Item Coversheet

OLD BUSINESS  2.

COMMITTEE MEMORANDUM

TO: Neighborhood and Quality of Life Committee Members


FROM:
Jimmy L. Morales, City Manager


DATE: July 15, 2020


SUBJECT:DISCUSSION REGARDING HOW TO CREATE MORE AFFORDABLE HOUSING IN MIAMI BEACH

HISTORY:

At its January 15, 2020 meeting, the Mayor and Commission referred to the Neighborhood and Quality of Life Committee (NQLC) a discussion regarding ways to create more affordable housing in the City. Commissioner Michael Gongora is the item’s sponsor. The item was briefly discussed at the March 4, 2020 Committee meeting. Subsequently, Commissioner Gongora requested that the item be deferred to a future meeting to dedicate more time to the discussion.

 

At its March 4th meeting, the NQLC inquired as to whether the Housing Authority of the City of Miami Beach (HACMB) could increase the amounts of its vouchers so that more of its vouchers (and the people served by the vouchers) would remain within the City. The Administration met with HACMB who shared it has already been operating, with prior approval from HUD, with the payment standard of 100% Fair Market Rent (FMR) compared to the basic standard of 90% FMR. Furthermore, HACMB may go up to 110% FMR on a case-by-case basis. The Housing Authority also shared that although only one-third of its vouchers remain within the city, this allows them to stretch finite funds because it can pay more for units within the city since it is paying less for units outside of the city. The table below indicates the FMRs for the Miami-Miami Beach-Kendall metro area.

 

Final FY 2020 & Final FY 2019 FMRs By Unit Bedrooms

Year

Efficiency

One-Bedroom

Two-Bedroom

Three-Bedroom

Four-Bedroom

FY 2020 FMR

$1,084

$1,285

$1,625

$2,164

$2,621

FY 2019 FMR

$951

$1,147

$1,454

$1,934

$2,354

 

The Committee also suggested an industry review meeting be conducted to obtain input from the development community. Due to the coronavirus pandemic, the industry review meeting has not taken place.

ANALYSIS

The critical shortage of affordable housing in our community has resulted in more than half of our residents being cost burdened. The resident workforce risks leaving the city in search of affordable housing, and new employees are being deterred by the high cost of living.

 

Increasing affordable housing options is a key element of the 2019 Strategic Plan: Through the Lens of Resilience and its importance is echoed in the Greater Miami and the Beaches Resilient 305 strategy as Objective 5, Action 18. Prioritizing Workforce Housing is listed as a Guiding Principle in the city’s 2040 Comprehensive Plan. Furthermore, the Housing Element in the 2040 Comprehensive Plan sets the objective to “have available a minimum of 6,800 housing units of workforce, affordable low- and moderate- income households and special need populations during the period through 2030.” There are approximately 2,450 affordable housing units in the city. The Housing Authority of Miami Beach manages 3,400 housing vouchers. However, only 30% of those are used within the city.

 

Below is a summary of the changes that have been made to encourage the development affordable and workforce housing:

  • Ordinance 2017-4148 (Affordable Housing)
    • Reduced minimum and average unit size to 400 square feet across all zoning districts within the City where multifamily residential units are allowed.
    • Reduced parking requirements from:
      • 0.5 to 0 parking spaces per unit for elderly housing
      • 1 to 0.5 parking spaces per unit for low and/or moderate income non-elderly persons
      • No additional parking requirements for development of additional affordable housing units on an existing building and new construction.
  • Ordinance 2017-4149 (Workforce Housing)
    • Reduced minimum and average unit size to 400 square feet across all zoning districts within the City where multifamily residential units are allowed.
    • Reduced parking requirements from 1 to 0.5 parking spaces per unit
    • When an existing building is renovated and the number of units is increased, or when units are added on a lot with an existing building that is retained and renovated, there is no parking requirement for the newly constructed units

 

2040 Comprehensive Plan – Housing Element Policy 1.1.6

The Planning Department, which includes zoning review, will continue to streamline the housing approval and permitting process in coordination with the Building Department through the expedited processing of permits for affordable and workforce housing projects. This incentive gives priority to designated affordable housing projects when scheduling Pre-Design Conferences with all relevant agencies.

 

Town Center-Central Core District

On November 14, 2018, the City Commission adopted ordinance 2018-4224, establishing the Town Center – Central Core (TC-C) zoning district.  Pursuant to the recommendations of the North Beach Master Plan, the ordinance allowed for co-living units (which may also be known as a micro-units).

