There are certain pockets within the county that are flooded with multi-family properties which rent well since it's a less expensive alternative housing option to renters who can't afford the high price tag palm beach county usually demands.

Where the cap rates are these days, you can't afford significant downtime.

It sounds like you are already aware of that Harris County has Flood insurance rates have been increasing and due to the "Homeowner Flood Insurance Affordability Act of 2014"  the subsidies are being fazed out.  

To me any city where a person who makes $75,000 per year can't afford to buy a home is not on my list of best places to live.

Then you just have the labor and overhead as differences, and that will tell you which is actually more affordable. 

I might actually be able to afford the rehab without the 203k.

This will help any renter with living cost to afford the rental unit.  

I want to add a few high end properties that I would not afford without the income from those properties, and I have not been able to find any lender willing to look at future income from vacation rentals.

Yes, owning affordable/low income housing is more challenging than your typical A or B class property, you will experience more repairs, turnover and maintenance. 

The developer was applying for local funds to facilitate the creation of affordable housing.