21 Sep MIAMI HAS A DRASTIC NEED FOR AN INCREASE IN AFFORDABLE HOUSING TO ENSURE ECONOMIC SUCCESS
September 21, 2018 – On the surface, when one talks about affordable housing, many think it is just another form of charity or government assistance. In a city like Miami with extreme wage discrepancies and a cost of housing that far exceeds salaries, the need for affordable housing goes well beyond simply providing a helping hand.
For the local Miami economy to thrive, it’s imperative to have a diverse economic base. To have economic diversity, there must be housing available at all levels for employees to live. While the main economic driver of Miami and Miami Beach is tourism, if we want to continue to grow and diversify the economy, we must support all elements that make that possible. If the City of Miami does not encourage and support more affordable housing in Miami proper, we will continue to constrain employers, jobs and economic growth. Miami will become even more dependent on tourism as well as the real estate, retail and service industries. This lack of housing continues to bring fewer opportunities, slower income growth, a lack of diversification in the local economy, and it impacts our quality of life.
MIAMI’S COST OF LIVING EXCEEDS INCOMES
The Economic Policy Institute estimates that a family of two adults and two children in Miami-Dade County would need to earn a combined $84,972 per year — or $7,081 a month — to live comfortably. The problem is, the median two-adult Miami household earns less than $52,000 a year, according to the Institute, which uses data from the U.S. Census and nonprofits to create its analysis. And that’s just the median, meaning there are many who are living well below a level of “comfortable.” A minimum wage worker in Miami could work three full-time jobs and still not afford a 2-bedroom apartment in Miami-Dade County. To afford this with only one full-time job, a worker must earn a minimum of $24.90/hour.
Miami-Dade does have several affordable housing programs established, but a majority of them have waiting lists and many are currently closed for new applications. In 2015, the Miami Board of Commissioners passed a resolution that now requires the Public Housing and Community Development Department to provide timely and accessible information for the public regarding any new affordable housing properties constructed through various government and private sector programs. Current Miami-Dade affordable housing programs include the Documentary Stamp Surtax, Home Investment Partnership Program, State Housing Initiative Partnership, and the General Obligation Bond Program.
WHAT CAN BE DONE FOR MORE AFFORDABLE HOUSING IN MIAMI?
While these programs do address the issue of affordable housing, even more must be done to make subsidies more lucrative, and density and zoning requirements more attractive to developers. Currently, many developers in Miami focus on the glitz and glam as they continue to turn out ultra-luxury, amenity-rich condos selling for seven figures. Further complicating the issue with these luxury properties is the fact that they are often purchased by foreign investors who are not necessarily contributing to the local workforce or economy. While foreign investments are crucial for the Miami economy, it’s also imperative for some of these developers to take advantage of subsidies and branch out to building affordable properties.
One of the more successful programs in the country is Colorado’s “Live Denver” program. This has established a voucher equity program for lower-income families in the Mile High City. By connecting vacant market rate units with workforce individuals and families they are able to create affordable housing for those living and working in the city. In the two-year pilot program created out of a public-private partnership, residents pay 35 percent of their income toward rent with the difference between market rate subsidized through funds raised by the city, nonprofit foundations and corporations.
With many areas of Miami having excess housing inventory, it’s not uncommon for buildings to have a good deal of their units sitting empty for lengthy periods of time. If the City of Miami were to supplement the rent for these apartments, as Denver does, landlords would have full buildings and lower-income families would have a place to live. According to the Miami Herald, one reason Miami might not be funding a project like this is because out of the $1.87 billion collected and deposited in affordable housing trust funds since the 2008 recession, lawmakers have diverted $1.3 billion of that to other uses. The Florida Housing Coalition estimates that if lawmakers left the $272 million available in this fund the projects that could be completed would bring $3.78 billion in positive economic impact into the states economy and 28,700 jobs.
ALONZO MOURNING’S AFFORDABLE HOUSING COURTSIDE APARTMENTS
In 2016, Former Miami Heat basketball star Alonzo Mourning and the Housing Trust Group finally completed a project eight years in the making and opened phase one of the Courtside Family Apartments, an affordable housing project in Overtown.
Mourning and executives from the Housing Trust Group gathered to show off the new construction, six-story building, at 1699 Northwest 4th Avenue to community members and city officials.
According to the developers, the first phase’s 84 units were all leased by opening day, with rents ranging from $760 to $990 per month. They’re reserved for residents who make less than 60 percent of the neighborhood’s median income.
The South Florida Business Journal later honored the development with its “Structures Award,” declaring it to be the “Best Affordable Residential Project.” Additionally, Alonzo and his wife Tracy Mourning have done so much for Miami-Dade schools that a senior high school in North Miami was named after them. While naming rights for things like the Phillip & Patricia Frost Museum of Science and the Adrienne Arsht Performing Arts Center come with posh notoriety, hopefully more philanthropists will consider funding less sexy projects like affordable housing.
INCENTIVES, SUBSIDIES AND FEES TO ENCOURAGE AFFORDABLE HOUSING
In addition to subsidies and incentives, some cities do somewhat the opposite by imposing fees on developments not considered affordable. The coastal barrier-island town of St. Pete recently took this into consideration and is currently exploring the idea of charging developers a percentage fee of the total construction costs, which will then go into a fund to provide affordable housing.
With so many new residential buildings being built in Miami, one can only imagine that if there was government support for a small percentage of each building to be dedicated to affordable rents, Miami as a whole will be better off in just a few short years. Politicians must think out of the box and consider removing parking requirements, lower or eliminate taxes, reduce or eliminate impact and permit fees, and dedicate funding for rent subsidies. Regardless of which methods the City of Miami uses to create opportunities for lower income families to live, the answer is clear – the growth and economic success of Miami is dependent on ensuring housing for a diversity of incomes.