The search for affordable housing

There is a huge demand and small supply in Okaloosa County

Tony Judnich

Okaloosa County Growth Management Director Elliot Kampert recently posed an intriguing question after looking at a map of the county, including the more than 460,000-acre Eglin Air Force Base that dominates its south half.

It’s a question that goes to the very heart of the local housing supply and demand, and who can afford to live close to the coast.

“How many Mary Esthers, Fort Waltons, Destins and Nicevilles could you squeeze into Eglin?” Kampert asked. “There’s just not that much land left. We are essentially built out south of Eglin. And a lot of areas are gentrified.”

Fort Walton Beach City Manager Michael Beedie shared similar thoughts.

“Our biggest problem down here is we’re landlocked,” Beedie said. “We’ve either got to grow up or out through annexation. But large-scale annexations are not in the cards for us.”

During the last housing boom more than a decade ago, “the trend seemed to be condominiums, and if you go along Brooks Street that’s all you see, you see a lot of condos,” he added. “That’s what everybody wanted back then.

“Well, now, housing prices are up again,” Beedie continued. “People are willing to pay higher prices to live here and, unfortunately, that drives the market up, which drives the affordability down. It’s to the point where your typical worker just can’t afford to live in the city. And that’s why you’re seeing a lot of them move up to Crestview and north of the base.”

Beedie cited a recent local economic overview provided by the Haas Center for Business Research and Economic Development at the University of West Florida in Pensacola.

This report showed that in 2018, most employees in Okaloosa County worked at jobs located within Fort Walton Beach’s zip code of 32548.

But of those 21,160 workers, only 10,680, or slightly more than half of the total, lived there. That means that the No. 1 zip code for employment ranked fifth for resident workers, behind the zip codes for Ocean City/Wright and Niceville and two zip codes for Crestview.

“What we need, and we’re going to do a market study hopefully in the next year, we need apartment units,” Beedie said. “I believe that because we’re a transient community, or an area with the military, I think a lot of people want to rent. Trends we’ve heard say a lot of the younger generation would rather rent than own.”

Another recent trend, Kampert noted, is that many people reinvesting in and improving their fixer-upper residential properties, which raises their property values.

“On one hand, that’s great,” he said. “But on the other hand, it’s not creating a supply of affordable housing. It’s kind of market-driven. We have a big demand for property, particularly south of Eglin because it’s where the big employment centers are. The main gate for Hurlburt, the main gate for Eglin, all the tourism jobs in Destin: Everything is down south here.”

From 2011 to 2017 in Okaloosa County, the number of rental units that cost less than $800 dropped by 9% while the number of low-income renters — those with household incomes below $32,000 — rose by 8.4%., according to data from the Joint Center for Housing Studies at Harvard University.

A place called home

Under the “affordable” housing definition by the U.S. Department of Housing and Urban Development, not more than 30% of household income should be spent on housing.

Families that pay more than 30% of their income for housing are considered “cost burdened” and might have difficulty affording necessities such as food, clothing, transportation and medical care, according to HUD.

“I cannot give a house to anybody if that house cost burden is going to go over 30%,” said Nitsi Bennett, president and CEO of Habitat for Humanity of Okaloosa County.

According to HUD, an estimated 12 million renter and homeowner households throughout the nation pay more than 50 percent of their annual incomes for housing.

Those figures don’t surprise Bennett. She provided statistics that show 17 of the 62 families now seeking a Habitat home in Okaloosa County are unable to afford their current housing unit.

Also, 20 families must live with other family members or friends, 12 are Section 8/public assistance clients, seven live in overcrowded conditions and six live in substandard conditions.

Almost one-third of the 62 applications were denied because of the applicant’s poor rent payment history, bad credit or not having enough income to meet guidelines. Most of the applicants who are currently renting have trouble paying their utility bills, Bennett said.

As a reflection of the local housing market and property values, more than half a dozen of the last Habitat homes built in the county have been built in Crestview, and two are being built there now. Property is cheaper there compared to Fort Walton Beach, Bennett said.

She said the last lot Habitat bought in Fort Walton Beach was one on Carson Drive that was purchased from the city for $48,000. In Crestview, she has been able to buy lots for $10,000 each.

“You want to build in Fort Walton Beach because the jobs are here,” Bennett said. “But there’s no way I can buy more lots for $50,000 each.”

Habitat for Humanity has built more than 60 homes in the county since the early 1990s. Some of them are in Fort Walton Beach, but there are none in Destin, where lots often are even more expensive.

Most monthly mortgage payments on a Habitat house are about $500. The buyers are not charged interest.

