Apartment builder looks at Sarasota
Beneficial Communities specializes in low-cost housing.
By RICH SHOPES
rich.shopes@heraldtribune.com
SARASOTA -- A builder of affordable apartments has moved its headquarters here just as Sarasota County is looking to develop more low-cost housing.
Don Paxton, the owner of Beneficial Communities LLC, 3131 Clark Road, says his three-person development company is building three apartment complexes in Jacksonville, Chicago and Hopewell, N.J., but it has not yet broken ground on any projects in Southwest Florida.
Paxton said lifestyle reasons compelled him to move from Cincinnati to Sarasota, but he says he also sees opportunities to build low-rent apartments here, particularly for retirees.
"I just don't see anything here like what I do," said Paxton, a former executive for now-defunct Brisben Development in Cincinnati and Orlando-based Picerne Development.
Paxton said he wants to focus on 120-unit, three- and four-story apartment complexes for seniors. Although a for-profit company, Beneficial depends on state and federal reimbursements to fund its construction costs.
In addition, leasing rates are capped and tenants must meet certain income requirements before moving in.
In some cases, he said, the rental rates can amount to half of what they would be without government subsidies. Rents for one- and two-bedroom units ranging from $512 to $612 monthly might hit $1,100-$1,200 "if you didn't use that subsidy," he said.
Paxton moved to Sarasota in November, just a few months before a coalition of county officials, activists, builders and real estate brokers organized to examine housing conditions of low-income residents.
Manatee County has undertaken a similar self-examination, although affordable apartments there are more plentiful.
Tuscany Lakes, a 348-unit Mediterranean-style complex on 58th Place East, near the Prime Outlets mall in Ellenton just opened last week. Rents start at $527 per month for one bedroom and $715 for three bedrooms. Tenants must meet certain income criteria. For example, a single person can earn no more than $22,440 to rent a one-bedroom apartment.
Not far from that complex are two other subsidized apartment complexes that also use rent controls -- The Oaks at Ellenton and Palmetto Trace.
Paxton says he sees Sarasota as ripe for those same kinds of projects, but focused on seniors. Sarasota has four subsidized apartment complexes, two for seniors: Bayou Oaks on Old Bradenton Road and Willow Creek in Northport.
"There is just an insatiable demand out there for truly affordable housing," Paxton said.
The biggest drawback, he said, is the dwindling pool of affordable land. State and federal housing programs readily reimburse construction costs, but developers are left on their own when it comes to acquiring land. Higher land costs can eat into a developer's margins or lead to fewer amenities for residents.
"We have to compete with market-rate developers for those market-rate sites," said Paxton, who spends much of his time scouting for land. "I would love to be east of (U.S.) 41 or west of (Interstate) 75, but there's no affordable land there.
"In general, when there is a push to build affordable housing, they want it to be tucked away, but the residents of affordable housing want to be close to schools and jobs," he said.
