ORLANDO, Fla. — Real estate developer Robert Vazquez grew up in Section 8 housing, raised by a single mom. Now, he builds homes, hoping at least some of them can provide more stability for lower-income families.

“If we convert people from renters to homeowners, and give the ability for homeownership to become more attainable for people, I think that we will see a shift in community morale, in community improvement,” said Vazquez, who runs Countrywide Realty Partners.

That’s his goal with the four single-family homes Vazquez’s team has been building in Parramore for over a year now. From the get go, Vazquez wanted to sell the homes to Parramore residents at affordable price points. But lengthy production delays and expensive materials have upped his costs significantly, complicating that plan.

Originally, Vazquez wanted to keep the three-bedroom Parramore homes’ asking price below $260,000. Now, he’s looking at closer to between $300,000 and $305,000.

“That’s gone up significantly, but so has the cost of materials,” Vazquez said. Ultimately, so long as the monthly mortgage cost comes out to be less than average rent in the area, he says he will still feel he has met his goal of delivering affordable housing to the community.

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Recently, Vazquez says his team was held up for seven months waiting on roof trusses to be ready for the Parramore homes. In more normal, pre-pandemic times, he says he could build an entire home in half that time. But now, materials production delays are having a “snowball effect,” on home builds, he says: holding up jobs and ultimately, would-be homebuyers from moving in.

“Since we’re spec builders, we have to absorb the cost of these increases,” Vazquez said. And, “Profit margins for builders are not what people think,” said President of Greater Orlando Builders Association Chassity Vega. 

Usually, Vega says, builders’ margins are “very, very tight,” making them susceptible to supply chain disruptions – and in the last two years, there’s been plenty of those.

“There is nothing that is not being touched in the homebuilding process,” Vega said. “Tampa, Jacksonville, Orlando, they’re all struggling immensely with the supply chain disruptions.”

Vega says production of lumber, including roof trusses, remains an ongoing issue. Appliances, windows, and garage doors are also delayed, with lead times of anywhere from 23-28 weeks before orders are processed. 

“It’s really out of our hands. We're doing the best that we possibly can, considering the supply chain,” Vega said. “We are stalling sales. We are delaying sales.”

While there’s lots of pressure on the industry to build quickly, Vega warns, she doesn't see the supply chain issues easing up soon.

“What we know is that our demand is still here. The demand in Central Florida is far greater than a lot of [other] areas,” Vega said. “The crystal ball does not tell us when that’s gonna let up.”

"Take the initiative"

About 33 percent of Parramore residents own their homes, according to a 2020 city report. But in the Orlando area overall, there are nearly twice as many homeowners.

To Vazquez, that discrepancy suggests a lack of investment in the Parramore community – a trend he’d hoped to help counteract, with the four new homes he’s finally almost finished building there. The homes are energy-efficient, Vazquez says, with high-quality insulation and windows to help keep costs down for future homeowners.

He’d still like to try and pass any savings down to the community members he hopes will eventually own these homes. That’s why so far, Vazquez says he’s turned down the many high offers he’s received from cash investors.

“It becomes really difficult when you’re having a very fair cash offer being presented to us,” Vazquez said. But so far, he’s decided accepting those offers would defeat his “goal of making sure our homes are going to people who are desirous of becoming homeowners.”

To achieve that end, Vazquez says his companies will also keep pursuing market-rate or luxury contracts, which will help fund future affordable housing projects. Additional funding will also come from the hedge fund he just launched for accredited investors, Vazquez says.

Before officially listing the Parramore homes for sale, Vazquez says his team is brainstorming a fair way to decide who to sell them to. He says ideally, he’d like to do a lottery system, pulling from a pool of folks who have already completed the educational requirements for the City of Orlando’s down payment assistance program. The city also makes other housing assistance resources available, including some incentives for developers like Vazquez, who want to build affordable housing.

“You can drive anywhere through this community and you can see there’s very little physical improvement that’s occurring,” Vazquez said of Parramore. “You have landlord investors that are not doing their job, in my opinion, of improving their assets.”

He says that kind of deferred maintenance has a snowball effect, discouraging potential stakeholders and lenders from investing in a community they might feel is “just too far gone.” That apprehension disproportionately affects neighborhoods of color, where homes can be undervalued, a symptom of redlining that persists, more than fifty years after the U.S. outlawed the racist housing policy. 

Vazquez says it’s partly up to developers like himself to help break that unfair cycle. 

“Maybe we just need to change our perception,” Vazquez said. “Maybe we need investors to go ahead there, and take the initiative to make improvements.”