Bennett said each of the more recently-built Habitat homes in Crestview shelter former Fort Walton Beach residents who could no longer afford to live there.

“There are a lot of jobs, but not enough housing for the workers,” she said. “It’s sad. They’re driving all the way down (to the south county area) for work.”

Kampert sees the situation as sort of a Catch-22.

“If you’re looking for cheap, affordable land, you end up out in the hinterlands somewhere,” he said. “Now, you’re going to need good reliable transportation to get to any kind of a job. And if the job producers are like the tourist industries and the service industries, usually that means driving down to Destin or Fort Walton Beach, and there’s your traffic. 

“Plus, if we’re talking about the kind of person who really needs affordable housing, chances are they’re not driving an electric car. They’re probably not driving a brand new hybrid. They’re probably driving something they picked up fairly reasonably which is probably not getting the best gas mileage in the world. So, that becomes a cost of their living as well.”

More housing

Beedie noted how developer Jay Odom is leading the development of a massive mixed-use project that will include almost 300 market-rate apartments on Lewis Turner Boulevard in Fort Walton Beach.

The 52-acre project, known as Freedom Beacon Park, will be built at 1900 Lewis Turner Blvd., just west of the Okaloosa County Courthouse Annex Extension.

Odom “did a study and he’s not even coming close to what the demand is for that type of housing unit,” Beedie said.

He said the 200-unit SoundSide Apartments on Carson Drive has had a waiting list of hopeful tenants ever since the complex opened in 2014. The city partnered with the Fort Walton Beach Housing Authority to build the apartments.

“That’s considered affordable housing, but it’s a market-rate apartment complex,” Beedie said. “I believe if we built complexes like that throughout the city, they’d be full before they even opened.”

Overall, the demand for housing in Fort Walton Beach “is so high we just don’t have the inventory to match the demand, which drives the prices up,” Beedie said.

One of the city’s visions for its downtown area, however, is to see the development of a couple of large apartment complexes, which could be part of a larger redevelopment project and cater to people who want to live within walking distance of stores, restaurants and entertainment.

And, possibly sometime next year, the city could begin requiring downtown properties undergoing redevelopment to build at a three-story minimum, with the goal being to maximize space and have mixed-use with retail/commercial/office downstairs and residential units upstairs.

“The city definitely does not want to get in the development business or the real estate business, but I think we can be a partner” to provide affordable housing, Beedie said. “It really comes down to the developers. If they’re willing to work with us, maybe we can provide incentives or be an active partner in developments to keep housing prices down.

“I’ve always talked about a potential neighborhood redevelopment program, but that just hasn’t been one of our focal points in the past. My vision for that is maybe the city can go and buy properties and then partner with developers to build either multi-family units or true affordable single-family homes.”

Military effect

Bennett said the Air Force increased its off-base housing allowance a couple of years ago because there were not enough housing units on base.

When that happened, she said, “Everybody’s rent went up, because (landlords) knew locals might not be able to afford it, but the Air Force can.

“I have nothing against (Air Force members). They’re my lifeblood, because most of the squadrons are the ones who come out to build these (Habitat) houses. But that’s what happened. The rental rates will never go down. Even during the time when the market dropped, they didn’t go down. Landlords got used to making $1,100 on rents that used to be $600.”

Having the “relative affluence” of the military in the county certainly has an effect on the local housing supply and housing costs, Kampert said.

But, “As far as working with the military to redo its housing voucher program, that would be a hard sell to the military, which I think would look at it as taking money out of the pockets of personnel,” said Kampert, who added it also would be a hard sell to local landlords.

When it comes to incentives to provide affordable housing, Bennett said the city of Crestview helps find land and rezone properties for Habitat homes, while the county waives its permit and impact fees for new Habitat homes. She said the county also has donated land for Habitat houses.

Kampert said the overall set of county incentives includes an expedited permitting process and flexible design standards and setback rules for developers who build affordable housing.

However, “The incremental value developers get (from constructing affordable housing) compared to building large expensive homes just isn’t there,” Kampert said. “And I’m not criticizing; they’re in the business to make money. It’s almost a strange irony: There’s a need for affordable housing, but there’s not the kind of demand that translates to a market response.”

The city of Fort Walton Beach does not yet have incentives for builders to provide affordable housing, Beedie said.

“We’ve talked in the recent past of maybe relaxing things like our tree ordinance if it’s a true affordable housing development, and we would definitely look at setbacks and other things to maximize the use of properties,” Beedie said. “It’s just not something we’ve taken to that level yet.”


Rental properties are few and far between