It's Affordable, Stupid

By Hannah Wallace April 30, 2005

Maverick founder of a $2.8-billion global financial services company, Harvey Vengroff is also a landlord and developer. Last winter, frustrated over his inability to move forward on building affordable housing on property in the city of Sarasota and a 200-seat theater on the Backlot, his eight-acre mixed-use development off Fruitville, Vengroff threatened to drop his theater project and move his company, Vengroff Williams & Associates, and his 300 Sarasota employees to Manatee County. Shortly afterward, the city found a way to resolve its differences with Vengroff, and his affordable housing projects and theater are back on track. Here's what Vengroff has to say about building affordable housing in Sarasota.

How did you get the city to negotiate?

We pushed back, and I don't think everybody pushes back.

Why do you care about affordable housing?

Vengroff Williams & Associates is a financial services company of 1,100 employees. We handle receivables of major corporations such as Microsoft, Fox, Disney, GE and Hewlett Packard and other companies, and we collect delinquent accounts. I can't hire people because they can't find a place to live.

When I first went to the Downtown Partnership meeting they said affordable housing was $300,000. The people who work here [at Vengroff Williams] make $35,000-$40,000 a year, which is above the wage scale for the area; but if you're making $35,000 a year you can't afford a $300,000 house. Most of these people are in their 20s. John Tylee [former director of the partnership] didn't think there were any apartments available for people [like that]; and I said, "I own 1,000 in two counties." Some of them are pretty nice for $500-$600 a month. I don't have anything for more than $850 a month. Maybe 20 percent of my employees rent from me.

How can you afford to develop affordable housing?

We take apartments that were just like Janie Poe [the rundown federal housing project in Newtown] and rehab them. We bought them cheap, for around $30,000 to $40,000 a unit, and we rehabbed them for around $12,000 a unit. I'm in there for less than $50,000 per unit so I can afford to rent them for $600. It is a business you can make money in.

You've been a critic of the Sarasota Housing Authority. Why?

They were paying an outside contractor $80,000 to $90,000 [to rehab] the units at Cohen Way [on Lemon Avenue between Sixth and Tenth streets] and selling them for less than what they were rehabbing them for. So they are losing money for each one.

Could you do it for less?

I could do it for $15,000. This is not a secret. You go to Home Depot and buy your cabinets for $12,000. You go to Best Buy and buy your refrigerator for $300. I make money doing that.

What type of affordable housing do you want to build on Backlot, your Fruitville property?

Hopefully 1,600 units that would rent for $600 to $800 a month. We would propose a walk-to-work situation where we'd have vans running from the property most of the time. About 30 percent of the people who rent from me don't have cars.

What do you want to do on Bradenton Road?

We have a five-acre property, where we think we'd like to build 31 affordable houses. My version of affordable is $125,000 to $150,000 for a three-bedroom, two-bath, one-car garage home.

Why don't you build luxury units like everybody else?

The guy who was going to put up The Metropolitan [a downtown Sarasota condominium that has been sold to another developer]-he was going to do bigger and better and smarter than everything else, right? I'm not anywhere near that league. I can afford to make mistakes. If my cabinet is an eighth of an inch off, someone's not going to holler at me, because they're only paying $600 rent. I can build a kitchen for $1,200 instead of $200,000.

You think the city doesn't support efforts to build affordable housing? Why?

If you're a city person and you look at a condominium for $1 million or an apartment for $60,000, where's the tax base? That's probably a driving force.

Do you think Sarasota will be able to create more affordable housing?

No one is proposing affordable housing, and the only affordable housing we have is being scooped up by people who are building less affordable housing. We have a community that caters to the rich people from somewhere else. I'm one of those people, by the way.

Filed under
Show Comments