Out of Moves

Out of Moves

Orlando’s affordable housing is a game of chance.

Spring 2020 | By Nicole Dudenhoefer ’17

In late 2019, Tamara Frazier ’19MPA won a lottery and collected a prize that would change her life.

Although it wasn’t a million-dollar jackpot, her prize — becoming a first-time homeowner — felt just as probable as winning the Powerball.

“I don’t think it’s really hit me yet,” says Frazier, a Miami native who recently acquired her home by winning a lottery for first-time homebuyer assistance. “It’s pretty surreal that I’m securing a foundation of my own and in a home I’ll hopefully have paid off within the next 30 years.”

While this is a goal for many people, 74 percent of people in the U.S. can’t afford a median-priced home in their community, according to a national property database. Housing is considered affordable only if the cost for rent or a mortgage plus utilities is below 30 percent of the household income.

Located in downtown Orlando’s Parramore neighborhood, Frazier’s new $205,000 three-bedroom, two-bath home has beautiful doors and the highest ceilings she’s ever seen in a house. The public administration grad estimates it would have taken her five years to save money for the $16,000 down payment she received in grants from Orlando’s Community Redevelopment Agency (CRA).

Instead, she only had to put down $1,000 of her own money.

“I knew that I wasn’t set on moving out of Orlando anytime soon, and just because of how much rent prices are here I thought about home ownership,” says Frazier, who was spending more than half of her income on rent and utilities before purchasing her home.

In 2019, Orlando was ranked the worst metropolitan city in the nation for affordable housing by the National Low Income Housing Coalition, with only 13 units available for every 100 extremely low-income renters — those whose income is at or below the poverty guideline. So local government and nonprofits are developing programs to provide solutions to the region’s housing problems.

Frazier is one of 17 homeowners in Parramore, a historically African-American community that has a median household income of about $15,000, to receive aid from CRA’s program for first-time homeowners. Another 42 homes in the community will become available for those who qualify for the program in the future.

The program requires recipients to secure a $120,000 loan and have ties to Parramore or work in public service, which Frazier fulfills as the coordinated entry supervisor for the Homeless Services Network of Central Florida.

“I’ve always been a grateful person, but seeing how people become homeless on a daily basis because they can’t afford to meet their basic needs makes me even more appreciative of the opportunity I was given,” Frazier says.

In the most basic sense, the affordable housing crisis in Orlando exists because the supply isn’t here to meet the demand of its 2.57 million residents. And as about 1,500 people move to Orlando each week, action is needed. So while these 59 homes will be life-changing for dozens of people, they are just one small solution to a systemic problem that began with the federal government decades ago.

A Historic Problem

From the beginning, the federal government’s public housing policies weren’t intended to help the people struggling the most to afford homes. After the Great Depression, federally funded housing was created to revive the dwindling housing industry.

Working-class white people began living in these new, modern units until other housing opportunities became available in the 1950s. The Federal Housing Administration created single-family homes in the suburbs, but with one restriction: Black people couldn’t own them. So the urban public housing that was once reserved for white people began to house underserved black families.

The shift in who could live there wasn’t the only thing that changed — so did the median income of residents. In 1950, those living in public housing earned about 57 percent of the national median income. By 1970, they earned 29 percent, and in the 1990s they earned 17 percent, according to The Washington Post.

“UCF was very much one of the founding partners of the concept that ultimately became the Parramore Asset Stabilization Fund because the university wants to be a good partner in the community,”
Rob Panepinto

“In 1974, Section 8 was developed to help address the demand for affordable housing by providing subsidy vouchers for rental payments that allow people, in theory, to access housing in areas they want to live,” says UCF Assistant Professor Caroline Cheong. “But for many reasons, the voucher system has been shown to increase and perpetuate sociospatial racial segregation, and concentrations of poverty are not good for anyone.”

On the supply side, programs like the Low-Income Housing Tax Credit — which provides tax credits to developers who create affordable housing — were developed in the 1980s. But these units may not remain affordable forever. After 15 years, developers can seek to leave the program.

“Between now and 2030, about 7,000 units [in this area] will come out of tax credits,” says Mark Brewer, CEO of the Central Florida Foundation and member of the UCF Master of Nonprofit Management Advisory Board. “Imagine you’ve lived somewhere for the last 14 years renting an apartment that’s perfectly affordable to you, and now your rent will rise to market rate.”

As low-cost housing has become more difficult to find each decade, the U.S. government is implementing a new resource to address the problem for the first time in a generation. In 2016, the Housing Trust Fund was developed to allocate $174 million, with at least 75 percent of the funds used to support extremely low-income renters.

Low Wages for Locals

While construction is a constant in Orlando, the types of dwellings being built are mostly pricier homes and luxury apartments, with the average two-bedroom rental costing $1,200. These properties are out of the price range of the nearly 922,000 Floridians who spend more than 50 percent of their income on housing. They are one missed paycheck away from joining the state’s homeless population, which is the third largest in the nation, according to the Sadowski Housing Coalition.

“I see every day how people can have different incomes, education levels, backgrounds or ethnicities and become homeless because of a reason they couldn’t have foreseen,” Frazier says. “It could be a medical bill they have to pay or their hours at work were cut, they were short a couple of dollars for rent, and now they’re evicted because they can’t afford their rent.”

