all those affordability notches is a continuum starting at very, very, very low and going very, very, very high,” Thaxton said. “There’s a point in that continuum where the market cannot build the house. By the time you pay for the land, the infrastructure, the construction materials and the labor, you are now at a point where in Sarasota County, 60,000 households cannot afford those units; 60,000 out of 280,000 total households in Sarasota County are what we call cost-impaired.”

Defining and identifying the problem is easier than solving it.

But Vengroff, who took the reins of the company his father founded, is building affordable housing in both Sarasota and Manatee counties. According to One Stop Housing’s website, the company has five properties in Sarasota with units ranging from $700 to $900 per month with utilities included.

“What we decided to do 40 years ago, my father started it, was hyper-focused on providing workforce housing. We built in all the systems, we created the assembly line, brought in all the licenses with a hyper-focus to reduce our cost so we can pay it forward and keep the rents low, period,” Vengroff said. “The only reason we can do it is because we are hyper focused on that, and we’re willing to take less margin to do the same work. We’re the only ones in the country that I’m aware of that are doing what we’re doing.”

The demand for affordable housing in the area is evident to anyone within earshot of One Stop Housing’s North Tamiami Trail office.

“Our phone rings in each county, Sarasota and Manatee County, 120 to 140 phone calls every single day of potential applicants. Families that are working and looking for a home,” Vengroff said. “We have a demand and a waiting list on all our properties, so that speaks volumes for our demand. So we’re just building as fast as we can and they’re filling up like crazy.”

Vengroff said in affordable housing projects there is often up to a 10% gap in development costs for the company.

“Take a development that might cost $40 million. Say I can use $30 million bank debt and put $6 million in. That leaves us $4 million that’s left,” Vengroff said. “When the interest rates went up, that’s when the gap appeared. So if interest rates come down on bank funds, then the gap is no longer needed. Or if I can get land cheap enough to make up that difference, then I may not have that gap either.”

That gap can sometimes be filled with partnerships from local governments providing low interest loans, impact fee reductions or from philanthropic or land donations. Another solution is repurposing an existing building, which reduces construction costs.

The lack of affordable housing in the Sarasota area has been exacerbated as Sarasota has grown while the number of affordable units has not kept up.

“Over the last 35 years we have had relatively stagnant, if not functionally declining wages. We’ve had housing prices go through the stratosphere and so we’re not going to cure this overnight, and we’re not going to cure it with one single solution,” Thaxton said. “One funding source? That’s not going to do it. It’s going to take an amalgamation and the coordination of many different strategies in order to dig ourselves out of this Marianna Trench deep hole that we’ve created for ourselves.”

Market rate housing is not cheap. Census data shows median rent in Sarasota County is $1,818.

“In Sarasota County, we have been reducing regulations, giving the developers all the density that they need, opening up more land for development, and it’s produced no affordable housing. It’s produced an excessive demand on affordable housing and made the problem worse,” Thaxton said. “Keep government out of housing is a great bumper sticker. That’s why we’re in the pickle that we’re in. I love the marketplace, but it’s also somewhat Darwinian. It moves in the path of highest profit and least resistance. We need that. That’s how we get entrepreneurs and medical advances and other great things this country has done. But there’s a point, and the founding fathers knew that, where there is a time where people aren’t going to be able to make it without a little bit of assistance.”