Millennials in Sarasota and Manatee Counties are being squeezed out of the housing market by high prices. While many are finding creative solutions for attainable housing, some are leaving the market all together.
Rob Barto’s job is to make Manatee County a better place to live.
As a neighborhood services specialist for Manatee County government, the 23-year-old helps organize fun events such as “cosmic shuffleboard” and “MillennialCon.” He helps connect neighborhoods to parks and public transportation.
But even though he works to attract people to the county, Barto can’t afford to live there. Instead, he commutes about 40 minutes each day from the city of Gulfport, just north of the Sunshine Skyway Bridge in Pinellas County.
Barto is one of many young people who have left, or who are thinking of leaving the area, because of the high cost of housing.
A unique survey sponsored by Unravel, the Manatee Millennial Movement, the Manatee Chamber of Commerce’s Young Professionals and the Greater Sarasota Chamber’s Young Professionals’ Group found that half of young adults ages 18 to 40 in Sarasota and Manatee counties say they are considering leaving the area because of the cost of housing alone.
Half of young adults surveyed also said that they spend 30 percent or more of their monthly incomes on housing, meeting the definition of housing-cost burdened. More than one in six said they pay 50 percent or more of their incomes on housing — meaning they are severely housing-cost burdened.
Statistics from the University of Florida’s Shimberg Center for Housing Studies show millennials are the most housing-cost burdened generation in the area. While about half of millennials fit that definition, only about 30 percent of those 65 and older in Manatee County do. About 34 percent of 65 and older residents in Sarasota County are housing-cost burdened, Shimberg reports. For adults ages 45 to 64, about two in five are housing-cost burdened in both counties.
But Unravel’s survey went further, asking questions ranging from participants’ line of work to what brought them into the area to their maximum housing budget each month.
More than 570 people of all ages took the survey, including 361 adults ages 18 to 40.
Among the survey’s findings for that last group:
■ More than 62 percent said they make $45,000 or less each year. With a salary of $45,000 a year, a rental or mortgage payment would have to be less than about $890 per month to be considered affordable. If someone makes $35,000 per year, the monthly rental or mortgage payments would have to be less than $703 per month to be affordable.
■ 57 respondents, or about one in six, said they were living rent-free or with reduced rent because they reside with parents or other family members.
■ Among those who are not living with reduced rent or rent-free by staying with family, the average price paid for a rental or mortgage was about $1,052 per month, the survey found.
About our survey:
Younger people consistently ranked four factors as the most important when looking for a house: affordability, safety, on-site laundry and central air-conditioning. Many said they would go without perks such as pools or ample parking to live in a safe, affordable building.
Some people commute from as far away as Largo in Pinellas County and Charlotte County to work in Manatee and Sarasota counties.
As local government leaders in Manatee and Sarasota discuss the lack of affordable or attainable housing in the area, millennials have been bearing the brunt of the problem for years.
Barto said he moved to Gulfport, which is about a 10-minute drive from downtown St. Petersburg, because the rent was significantly cheaper than units in Sarasota or Manatee. He pays $565 for a second-floor studio complete with separate living and sleeping spaces.
“I was surprised that living up here was so much less expensive than down there. I didn’t think Bradenton was a super-desirable area, but it’s just different crowds and a different market there. They can charge a lot more because a lot of the people moving there are retirees that can afford it,” Barto said. “Four or five of my coworkers live in the same Carlton Arms complex and the waiting list to get in there is over a year long. There’s just not enough places to live that we can afford.”
To make ends meet, some, like Barto, commute more than 30 minutes to live in more inexpensive areas. Others put off saving for a house or retirement to afford rent payments.
But half of the young people in the area — those working as teachers, for local government, in health care, in restaurants and bars, for small local businesses, for companies such as Venice’s Tervis Tumbler, Sarasota’s Boar’s Head Provisions Co. Inc. and Bradenton’s Tropicana Products Inc. — are struggling.
How we got here
Part of the blame lies with the Great Recession.
While it was much cheaper to buy a house after the downturn, rents stayed relatively high. Foreclosures and a lack of credit pushed more former homeowners into the rental market, breeding more competition for few units.
Wages have stagnated since the recession, but the cost of buying or renting has increased dramatically, largely because the supply of multifamily properties has not kept pace with demand. Little government funding is available for multifamily projects and developers find it very difficult to secure loans from banks because such housing is among the least lucrative development options.
The demand for rentals has been driven not only by younger people looking for housing but by other renters displaced from their homes by the housing crisis.
In the wake of the downturn, home prices dropped. But as the region has recovered, prices have risen again toward their boom-time levels.
