Palm Beach County commissioners nearly killed two West Palm Beach apartment complexes for low-income residents after learning that the construction cost per apartment for one complex is nearly $500,000.
But after a 90-minute discussion on May 6, commissioners reluctantly approved cash infusions for both complexes because the two nonprofit sponsors — the Palm Beach County Housing Authority and Neighborhood Renaissance — had already spent millions of dollars and that cost overruns they experienced were beyond their control.
“I’m appalled,” Commissioner Sara Baxter said at the meeting, noting a single-family home can be purchased for that amount.
“This is not sustainable,” added Commissioner Marci Woodward. Those two along with Commissioner Maria Sachs said they may oppose proposals with such high per-unit construction costs in the future.
Legacy at 45th Street near Cacti Park of the Palm Beaches hit by design change, FPL costs
One of the complexes is Legacy at 45th Street near Cacti Park of the Palm Beaches, the spring training home of Major League Baseball’s Washington Nationals and Houston Astros. Developed by the county housing authority, it will have 48 apartments, 34 of them county-assisted.
The per-unit cost at Legacy is $438,541.
The authority initially projected Legacy to cost $16 million, but it now expects the cost to rise to more than $21 million. It was required to begin construction by October 2023. It held a groundbreaking in February 2024, but nothing has been done besides demolishing the former authority office building.
Initial authority plans had relied on the use of steel containers. When the contractor failed to deliver them, the authority had to redo its plans and will now build a more expensive modular-type building. Another factor was Florida Power & Light Co.’s call for underground electric lines.
“I don’t have $1.2 million to finish this project,” said Carol Jones-Gilbert, the authority’s executive director.
She noted that construction projects throughout the county are coming in over budget. She said that without the additional $1.2 million from the county, the project would never be built.
Nearly a third of the cost will now come from the county, a fact that disturbed commissioners. The city of West Palm Beach will contribute another $400,000.
The commission initially voted to deny the housing authority request but reconsidered after learning a $5.5 million contribution from the American Rescue Plan Act was a loan, not a grant, that must eventually be repaid.
County Commissioners Gregg Weiss and Bobby Powell both supported the request, noting the apartments will assist residents in desperate need of housing. Monthly rents for one-bedroom units will be $1,404 and $1,688 for two-bedrooms.
Both figures are 19% below HUD fair-market value. The apartments will be permanently rent-restricted, unlike some other county-subsidized projects that can begin charging market-level rents in 30 years.
For-profit developers are not building these types of apartments, Jones-Gilbert told the commission. She added: “We are trying to fill a void.”
County Administrator Verdenia Baker also supported the authority, noting county funds will be used to put the modular units together once they arrive. “Nothing will be paid until the units are on site,” Baker said.
Residents are expected to move in by the end of the year.
Coleman Park apartments in West Palm Beach hit by large cost overruns
The second project involves Coleman Park Renaissance, a $21.5 million, 43-unit apartment complex proposed for both sides of North Tamarind Avenue near 21st Street in West Palm Beach. The nonprofit sponsor, Neighborhood Renaissance, also experienced significant cost overruns, resulting in a request for $751,076.
The per-unit cost to build Coleman Park Renaissance is $438,541.
Terri Murray, executive director of the nonprofit, said costs escalated because of having to assemble vacant lots in an area “where infrastructure, financial and logistical challenges can be more pronounced.”
Coleman Park Renaissance is being built in a historically Black neighborhood northwest of downtown West Palm Beach. She said it is important that housing be built in underinvested neighborhoods like it.
The development, like Legacy at 45th Street, ran into issues with FPL, which also insisted on underground electrical lines, generating an extra expense of nearly $500,000.
“We have been hit with ever increasing costs,” Murray said. “Contractors are not going to eat these costs.”
Murray said Renaissance offers the county a chance to address Coleman Park’s blight and vacant lots. Rents will be as low as $299 a month, with 12 apartments set aside for households with extremely low-incomes and special needs.
Denying the request could have resulted in a half-finished project along a thoroughfare of West Palm Beach. The commission, however, instructed its staff to ensure that future developments do not have such high per-unit costs.
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Mike Diamond is a journalist at The Palm Beach Post, part of the USA TODAY Florida Network. He covers Palm Beach County government and issues impacting homeowner associations. You can reach him at mdiamond@pbpost.com. Help support local journalism. Subscribe today.
This article originally appeared on Palm Beach Post: Palm Beach County approves two affordable housing complexes despite soaring costs
Reporting by Mike Diamond, Palm Beach Post / Palm Beach Post
USA TODAY Network via Reuters Connect