The low wages in Orlando have a lot to do with one of the biggest economic drivers in the region: tourism. In 2017, the state’s tourism industry raked in $86 billion. Central Florida alone accounted for $35 billion, making it the biggest contributor in the state, says UCF Assistant Professor Amy Donley ’02 ’04MA ’08PhD.

“This area has an image as the No. 1 tourist destination in the country and internationally, which is well deserved. But there are so many people in our community that are struggling,” Donley says. “Our reliance on hourly wage jobs doesn’t allow incomes to match our rent prices or just the cost of living here.”

About 280,000 hospitality workers across the metro Orlando- Kissimmee-Sanford area make up the region’s largest workforce. These workers have a median hourly wage of $13.60. But adults in Orange County need to make at least $25 an hour to support themselves and one child, according to the Massachusetts Institute of Technology’s living wage calculator.

“You look at places like San Francisco, which is well known for having exorbitant housing prices, but their median income is so much higher because there are so many high-wage workers there,” Donley says. “We’re dealing with a larger base of lower-wage workers, so raising wages is essential to help the affordable housing problem. Every person should be able to afford housing, to eat and to get to work.”

Filling the Missing Middle

One solution that Orange County is implementing is the recently approved Housing for All Task Force’s 10-year action plan, which UCF Assistant Professor Chia-Yuan Yu helped develop. By 2030, the goal is to preserve and create 30,300 affordable housing options. In December 2019, the Orange County Commission approved a $160 million housing trust to support the plan.

Within the task force, Yu served on a committee that analyzed the region to determine the best locations to create new housing, which would include single- and multi-family homes, multiplexes and townhomes. They see the “missing middle” as one of the best options for these developments.

“Orlando is urban-sprawl development, so regions like Lake Nona and downtown Orlando are far away from each other,” Yu says. “Instead of continuing to build sprawling developments, which make it more difficult to access jobs because Orlando doesn’t have a mass transit system, we are looking to utilize the space in between existing ones to fill the vacant land — the missing middle.”

Preserving Communities

While locals wait for tens of thousands of residences to be built in Orlando’s missing middle over the next decade, thousands are already popping up in the city’s downtown community as the region tries to address its current 60,000 housing unit shortage, according to Brewer.

“I do feel like there’s a lot happening so fast,” Frazier says. “Just driving through the neighborhood every day, you see different properties being built and how downtown is developing. From my hometown in Miami I’ve seen what happens when the city goes in and uplifts a community and that can lean toward gentrification.”

Last year, the Central Florida Foundation created the Central Florida Regional Housing Trust (CFRHT) to address this concern by preventing home and rental prices in the area from potentially rising after the opening of UCF Downtown. From CFRHT’s inception, UCF faculty and staff have worked with the organization to develop plans that protect the community’s already existing residents.

“However much housing we build here, with 1,500 people a week moving here, we would never build our way out of the affordable housing problem,” Brewer says. “We have to find ways to repurpose and reset the market to allow access to housing for the talent pool of people living and trying to work here.”

To begin accomplishing this, the CFRHT partnered with the Florida Community Loan Fund and New Jersey Community Capital to create the Parramore Asset Stabilization Fund. By May 2020, the fund will provide refurbishments for 83 occupied homes in the community. The residents in these homes were also given new annual leases with an average rent of about $600 a month with a guarantee their rent won’t increase by more than 2 percent a year for the next 10 years.

“UCF was very much one of the founding partners of the concept that ultimately became the Parramore Asset Stabilization Fund because the university wants to be a good partner in the community,” says Rob Panepinto, UCF’s director of Innovation Districts Strategy and Partnerships and chair of CFRHT’s Housing Action Team (CFHAT).

“As the Creative Village is expanding, there are concerns about folks being pushed out of their homes, and we want to make sure we minimize that impact as best we can.”

Had the trust decided to entirely rebuild the homes, the average rent would have needed to be double because of the cost of construction, says CFRHT CEO Frank Wells.

“We talk a lot about new construction, but it actually costs close to $200,000 to build a new unit these days in this region,” Wells says. “We need to talk about how we preserve things that are already affordable because it’s certainly cheaper to buy and rehab something than it is to build something new.”

A Place Called Home

Both Wells and Panepinto, among other experts, recognize that no single government program, action plan or housing trust has the resources needed to solve Orlando’s housing crisis.

“The reality is we collectively are probably going to need to do a hundred things, and when you add them all up, hopefully they’ll have the impact we all want on the community,” Panepinto says. “This is an issue that needs the public, business and philanthropic sectors working together effectively.”

To facilitate these partnerships, CFRHT created a $100 million fund through the CFHAT to incentivize private developers to build, renovate or save 25,000 affordable homes over the next decade. As each neighborhood is unique, Wells says it will take a lot of time and work to create appropriate solutions for each one.

“I think that we should feel hopeful about affordable housing solutions in Central Florida because now you’re seeing more strategic initiatives around this issue that we didn’t see two or three years ago,” Panepinto says.

Despite the troubling conditions around housing in Orlando, those who live and move here know there’s immense potential for a better life in this community as public and private institutions work together to solve the problem.

“Now that I have a place I can afford, I don’t see anything trying to pull me away from Orlando at all right now,” Frazier says. “So it’s really nice to come home every day to a place I can call my own.”