As recently as 2011, the median single-family home price in Sarasota County was $190,000. During the first three months of 2016, it was $250,000. Manatee County saw an even larger price surge, with the median price jumping from $189,800 in 2011 to $279,300 in the spring of 2016.
While the housing market in Florida has rebounded, the homeownership rate is near historic lows.
In 2005 and 2006, Florida had a rate of 72.4 percent. In 2015, that number shrank to 64.8 percent, only 0.4 percentage points more than Florida’s lowest recorded homeownership rate: 64.4 percent in 1989.
Those numbers are higher in Sarasota and Manatee counties — where homeownership rates in 2014 were 75.2 percent and 72.1 percent, respectively.
Many of those homes are owned as vacation dwellings, seasonal houses and investment properties.
About 60 percent of condominiums in both counties are owned by people who do not live in them full time, according to the Shimberg Center’s Data Clearinghouse. More than one third of single-family homes in Manatee and Sarasota counties are owned by people who do not live in those homes full time.
So in addition to competing with older renters who faced foreclosure, local millennials also must compete to buy or rent homes or condos with people who only spend winters here.
Those factors create a perfect storm for younger adults looking to rent or to save up for a first home, said Anne Ray, the Florida Housing Data Clearinghouse manager at the Shimberg Center.
“So you have rents going way up during the boom and staying high, and then you have incomes stagnating in the wake of the recession, so that widens the gap,” Ray said. “It’s a competition for a limited amount of real estate, and there’s a premium to live in a place with a beach and those types of amenities.”
At the same time, local government plans regarding housing have not been updated in years. Manatee County, however, is beginning to rewrite its land development code to encourage more urban redevelopment, which could lead to more affordable housing.
Sarasota County’s 2050 comprehensive growth plan was approved in the 2000s, though it was changed in 2014 and again more recently because of County Commission actions.
The comp plans, and specifically their housing chapters, include regulations that dictate how many units can be built per acre, incentives for building affordable housing, parking requirements and other stipulations.
For example, in Manatee County, developers must dedicate 25 percent of a new development’s units to affordable housing to receive county incentives such as closing-cost assistance or a set-aside for down payments.
A few years ago the city of Sarasota increased building densities in the Rosemary District to 75 units per acre, in the hopes that it would make it more affordable for developers to build new housing there. There were no requirements that any of the units be affordable to those making 80 percent to 120 percent of the area median income, which was $62,300 in 2015, according to Fannie Mae.
City leaders hoped the increased density and savings seen by developers would be passed on to renters and condo-buyers in Rosemary.
But the cheapest condo for sale last month among the units going up in the Rosemary area was $350,000 for a 749-square-foot, one-bedroom unit at the Risdon on 5th. That would cost $1,655 per month with a 30-year mortgage, if the buyer had $35,000 for a down payment. Someone would have to make nearly $90,000 annually to afford those monthly mortgage payments and not be housing-cost burdened.
The cheapest rental? It was $995 per month for a 572-square-foot studio, meaning someone would have to make more than $50,000 annually to afford the rent there.
City officials have known about the affordable housing crisis for more than a decade.
In 2006, Sarasota city leaders contracted with Economics Research Associates to study downtown’s density bonus and attainable housing policy. It found that the city of Sarasota had no concrete plans to tackle the problem with anything other than density bonuses. And those bonuses did little to provide more affordable housing.
“This analysis leads to the conclusion that under current and foreseeable market conditions, even a significant density bonus is unlikely to result in new development of attainable units downtown,” Economics Research Associates wrote in the study. “As housing becomes increasingly unattainable for these community’s residents, they will seek jobs and homes in less expensive locations and Sarasota’s economic health and sustainability will be negatively affected. Despite this situation, Sarasota’s existing planning policy framework, including the Sarasota City Plan, (does) not directly address the issue of attainable housing. While a relatively new planning policy, the Downtown Residential Overlay District (DROD), has successfully led to new residential development in the downtown, it has not resulted in any attainable housing.”
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Economics Research Associates determined that the city needed to mandate that developers dedicate at least 10 percent of all new developments to affordable housing to help with the problem. Those units would have to be affordable and available to those making 120 percent and less of the area median income.
That stipulation would have applied to all developments that had 10 units or more, if the city had voted for it. But when the city updated its housing code in 2006, it included nearly all of the study’s recommendations except for the required affordable housing units.
The housing code has not been updated since.
Manatee County and the city of Bradenton also do not require developers to dedicate a portion of new neighborhoods to affordable housing.
Only Sarasota County has such a requirement, but it has been rolled back in recent months and years.
