Despite the tremendous growth in Miami’s population and housing stock over the last decade, the city has been lacking in the creation of affordable units, according to a recent study.
Much of the new housing in the market is luxury condos or boutique developments catering to well-educated young people. Left behind in the housing boom are middle and lower-income households, who are increasingly rent-depressed with no where to turn, reports the Urban Institute’s March study on affordable housing in Miami.
Consider that, in 2000, 27 percent of lower and middle-income residents were cost burdened. That is, they spent more than 30 percent of their income on housing. By 2015, the number has jumped to 75 percent, as rapidly gentrifying neighborhoods raise housing costs. At the same time, the city’s housing stock grew by 30 percent. This shows that the increase in housing stock was geared toward more affluent residents to the detriment of others in the city.
Related: Developers eye Little Havana, Allapattah for growth but see roadblocks to development
In Miami, lower and middle-income residents are confined to specific neighborhoods. When those neighborhoods begin to change, current residents either have to move or face a higher cost of living. That is happening throughout Miami, but particularly in areas like Allapattah and Wynwood, where the number of cost-burdened residents jumped 59 points from 2000-2015.
Neighborhoods | Percent cost-burdened, 2000 | Percent cost burdened, 2015 | Difference |
---|---|---|---|
Coconut Grove | 33 | 40 | 7 |
Coral Way | 42 | 54 | 13 |
Upper Eastside | 39 | 45 | 7 |
Edgewater | 32 | 48 | 16 |
Downtown | 42 | 52 | 10 |
West Flagler | 42 | 53 | 11 |
Flagami | 43 | 58 | 15 |
Allapattah | 41 | 55 | 14 |
Little Havana | 44 | 58 | 15 |
Little Haiti | 45 | 56 | 11 |
Wynwood | 52 | 62 | 11 |
Liberty City | 43 | 54 | 11 |
Overtown | 46 | 52 | 7 |
Why the problem persists
So, why isn’t housing development aiding the middle and lower income residents? There’s not much municipal incentive for developers, and banks aren’t likely to help either. According to the Urban Institute, Miami saw a 40 percent decrease in loans issued to homebuilders and buyers after the recession. In lower-income areas of Miami, there was a 78 percent dip in loans issued, but upper-income neighborhoods saw a 300 percent increase in loans issued.
Despite the issues with Miami’s housing stock, there does not seem to be much will on behalf of politicians and developers to find a solution, writes the Urban Institute. It doesn’t help that state officials have squandered nearly all of a $1.8 billion affordable housing fund on other initiatives, according to the Miami New Times.
“Conversations revealed that mandatory affordable housing regulations, even when they are not truly mandatory, are a difficult sell in the current political environment,” the Urban Institute’s report reads.
Neighborhoods | Homeownership rate, 2000 (%) | Homeownership rate, 2015 (%) | Difference (%) |
---|---|---|---|
Coconut Grove | 59 | 56 | -3 |
Coral Way | 36 | 42 | 5 |
Upper Eastside | 30 | 39 | 9 |
Edgewater | 8 | 29 | 20 |
Downtown | 6 | 24 | 18 |
West Flagler | 38 | 42 | 3 |
Flagami | 37 | 38 | 1 |
Allapattah | 17 | 20 | 3 |
Little Havana | 7 | 13 | 6 |
Little Haiti | 23 | 23 | 0 |
Wynwood | 15 | 21 | 5 |
Liberty City | 35 | 32 | -3 |
Overtown | 7 | 15 | 9 |
How to overcome
An affordable housing requirement seems unlikely, but there are other ways to boost homebuilding and homeownership in less affluent areas. Zoning changes could help, according to the Urban Institute, including the easing of height and parking requirements in some areas. An overhaul of property taxes could help homeowners in rapidly changing neighborhoods stay in their homes.
A community land bank to help spur development of brownsites and blighted properties could help areas that aren’t seeing an influx in development. But even more than policy changes, coalition and consensus building among residents and civic leaders will help advance the issue and its solutions.
“An inclusive community where all families regardless of income can live and work will yield long-term benefits to the region and its residents,” the Urban Institute’s report concludes. “But without more deliberate policy and programmatic interventions, displacement and gentrification may become more pervasive.”
There is so much institutional investment capital out there that even when the market sours, low to moderate income are frozen out because units and bulk purchases are
purchased for cash by investors(big and small). It is also a very difficult time to obtain
end user financing so less is more if it is cash.