Miami’s Heat Leaves Some in the Cold, But There are Solutions
Real estate is definitely on the rise in Miami, with median home values up 8.5 percent year-over-year in Miami-Dade County as of July, roughly in line with the larger Miami-Fort Lauderdale metro area and almost three times the national pace of growth.
But that rising tide isn’t lifting all boats.
Miami’s middle class is increasingly getting squeezed out, victims of fragmented local politics, poor transit infrastructure and a lack of diverse housing options. As a result, while the city remains incredibly attractive and affordable for the elite, working-class Miamians are struggling with hugely unaffordable rents and a serious lack of affordable, mid-level housing even reasonably close to job centers.
Zillow visited Miami as part of our Housing Roadmap to 2016 series of events focused on exploring local housing challenges in the communities most impacted by them. We were happy to host former U.S. Senator from Florida and former Housing and Urban Development Secretary Mel Martinez for a conversation on local and national issues, as well as several local policymakers, academics and real estate professionals.
Their expertise proved invaluable in adding context to our existing Miami research, and helped paint a picture of a Miami in which some are thriving, but many are struggling. But they also helped us land on some potential solutions to Miami’s unique housing challenges.
Neutralize NIMBYism
Miami-Dade County has a critical shortage of affordable and middle-class housing. But increasing density and breaking down barriers to more housing supply is frustrated in Miami by entrenched and vocal NIMBYism.
The City of Doral provides a compelling example. A fast-growing city that is becoming one of the Miami area’s job centers, Doral is an ideal and highly sought-after housing destination for many Miami-Dade residents. But the city also straddles major east/west and north/south commuter arteries, and is next door to busy Miami International Airport. The result is traffic, originating both from Doral’s own roughly 50,000 residents, and from people passing through on their way into and out of Miami.
Doral Councilwoman Ana Maria Rodriguez outlined the challenges of balancing Doral’s popularity with its geographic convenience. Many city leaders recognize that Doral is a good candidate for denser, more urban development. But their constituents fear that more density would mean more traffic – and traffic is bad enough. In order for elected officials like Rodriguez to keep their jobs, they effectively can’t support more density.
This problem is not unique to Doral. It’s a challenge faced by many other cities coping with affordability issues, as we’ve discovered. One possible solution is for smaller political entities like city councils and district governments to cede control over certain decisions to a jurisdiction broader in geographic scope. A county or regional authority is likely more capable of looking at the bigger picture, and recognizing those areas best-positioned to meet broader housing needs. By leaving the big decisions to the broader authority, some control is effectively taken out of NIMBYs hands, and put into the hands of those with the greater good in mind.
National Policy Can Help Solve Local Challenges
Particularly when it comes to housing, national policy is a very blunt instrument ill-suited to helping solve intensely local housing issues, which in Miami include housing affordability, inadequate housing supply and rapid home value escalation.
But blunt instruments can still be effective in helping enact widespread change.
Andrew Frey, principal at Miami-based real estate development and services firm Tecela, likened the situation to the debate surrounding the national minimum drinking age in the early 1980s. States were (and are) free to set their own minimum drinking ages, but the federal government also had the power to withhold highway funds from those states that did not comply with the preferred national age of 21. Faced with the proposition of losing tens of millions of dollars in federal money, all 50 states eventually raised their minimum drinking age.
With housing, a similar situation could present itself. If one problem is a lack of density and of affordable housing units in general, federal money could be distributed and withheld just like highway money. If a certain number of affordable housing units are not created or maintained, then federal money for other projects is withheld. For this to work, goals need to be clearly stated and success easily measured. Measuring something as ill-defined as “density” is incredibly difficult, but determining if a given number of affordable housing units was created within a given period of time is much easier.
Transit Can’t be a Trainwreck
Spend a few days in Miami and you’ll undoubtedly become familiar with the idea of “Miami time,” in which events and meetings invariably start a bit later than scheduled. Some of this can likely be chalked up to the heat and frequent downpours that cause folks to move a little slower. But it’s also apparent that in Miami, it takes too darn long to get anywhere because public transit stinks and traffic is horrendous.
Housing affordability is about more than just the monthly rent or mortgage payment. Vehicle wear and tear and fuel add real costs to local residents’ bottom lines, particularly those forced to live farther from the city center in search of more affordable homes. Compounding the problem in Miami are building regulations that force developers to construct a given number of parking spaces per new unit constructed. These regulations help ensure that Miamians remain car-dependent, and also add huge costs to development in the form of underground or detached parking garages that must be built to accompany new residential development.
Effective transit systems help keep housing affordable, both by allowing farther-flung residents to travel to downtown jobs more efficiently and by opening up previously closed-off areas not near major roadways to new development. And clustering new residential development around transit centers can allow for more urban density without having to overly extend city infrastructure.
Denver, a participant in an earlier Housing Roadmap forum, could provide a decent model for Miami’s way forward. Denver recently established a transit-oriented development fund meant to help finance the acquisition of key land parcels along proposed and potential transit routes, with the idea that those parcels would then be available for affordable housing development. By acquiring land now, prior to the actual construction of new transit lines, developers can secure parcels before the proximity of rapid transit presumably drives land prices up.
Developers, Sweat the Small Stuff
Miami is a city of extremes, and this is as true of its housing stock as it is of the weather and the fashion. In Miami’s suburbs, large subdivisions of freestanding, single-family homes dominate the landscape. Downtown and along the coast, skyscraping condo and apartment towers clog the skyline.
But in between, the kinds of mid-rise walk-up buildings, townhomes and smaller multi-family properties that typically represent the bulk of affordable housing in most cities are virtually non-existent, contributing to the area’s affordability issues. Gleaming downtown condos make for more dense city blocks, but are too pricey and ill-suited for most families. Typical single-family homes offer more space and are at least somewhat more affordable, but their distance from job centers means more money spent on fuel and more time lost to commutes.
This all-or-nothing approach to density ignores the simplicity inherent in smaller residential development. Allowing smaller developments could be appealing in established neighborhoods like Little Havana, where long-time residents rightly worry about the impact of larger-scale projects on the cultural and historical feel of the neighborhood.
Indeed, a big increase in density could be achieved in Miami with minimal new building at all. Tecela’s Frey noted that in areas like Little Havana, regulations prohibit the redevelopment of existing mid-rise properties to include more residential units. But by relaxing some of these restrictions, developers could add more housing without meaningfully changing the outward appearance of a neighborhood at all. Smaller buildings also have the advantage of being cheaper to develop than the kinds of huge, mixed-use, urban towers for which Miami is famous.
Conclusion
Miami’s housing challenges are daunting, but not insurmountable. Recognizing some of the challenges outlined above and being open-minded to potential solutions will help the city remain welcoming not just to its thousands of visitors, but to those calling the city home, as well.
The full video of our chat with Sen. Martinez and our full panel discussion is below.
