Will Disney, Universal affordable housing projects lead the way for more? – Orlando Sentinel

As Walt Disney World and Universal Orlando help build affordable apartments for employees and the public, questions remain about who is going to get to live there and what other local businesses, if any, will follow suit.

The developments on land owned by the theme park companies are being constructed and managed by outside organizations but don’t have opening dates yet. Disney and Universal say the 2,300 combined units will have capped rents, making them accessible to low-wage service workers who make up most of their workforces.

Union president Jeremy Haicken, who represents about 18,000 service staff at Disney with Unite Here Local 737, called Disney’s housing project “a positive step” toward addressing the area’s housing emergency when it was announced last year.

But as the union urges the company to adopt an $18 minimum wage in ongoing contract negotiations, Haicken said he was not impressed by the project. Instead, he said Disney should invest in its employees directly.

“Workers don’t need affordable housing, they need to be able to afford their housing,” Haicken said. “A few thousand low-income or affordable units are a drop in the bucket, even though it’s a nice start.”

A recent union study calculated 69% of workers struggled to pay for housing each month and 39% worried about becoming homeless on earnings reaching a median of $16.50 an hour, or $34,320 annually.

Disney and Universal are joining a growing number of businesses recognizing the housing crisis and building places to live for their workers nationwide. Other businesses will likely look to their projects for guidance, and Florida leaders have proposed incentives to developers to expand affordable housing.

Housing experts largely praise the plans but wonder what the developments will look like, how many apartments will be set aside for employees, what qualifications prospective applicants will have to meet, and how the companies plan to manage demand that will almost certainly exceed capacity.

“Disney and Universal get the benefit of saying, ‘Hey, we’re trying to make our [employees’] lives better, more affordable,” said Scott Smith, an associate professor at the University of South Carolina’s College of Hospitality, Retail and Sport Management. “I just hope that they think it through.”

Disney and Universal have invested a total of about 100 acres of land in the projects, which they say are financed by the developers. Both Disney’s partner, The Michaels Organization, and Universal’s, Wendover Housing Partners, are specialists in affordable housing.

Disney has not announced pricing for about 1,300 units in its unnamed development near Flamingo Crossings Town Center, just west of its theme parks. Universal has said 750 of the 1,000 apartments at its Catchlight Crossings community, off Destination Parkway and east of the Orange County Convention Center’s South building, will rent for between $400 and $850 a month.

Such low prices are largely unheard of as Orlando’s rental rates spiked during the pandemic and are expected to remain high in one of the most competitive markets in the U.S.

Median rent in metro Orlando reached $2,130 per month in December and monthly rates have increased by more than $600 since February 2020, Rent.com reported.

Orange County housing officials declined an interview about the projects. County spokeswoman Kelly Finkelstein said planners are reviewing Universal’s housing development plan, but Disney has yet to submit its application.

Wendover will be leasing the land for Catchlight from Universal for an undisclosed amount. Ryan von Weller, Wendover’s managing director of developments, said the company is paying significantly less than the “tens of millions” he estimates the 20 acres are worth.

“It’s a tremendous boon to be able to underwrite your development without any land costs, much less $30 million,” von Weller said.

Universal presented its first plan for the project before a December 2019 county commission meeting, while it was seeking $125 million in tax money to build a road to its upcoming theme park Epic Universe. Commissioners approved that request.

Wendover received tax credits and bond allocations from the state and county for 600 of the 1,000 units that will be at Catchlight, von Weller said. All the units will have their rents capped for people making 120% of the area’s median income or less.

The tax credits obligate Wendover to keep the development from falling into disrepair, he said.

“We are bound to keep these developments not only safe but looking as close to they did the day they opened for the lifetime of the development as well,” von Weller said.

Catchlight Crossings will also include grocery stores, a health center and Bezos Academy Orlando, a Montessori-type preschool. Von Weller likened the project to “an entire enclave,” calling it “a paradigm shift in affordable housing.”

In a statement, Universal spokesman Tom Schroder said the development is close to jobs, mass transit and shopping centers “in the heart of an area identified by Orange County as needing a solution just like this.”

Disney already offers short-term, dorm-style housing to students in its college and international programs at weekly rates that can range up to nearly $250, but this is the first time it will be involved in building housing specifically for both regular employees and the public.

The project will be near its theme parks and Disney-developed hotels, shopping and dining.

Walt Disney World released this rendering of its upcoming 80-acre affordable housing development in November as part of an announcement that it had chosen developer The Michaels Organization to build, own and operate the project. (Courtesy of Walt Disney World)

Disney declined to answer specific questions about the project, and The Michaels Organization declined an interview.

