'How Do We Create More?' Akel Homes President To Talk Housing At Bisnow's Dec. 11 Palm Beach Event

As housing prices have soared in Florida’s Palm Beach County driven by postpandemic demand and an influx of population from the Northeast, California and Texas, many are being priced out of the market.

Alexander Akel, president of Akel Homes, a South Florida homebuilder, has seen this trend firsthand. He said that it is important to acknowledge that the U.S. is not only experiencing an affordable housing crisis but also a market-rate housing rate crisis. 

“We need to rethink density restrictions, expedite approval processes and simplify zoning to create more market-rate housing,” Akel said. “Building higher than four stories is unheard of in unincorporated Palm Beach County and it will become increasingly harder to recruit businesses, teachers, first responders, doctors and nurses if we don't solve our market-rate housing issue. Over time, our failure to grow will negatively impact the quality of life that we enjoy today in Palm Beach County.”

Akel will speak at Bisnow’s Palm Beach State of the Market event to be held in West Palm Beach at One Flagler on Dec. 11. Bisnow recently spoke with Akel about the housing affordability crisis, the lack of parcels available in Palm Beach County for large master-planned single-family communities, and how the future of the county is actually in nearby Port St. Lucie. Register to attend the event here.

Bisnow: What trends are you seeing in the West Palm Beach housing market?

Akel: Since 2018, we’ve lived through multiple housing cycles. First, we had the slowdown as a result of Covid-19, then the pent-up demand caused by Covid-19, coupled with the population influx that came to South Florida which accelerated quicker than anyone anticipated.

Now, in the postpandemic period, we are in a market that is slower but still strong. Especially on the luxury side, the housing market has done very well over the last two years.

Prices for new construction houses in Palm Beach County are substantially higher than a few years ago due to a lack of new construction and a stagnant resale market. Many of our buyers come from out of state, both from our primary feeder markets of New York and New Jersey but also California and Texas. South Florida continues to be a destination not just for snowbirds but also for families who want to move here full-time.

Bisnow: What are some of the challenges the market is facing? 

Akel: With respect to new construction sales, the state of the resale market continues to be a challenge. The resale market serves as a key feeder for new construction sales to local buyers. As we move into 2025 and beyond, the expectation is that as interest rates continue to fall, we anticipate to see the resale market “reopen” and drive sales toward new home construction at a much faster pace.

In addition, the regulatory environment continues to be challenging to navigate. The time to bring inventory to market seems to become longer each passing year. It is an area that requires significant discussion at a federal, state and local level.

Bisnow: What are you excited to discuss at the Palm Beach State of the Market event?

Akel: How do we create more housing in Palm Beach County and work with our local government to address our population growth, both for the newcomers to the market and the existing population?

As builders and developers, we are the government’s primary tool to create housing. Collaboration and an open mindset from all stakeholders are necessary to address housing affordability and supply issues.

At its’ core it is a basic supply-and-demand problem. Affordable housing solutions require market-rate housing solutions. The creation of more market-rate housing should bring the cost of housing down across the board.

Bisnow: How is Akel Homes tackling these challenges? How should others?

Akel: We have a multifamily division building rental communities in Palm Beach County. This includes Mosaic Palms, which has 187 units, including 49 designated workforce housing by a formal county program.

The Palm Beach County Board of County Commissioners and the County Administrator and Staff Commission need to restart the conversation as to how to create more housing. There are areas within the county that can be rezoned or upzoned. We need to build vertically. For example, it is impossible to obtain approval for a four-story garden-style apartment project in unincorporated Palm Beach County. That should not be the case.

The municipalities within Palm Beach County, such as the city of Delray Beach and West Palm Beach, have taken a different approach, allowing higher density developments. They have opportunities created by being located near the Bright Line, the intercity commuter rail service running between Miami and Orlando.   

If we don’t address this issue, we’re going to feel the negative effects as the services and things we enjoy about living in Palm Beach County aren’t going to be available or will be too expensive. For example, that newly trained nurse or doctor who graduated with medical school loans won’t be able to move to Palm Beach County because a starter home is $800K. He or she is going to go elsewhere. This extends to our public sector. It’s going to become increasingly difficult to hire folks to staff our police and fire departments and our schools and make sure we have the first responders we need to care for us. It’s a serious, long-term issue. 

Bisnow: How are you seeing the market changing?

Akel: On the homebuilding front, Covid accelerated the growth of Palm Beach County by seven to 10 years within two years. The opportunities to bring a 50-acre site to market with 200 or 300 homes are long gone in Palm Beach County. Today, the opportunities we are seeing are primarily 7 to 15-acre infill sites which have entitlement challenges such as poor access, limited rezoning potential, neighborhood opposition and unreasonable seller pricing expectations. 

If you are able to successfully overcome those challenges and bring a community to market, they are often less than 100 units.

Communities of that size can’t financially support the vacation lifestyle that buyers desire: the resort-style clubhouse and other large-scale shared amenities. Instead, you have to find other ways to differentiate your product, such as price, included features and close proximity to public amenities, like downtown restaurants and nightlife and parks.

Bisnow: How is Akel Homes continuing to adapt to these changes?

Akel: As the world currently exists and if we continue on our current path, my view is that the future of Palm Beach County’s housing market is not in Palm Beach County, it’s in St. Lucie County and adjacent counties to the north. We are very bullish on those areas, where you can purchase an equivalent size and quality home to one in Palm Beach County for half the price. For example, Palm Tran, which is a public transit system that serves Palm Beach County, recently expanded Port St. Lucie. This future accentuates a population shift towards St. Lucie County. While employment is still strong in Palm Beach County, adjacent counties are starting to attract more jobs and opportunities.

Akel Homes is well-positioned over the next 25 years as we are the developer of approximately 8,000 home sites in the city of Port St. Lucie, and we’re planning to introduce our first community to the market there next year.

To hear more from Akel, register here for Bisnow’s Palm Beach State of the Market event on December 11.

This article was produced in collaboration between Studio B and Akel Homes. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.