Peary Court – Not Adding Up

mistake-876597__340Update:  Revised to include Area Median Income (AMI) chart.

The purchase of Peary Court is such a high priority for some in Key West, that they are willing to pay $55 million for a property that was purchased for $35 million about two years ago.  That’s quite a return for the seller.  It is considered so crucial by some that they’ve formed a PAC called Housing First.  Housing First has an oddly specific mission.  Rather than showing concern for Key West’s affordable housing shortage in general, it is hyper-focused on the purchase of Peary Court.

The stated reason for this purchase is to preserve 157 units of “workforce” housing.  In plain English that means that Key West will pay $20 million more for 157 housing units that already exist.  Not only that, they will borrow $46 million to do it and use up every penny they’ve accumulated from the Tourist Impact Tax (TIMP).  Will this huge expenditure even make a dent in the problem?

There are a couple of documents out there that raise additional questions.

The first is the Key West Housing Authority Agency Plan.  Section 9 – Housing Needs – starts on page 13.  According to this document, there is a wait list for affordable housing.  There are 801 low income families on the Public Housing wait list.  Low income is defined as less than 80% Area Median Income (AMI) as defined in this chart.

There are two other wait lists included in the document.  There are 239 families on the waiting list for affordable housing for seniors and 14 on the waiting list for Section 8 housing.  All these people have incomes of less than 80% of the AMI.

Assuming there’s no cross-over, there are over 1,000 families in Key West on the affordable housing wait list with incomes under 80% of the AMI.  Could these families afford to live in Peary Court?  The available information suggests that they would not.  The chart mentioned above shows a maximum rent of $1,571 for a 2-bedroom apartment for a household with an income less than 80% AMI.  The city’s latest pro-forma suggests that rents will have to be higher than that.

Speaking of pro-formas, there are two versions that I’m aware of and they contradict each other.  This version of the pro-forma (November 2015) can be found on Housing First’s website.  Then there’s this more recent version of the pro-forma included in Addendum 1 (January 2016) of the city’s request for proposal (RFP) for financing.

Notice that the November version lists gross rental income as $3,885,504 or $2,062 per month per unit and includes a breakdown of units available to various income levels.

The January version shows gross rental income of $4,442,472 or $2,358 per month per unit.  There is no breakdown by income level as there was in the earlier version.

My concern isn’t necessarily that there are two pro-formas.  It makes sense to adjust the plan as more information is gathered.  My concern is that the version being presented to the public on the Housing First website is misleading.  It claims lower rents than are actually planned according to the newer pro-forma.

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