“We are proud and excited to be bringing this initiative to life, which includes contributing nearly 80 acres of our land. … We will continue to find and support creative solutions that make a meaningful impact,” Disney spokesman Eric Scott said in a statement.

Even at full capacity, the two projects won’t make much of a dent in Central Florida’s housing crisis.

In metro Orlando, the requirement that more than 7,000 existing units be affordable is set to expire in the next 10 years, according to the University of Florida’s Shimberg Center for Housing Studies.

A 2022 study determined 61,422 renters in Orange County, or about 28%, were spending more than 40% of their income on housing.

Hospitality researcher Smith said housing options like these give the lowest-wage workers, some of whom live in motels, better choices.

“Anybody that gets that upgrade, it’s almost going to be like hitting the lottery,” he said.

But even when these complexes are managed by third parties, they can put workers and employers in awkward situations.

“How will you decide who gets to live there and who doesn’t? Is it going to be spelled out, is it seniority or is it just company preference?” Smith said. “There’s a couple of things that need to be clarified to make sure there’s a fair situation.”

Meanwhile, state legislators and lobbyists are discussing using incentives to encourage businesses to build affordable housing.

A bill introduced in January by Senate President Kathleen Passidomo would give tax incentives to developers for building projects that offer income-restricted units.

The Florida Restaurant & Lodging Association’s 2023 legislative agenda notes the industry “has a specific and dire need for reliable and affordable rental housing.” Central Florida division head Robert Agrusa brought up “incentivizing industry leaders … to build housing on their properties” during a Jan. 12 Orange County meeting.

Jeff Reader, with the real-estate think tank Urban Land Institute, said the locations of such projects keep workers close and reduce commuting costs.

He said the projects also need to address concerns such as walkability, communal spaces, and closeness to amenities. They also should offer a mix of housing types.

“It becomes a quality-of-life thing. You would think companies want that for their employees,” he said.

But Reader also said major employers such as Disney and Universal also should acknowledge their role in creating such low wages.

“Big employers like Disney, they’re kind of the price-setters,” he said.

Disney and Universal are not alone in building housing for employees, nor are they the only theme park companies offering the benefit.

In Miami-Dade County, where rents spiked by 45% in 2022 and a typical home can cost nearly $500,000, the school district is collaborating with the county housing authority to build three housing projects with about 160 units on school properties.

The district wants to do what it can to alleviate local housing prices, said Raul Perez, its chief facilities design and construction officer. It drastically cut costs for the project by providing its own land as the second-largest landowner in the county.

“Our core mission is education. That takes priority,” Perez said. “These are unique opportunities, but we are not the solution. We want to be part of the solution.”

In Pigeon Forge, Tenn., the Dollywood theme park welcomed the first tenants of its new 756-occupancy short-term housing development, the International Residence Hall, in July.

Tim Berry, Dollywood’s vice president of human resources, said the hall serves Dollywood’s student interns, international employees and college-age interns with the county’s Southern Hospitality Internship Program.

Dollywood built the housing to attract much-needed seasonal employees to Pigeon Forge and relieve these workers of having to find their own accommodations, Berry said. It improved the theme park’s staffing almost instantly.

Residents Moesha Lewis, 25, and Artley Porterfield, 23, praised the complex’s amenities, cleanliness and proximity to their jobs.

“It felt like home, to be honest,” said Lewis, of St. Mary Parish, Jamaica.

Porterfield, of Jonesborough, Tenn., sought permission to extend his lease when he got a local job because the living arrangement is among the area’s best and most affordable, he said. He pays $125 a week with three roommates.

Moesha Lewis, of Jamaica, lived at Dollywood's International Residence Hall during her international program last year. Lewis said the housing

Like Disney and Universal, Dollywood contributed land for the development but does not directly manage it.

“We’re just not in the landlord business,” Berry said. “It’s also awkward to be a landlord of our own employees … [for instance,] if there’s some performance issues at work, then how does that affect housing; or if there’s a housing problem, how does that affect work?”

Dollywood and developer Holtz Builders Inc. have started expanding the residence hall to accommodate around 250 additional tenants, Berry said. Recognizing a local need, they are also in early talks to build housing for regular employees by 2024 or 2025.

Smith said Dollywood will likely have the same concerns as Disney and Universal in building residential housing. The companies also face pressure to make the projects high-quality because their brands are involved.

“Disney, or Universal or Dollywood, are never going to attach themselves with a project that’s shoddy,” he said.

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