In September, the county altered its comprehensive plan and land regulations to allow the developer of a planned residential community in east Sarasota to reduce its affordable housing requirements from 50 percent of the project to 15 percent. The vote wiped away as many as 200 homes considered affordable to average area residents.
The county balked at its requirements in 2007, too, when Benderson Development Co. agreed to affordable housing stipulations to gain approval to build the $315 million Mall at University Town Center. At the time, the company promised to build as many as 437 homes that would be affordable to middle-income buyers.
But when the Great Recession crimped construction plans, Sarasota County commissioners allowed Benderson to push forward with the retail segment first — and eventually shed the affordable housing element altogether — citing a more pressing need for job creation.
If it weren’t for the $900 in student loan payments that Michelle Williams makes each month, the 30-year-old could probably afford to live on her own.
Instead she pays $300 a month to live with a roommate she’s known her entire life — her mother.
The two share a two-bedroom, two-bathroom apartment near the IMG Academy in Bradenton. Williams said she moved to the area to be closer to her mom and quickly fell in love with the natural beauty.
But one thing surprised her upon her arrival: the price of rentals and homes.
Williams can’t help but compare it to Oklahoma City prices, which is where she lived before moving to Florida.
“You can find a beautiful, 500-square-foot, fully renovated studio apartment and have it for $425, and it was a wonderful community, a safe community,” Williams said. “You cannot find that in this area, but again it is the Florida market in general — everything is going to be more expensive.”
She’s glad she’s here and said she plans to stay. But her student loans, coupled with the local rental market, means she’ll likely be staying with her mother for the foreseeable future. She’s cut back on other spending, too.
“You find areas to cut back in: your lifestyle, you find things that are free, you scour Google, look for ways to have a life when you’re really financially burdened,” Williams said. “And this market really does put a cramp on your style.”
Robert Young also cut back on spending until the young attorney realized he was paying between 40 percent and 50 percent of his income on the three-bedroom townhome he purchased near the University Town Center.
He realized he needed help with the mortgage, so he got a roommate. Then he got another.
None of the three thought they would have two other roommates by their 25th birthdays.
“I for one was thinking that I’d be settled down by the time I was 25 and that I would have a roommate, but just the one,” Young said. “But there wouldn’t be any need to have another roommate between having two incomes and having two people fully committed to a place.
“But, looking back even now, that’s probably not possible with just one other person.”
Young had two options in homes when he began his house hunt a year ago — either buy new construction or a home that was more than 10 or 15 years old. There was nothing in between.
Anne Ray, the manager of the Shimberg Center for Housing Studies’ Data Clearinghouse, said that’s the case across Florida. While there are many new homes and rentals, most that have been built along coastal areas have been high on price and loaded with amenities.
“And we’ve developed a lot of new rental housing units in Florida from the boom time on, but it’s been higher-end rental housing,” Ray said. “It really hasn’t been adding to the affordable housing supply.”
The cash effect
There is clearly a demand for affordable units in Southwest Florida and across the state. So why isn’t that demand being met?
Sean Snaith, an economics professor at the University of Central Florida, said the constant flow of wealthy retirees and others moving to the area from out of state means developers can keep building expensive units knowing they will have a buyer who can afford the prices.
Many of them pay for their homes up front in cash. More than 51 percent of all homes in Sarasota and Manatee counties were bought with cash during the first quarter of 2016, well above the national average of 33 percent. Those who cannot afford to pay for their homes outright are at a disadvantage.
“I think this phenomenon is the dirty underbelly of the strength of Sarasota’s economic recovery post-financial crisis,” Snaith said. “Rapid price appreciation recovered lost equity for owners that purchased before the bubble collapsed. But the flip side is as prices continue to rise, and they have been increasing at a significant pace in Sarasota, this segment of the population is bearing these adverse consequences. They don’t have a big financial portfolio they can liquidate and use to pay cash like many retirees can, even though the retirees are buying snowbird nests that are only used a few months a year. But that means those units are unavailable for someone local to buy.”
“This is an issue in a lot of major metro areas.”
Snaith said that means workers such as teachers and firefighters and lab technicians have to be more creative with their housing. Some share a home with three others in their age group. Others live with family or parents. Many already likely have and will continue to move to the outskirts of communities where housing is typically more affordable. But that means those folks will be spending their money in those outlying areas, not in urban areas like downtown Sarasota or Bradenton.
He compared the area to Jackson Hole, Wyoming, a popular vacation destination. Many of the workers there commute from nearby Idaho or other towns because the cost of living in Jackson Hole has become exorbitant. That means those workers are spending their money in Idaho where they live, even during the area’s slow season.
