City hoping to streamline, incentivize construction to address affordable housing shortage

The City of Ocala is considering changes aimed at streamlining the affordable housing application process and incentivizing construction.

During Tuesday’s meeting of the Ocala City Council, Senior Planner/GIS Analyst David Boston provided details on the proposed ordinance, which is the first filed for the city’s new fiscal year.

“We’ve acquired a little over $1.1 million dollars in the fund to date. We, along with pretty much every jurisdiction in the country, have an affordable housing shortage. It’s a national phenomenon at this point. Being able to leverage these funds and put them to good use to try to address that problem is in the city’s best interest,” said Boston.

Ordinance 2020-1 will amend and simplify the provisions of the housing incentive fund, amend the affordable housing density incentive, and repeal outdated provisions of chapter 106. The changes are an effort to incentivize the development of affordable housing by simplifying the eligible projects and process for approval, removing income qualification, adding guidance for how the internal review board should review proposals, and adding the ability for City Council to enter into affordable housing agreements or affordable housing loans.

“What this amendment does, is tries to make it so that we can leverage this fund more effectively, even in times when the market is booming,” said Boston.

Boston indicated that part of the problem was that the city was not constructing enough units and that by removing the income qualification, the city could start making headway with a larger variety of projects.

“Right now, it makes it so that we have different amounts that we can spend on different types of work in different units,” said Boston, who went on to suggest that more of a focus needed to be placed on single family units and on rehabilitating existing units.

“The other big thing this does is that it opens this up so that we can leverage this fund to be used in state and federal grants,” said Boston.

The Florida Housing Coalition found that of an estimated total of 38,340 households in Ocala, approximately 5,248 households are low-income and severely cost-burdened, meaning they pay more than 50% of their income for housing. A high number of severely cost-burdened households hurts the local economy because those households have significantly less disposable income to support local businesses.

Additionally, the coalition found that medical and retail workers in Ocala and Marion County do not earn enough to rent a modest apartment or buy their first home.

Analysis and reporting by city staff found that a significantly higher proportion of the city’s renter-occupied households (31%) are severely cost-burdened than the city’s owner-occupied households (10%), signaling a greater need for additional affordable rental units in the Ocala market. Only 24% of renter-occupied households are severely cost-burdened nationally.

The city’s existing affordable housing incentive fund accrues money from new development that takes place in the city, and is intended to incentivize the development of affordable housing by offsetting some of the associated costs. The fund, which has existed since 2005, has consistently accrued more money than is spent since 2011.

However, no money has been spent from this fund since 2016. Last summer, City Council amended the provisions of the housing incentive fund by increasing the maximum distribution per unit, broadening the types of fees that the fund can be used for, encouraging mixed-income development, increasing the affordability period, simplifying the lien process, and allowing for a density bonus for affordable housing development projects.

After hearing about proposed changes to the new ordinance, city council members unanimously decided to separate the changes into another reading before approving the ordinance as it was presented.