Habitat Faces Own Affordability Crisis: Cost of Land

ORLANDO, Fla. – Single mother of two Ebony Dennis lived in the same condo for 11 years until last year when her rent shot up by $400. The fear of not being able to afford rent if it kept increasing and the desire for stability led her to apply for a second time to Habitat for Humanity of Greater Orlando and Osceola County’s homeownership program.

Dennis, who is working toward an associate degree at Valencia College, is employed as a call center supervisor.

In February, Dennis, 40, closed on her affordable three-bed, one-bath home constructed by the nonprofit.

“I would have been able to pay it but I wouldn’t have much to fall back on if any emergencies or something extra may have come up,” Dennis said of the rising rent. Dennis said she had applied for low-income housing when money was even tighter but she, like many others struggling to afford a home, made too much money to qualify.

“I did apply for those programs years back, and making at that time like $14 or $15 an hour with two children, and that was still considered too much money,” Dennis said.

For people like Dennis, Habitat and other nonprofits build affordable housing that fits their earnings. But nonprofits are running short of land on which to build affordable housing. They have enough land to build about a quarter of the need from renters and owners in Osceola. That’s left nonprofits looking for ways to acquire more land, which is proving challenging as land and home prices continue to climb.

Lake, Orange, Osceola, Seminole and Sumter counties are running a deficit of 41,140 units for those looking to buy affordable units, according to data from the Shimberg Center for Housing Studies at the University of Florida.

Habitat is facing a shortage of land that could derail the nonprofit’s ability to build affordable homes, said Lucie Ghioto, vice president of planning and construction at Habitat for Humanity of Greater Orlando and Osceola County. Habitat relies on land donations from private firms and local governments and purchasing available land.

“The volatility in the real estate market over the last several years has gotten to a point where acquiring land has become exceedingly difficult, particularly for affordable housing developers,” Ghioto said. “I think it’s a combination of the high cost of land that’s developed and a lot of this is just being driven by competition in the market for real estate.”

Currently, the nonprofit home-builder has only two years of land supply left and is already running at a deficit, Ghioto said. Habitat is aggressively campaigning to let people know how little land supply they have left, she said.

“We can’t build if we don’t have land unfortunately, so that’s why we’re being so aggressive now rather than waiting until we completely run out of property,” Ghioto said. “We do have thousands of new residents coming to the state every week and we have much less land available than we have people so it’s just an overwhelming demand.”

The nonprofit is looking for larger land to build affordable subdivisions that could cost upwards of $5 million to buy and build on but will settle for smaller land tracts to build single-family homes because the need is so great, Ghioto said.

“This should be a primary conversation within every employer who needs to find affordable housing for their workers and it should be a conversation that every local government is having now on how to be a part of the solution,” Ghioto said.

President of the Catholic Charities of Central Florida Gary Tester said the nonprofit has 51 affordable living units for seniors in St. Cloud. Currently the nonprofit is in the process of creating more affordable housing from the ground up on vacant land that is already owned by the Catholic Dioceses of Orlando. Purchasing new land for future affordable housing is difficult, not only due to the large costs of land. Where that land is located is important, too.

“When we consider affordable housing, we want to make sure that that housing has access to transportation, access to education, access to food and grocery and medical,” Tester said. “You have to find a property that would lend itself well to the creation of affordable housing.”

Tester said there have been many instances where the nonprofit has the funding to help a family but cannot find housing for them. The charity has over 500 units of affordable housing but the waitlist is over a year-and-a-half long, Tester said.

Community land trusts

Local governments and nonprofits have been using community land trusts to keep land and whatever is built on it affordable for 99 years.

Ashon Nesbitt, CEO of the Florida Housing Coalition which helps nonprofits statewide establish community land trusts and created a non-required certification process, said this method of keeping affordable housing will have a big impact.

“I think the key is having that local government connection is what’s going to build the scale of them,” Nesbitt said. “The issue is and why they’re very attractive is because communities want a permanent stock of affordable housing.”

Nesbitt said community land trusts will deliver long-term solutions to the affordable housing crisis but the effects won’t be felt today. “The impact will be felt decades from now when that house or those apartments are still in the affordable stock whereas before they might have been lost,” Nesbitt said.

Frank Wells, Bright Community Trust president and chief impact officer, said nonprofits, like his, get land donated by a county and build a home on it. Then, they establish a trust on the land that keeps the home affordable for 99 years no matter who owns the home.

The big challenge is being able to find available land, Wells said.

“There are other ways than just land that’s already owned by a city or county getting donated that can help create more homes,” Wells said.

Nonprofits can buy and rehab houses and establish a trust on the land. Even that’s difficult in today’s market because purchasing the homes is so expensive that establishing a trust doesn’t make sense, Wells said. The large cost of just one home diminishes the ability for nonprofits to purchase more homes and help more people, he said.

Shift in focus

Another challenge: the shift in focus of county and local governments in the aftermath of COVID-19 to rental assistance and eviction prevention instead of donating parcels of land to nonprofits for long-term affordable housing, Wells said. Despite the struggles of finding housing and land, Tester said in post-COVID-19 he has seen an increase in funding from local governments due to the American Rescue Plan Act, which granted local governments millions to aid in pandemic recovery.

Osceola County received nearly $73 million in ARPA funding and over $35 million of the funds went to county infrastructure including the possibility of land acquisition for affordable housing, according to a 2022 State and Local Fiscal Recovery Funds report. The projects for infrastructure are still in the planning and development phase, according to the report.

While the acquisition of land to build affordable housing has yet to begin, Osceola county commissioners have been actively working on affordable housing initiatives through partnerships. District 1 Commissioner Peggy Choudhry said the commissioners are working on affordable housing initiatives in different sectors of the community that need help.

“It’s just that it’s not fast enough, it’s never fast enough … because we’re growing at such a fast pace … so it’s difficult to keep up but we are trying and we’re going to continue doing it,” she said.

Choudhry is partnering with the Salvation Army’s new program called Pathway to Housing. In May, she granted $500,000 in funding to the program, which is set to launch in late March or early April. The program will help participants with down payments and teach financial literacy to guide them to homeownership within 12 to 18 months, said Andrea Ruiz, the director of services for the Salvation Army of Osceola County, in an email.

“Rent will be paid for the families for up to a year, allowing participants to save what they would have put towards rent as a down payment on their own home,” Ruiz said. “As they work with a case manager and save their money, the kids are also learning these skills to better their chances of financial stability and sustainability, therefore, breaking the cycle of poverty.”

The program will match what families are able to save, Ruiz said.

Choudhry said the program has no barriers and works to help those often forgotten in the affordable housing crisis who make too much money to qualify for low-income housing but not enough to buy a home in today’s market.

“It’s more so like we want to make sure that we’re meeting the goals of everyone because today we have teachers, firemen, police, everyone that’s struggling,” Choudhry said.

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