“I don’t think what happens is suddenly no one is working at the restaurant or there’s no one available to draw blood at the lab, but if these places can’t get workers at wages they’re offering, there’s going to be upward pressure on wages until they can induce someone to come,” Snaith said. “That means basic services could become more expensive as workers require more in wages to be able to afford homes here.”
The lack of affordable housing, combined with stagnant wages of entry-level workers and many others, is already exposing stress fractures in the community.
The Manatee County government found it would not have enough young workers to take over for retired county government staffers after it completed an internal survey in 2015.
As community leaders debate the problem, Williams said she already sees young professionals voting with their feet.
“We’re going to see individuals leaving, and they’re already doing so,” Williams said. “It’s difficult to say we want growth in this area, but we’re not maintaining the longevity of growth with young people, older people and everyone in between. Intergenerational communities must thrive in order for our city to succeed and to continue on the path officials are hoping to lay out for us.”
If there were ever a time to act on affordable housing, it’s now.
Almost every local government in Sarasota and Manatee counties is taking a fresh look at the subject.
Allan Parsons, planning division manager with Sarasota County, said the county’s first step will be to hold a series of meetings this fall and winter.
“There’s a major initiative the County Commission has to actually focus on this topic that’s getting underway,” Parsons said. “There are going to be very extensive efforts to gather community input on a whole range of issues related to this.”
In Manatee, the county has hosted several work sessions seeking community input on affordable housing.
Cheri Coryea, director Manatee County’s Neighborhood Services Department, said staff came up with several recommendations. Among the most ambitious, Coryea said, is a plan to re-purpose surplus county-owned properties into affordable housing units.
One of the buildings county officials are looking at is the old jail building, which has been vacant for 10 years. It’s six stories tall and 80,000 square feet in size. It’s nestled in a prime area of downtown Bradenton, too, about a block from popular bars on Old Main Street.
Coryea hopes at least one developer will respond to the county’s Invitation to Negotiate for a long-term lease of the Judicial Center site, 1051 Manatee Ave. W.
Proposals are due at 4 p.m. Sept. 15.
She said staff will also suggest requiring developers to dedicate a portion of each new development to affordable housing units.
But the things Coryea and other staff members will suggest to the board are just that — suggestions. The board will have to approve each rule before it can be enacted.
“It’s not a huge push forward I think we’re going to be making, but we’re definitely making changes we’ve never made before,” Coryea said. “It may sound like we’re not making much progress, but I feel like we are. One big thing we wanted to accomplish with the board was making sure they were all on the same knowledge level. That’s why we spent time educating them and learning new things ourselves, so when we get to tough decisions like should we have a requirement, should we even change other things in the code, they’re all on the same level instead of one or the other knowing more.”
While local governments are seeking public input on affordable housing, few who are in favor of it show up to government meetings.
Steve Kirk, a Sarasota County planner, said the people who tend to show up to such meetings are typically neighbors of future affordable housing developments who grouse over potential impacts of the new housing.
Rarely, if ever, are there a group of people telling planning board officials or county commissioners that affordable housing projects are wanted and needed, Kirk said.
“We’d like to see people show up and say this is something that’s needed in the county when there’s a question, because most of the development in the county does go through public hearing,” Kirk said. “But we just don’t see that much. We see people show up and say: Well this is going to be a bad thing because it’s in my backyard. But we don’t see people showing up and saying this is a good thing for the community. I think it would be great to see that happen.”
Changing the narrative
Changing the narrative on what affordable housing is, and who it serves, is another crucial step.
Many people see it as only necessary for the unemployed and the underemployed.
Unravel’s survey shows that’s not the case.
Twelve out of 23 respondents who said they worked in education also said they paid 30 percent or more of their income on housing. So did 15 of 29 in the medical field.
Only two of the survey’s respondents between the ages of 18 and 40 said they were unemployed.
Steve Kirk, a Sarasota County planner, said the stigma attached to the words affordable housing is enough to stop some projects in their tracks.
“Just the word affordable housing can trigger awful images in the average citizen’s mind, when that’s not really the case,” Kirk said. “It’s your child that needs affordable housing when he graduates from school.”
Affordable housing is for people like Robert Young and Michelle Williams and Robert Barto. It’s for teachers and police officers and nursing assistants. It’s for entry-level workers fresh out of college and for service industry workers who prepare our food and drink.
It’s for young people who want to live in this community, but who increasingly can’t afford to.
“Affordable housing is an issue for everybody,” Coryea said. “That’s your single most important thing in your life is where you reside. It makes the most positive or negative impact on other things.”