After the successful redevelopment of the Wynwood neighborhood, developers and realtors are eyeing nearby up-and-coming neighborhoods Little Havana and Allapattah. But roadblocks exist before the communities can see the influx in real estate investment other Miami areas have seen.
Zoning and other municipal regulations are a barrier to development in Little Havana and Allapattah, but experts see a way forward, according to a panel of real estate professionals assembled by CREW Miami.
Miami’s luxury real estate market has seen booming levels of investment, leading to a bloated inventory of condos. But investment has largely eluded inner-city areas like Little Havana (except for Marlins Stadium, which experts say has not helped spur development in its immediate vicinity). With budget-conscious millennials and empty-nesters favoring city centers for working and living, real estate investors are wanting to bet on Little Havana and Allapattah but need municipal help before doing so, according to CREW Miami’s luncheon panel held in early March, which was covered by the Daily Business Review.
A citywide zoning overhaul was implemented in 2009, and the rules are considered a hindrance to neighborhood development, said Carlos Fausto, president of Fausto Commercial, according to the business publication. In Little Havana and Allapattah, issues like density restrictions and parking requirements limit developers' ability to build dense, affordable homes, Fausto said.
In Allapattah, developers can build as high as eight stories with 150 units per acre, but even greater density might be needed, experts say.
Much of the existing housing stock, particularly in historic Little Havana, consists of one-to-four unit buildings, many dating back to the 1930s. To allow for more housing, the city will likely have to grant easements on its zoning laws to allow for taller structures with less available parking, and will have to expand municipal infrastructure to accommodate the prospective development, experts said.
Wynwood shows way forward
Despite the hurdles, experts say the development of Wynwood shows the way forward. The former industrial-area-turned-arts-mecca is one of the hottest neighborhoods in the city.
For one, the city designated Wynwood as a Neighborhood Revitalization District, which allows for zoning variances within the district. The district allows for mixed-use residential and commercial development as well as shelters tax dollars to use on neighborhood improvements and pedestrian-friendly streets, according to Miami Today. City leaders have also created a public benefits trust, which stipulates that 35 percent of the fund goes to affordable and workforce housing.
Property owners in Little Havana are also seeking a neighborhood revitalization district, Fausto said.
Developers have made an effort to court the favor of current Wynwood residents, which made approval for new developments significantly easier, the panel said. They said other developers eyeing Little Havana and Allapattah should do the same to help developments get approval.
Now that housing prices and other property values in the area have risen, developers are hoping to recreate that success in neighboring Little Havana and Allapattah. But before that can happen, those neighborhoods need to carve out a niche that makes the area attractive or unique, said Tony Cho, founder of Metro 1 Properties.
Since those changes, Wynwood has been a leader in the city among commercial and residential development. In 2016, it recorded five of the eight largest property deals in the city. A 15-unit, "boutique" condo building was built Wynwood in 2016 with an average unit selling for $650,000, according to the Miami Downtown Development Association.
“Wynwood was about street art,” Cho said at the luncheon. “Each neighborhood needs to have its own defining principle, its own characteristic.”