 

Accessory Dwelling Units (ADU) (Ordinance 2019-4304 & 2019-4305)

Ordinance allows for the following:

1. ADU’s be allowed in all single-family neighborhoods;

2. The rental of ADU’s are limited to homesteaded or owner-occupied properties; and

3. The rental of ADU’s for longer than six months and one day.

 

Additional Affordable Housing Strategies

The City of Miami has unveiled its Master Plan to create a bank to finance affordable housing construction and renovations. The City of Miami is providing an initial contribution of $85 million set aside from voter-approved bonds. Other strategies to explore include:

 

Strategy

Jurisdictions implementing

Inclusionary Zoning

Inclusionary zoning policies have been implemented in more than 400 jurisdictions nationwide. Most notably: San Francisco, New York City and Montgomery County. San Francisco originally passed its inclusionary zoning program in 1992, and voters recently passed a measure that would increase the inclusionary zoning set-aside for affordable units to 25 percent, the highest in the nation. Currently, San Francisco requires that developers devote at least 12 percent of onsite units to affordable housing, or 20 percent off-site.

Rent Regulation

As of 2019, five states (California, New York, New Jersey, Maryland, Oregon) and the District of Columbia have localities in which some form of residential rent control is in effect. California has set the maximum annual rental increase at 5% plus regional inflation and provides eviction protections to longtime tenants.

Land Bank

Twelve states have passed comprehensive state-enabling land bank legislation: New York, Georgia, Missouri, Pennsylvania, Tennessee, Nebraska, Alabama, West Virginia, Delaware, Virginia, Connecticut, and New Jersey. Approximately 200 communities have created land banks.

The Philadelphia Land Bank simplifies the process of transferring city-owned properties to private owners. It can also foreclose privately-owned vacant properties that could potentially be used to revitalize a neighborhood. The Land Bank is run by a board of real estate, development, and public policy professionals.

Expedited Processing

San Diego’s affordable/in-fill housing expediting program offers priority processing to projects with at least 10 percent affordable units. The program offers access to specialized city staff, shorter staff review times and priority on hearing dockets among other things. In just over 10 years, the program expedited processing for more than 300 projects including 2,800 affordable homes. Participating projects are generally processed in half the time of a typical local project.

Density Bonuses

Montgomery County requires 12.5 percent of all new residential units be affordable but the required affordable percentage rises to 15 percent for projects that take advantage of the County’s density bonus program. Under that program developers can build up to 20 percent more floor area than would otherwise be allowed under local zoning.

Fee Waivers

Austin’s SMART Housing Policy offers very significant fee waivers to builders who voluntarily agree to include affordable housing units in their projects. Among other benefits, the program offers:

Multi-Family Subdivision:Approximately $1,250 per Unit,

· Waived amounts for Permit Fees, Water/Wastewater Capital Recovery Fees, and Construction Inspection Fees have averaged approximately $600 per unit

· Parkland Dedication Fees – Up to $650 per unit for reasonably priced units

Renters tax credit

Maine – Subject to certain income limitations based on household size, Maine renters may be eligible for a tax credit equal to 15 percent of the rent paid during the year.

Vacancy Tax

In 2017, Vancouver implemented a tax on homes left vacant for more than six months per year. Such properties are subject to a tax of 1% of the property’s assessed taxable value

Cap on Property Taxes

Illinois lawmakers are looking at capping property tax increases for apartment buildings that include low-income housing in a portion of the building. It would put caps on how much assessments on apartment complexes could rise if the owner commits at least 20 percent of the building's units to be reserved for families that make less than a set income, depending on the area. The caps would gradually be reduced over the course of ten years.

Elimination of Single-Family Zoning

Minneapolis now allows duplexes or triplexes on lots previously allowing just one home, with no requirement to add additional parking. Seattle also recently approved residential upzoning.

Tax Increment Financing (TIF)

For more than a decade, Portland has set aside 40 percent of the TIF. Since 2006, the program has generated nearly a quarter of a billion dollars to support affordable housing.

CONCLUSION:

Although the city has made efforts towards incentivizing and encouraging development of affordable housing, only an additional five units have been added to the affordable housing inventory since the inception of these changes. The five units located at 795 81st St, were acquired by the city using funds the city was required to repay to the U. S. Department of Housing and Urban Development (HUD) to settle programmatic issues that occurred under the prior administration.

 

There are substantial limitations to developing affordable housing in Miami Beach due to the high costs of construction and built-out nature of the city. Given land constraints, redevelopment is a more viable option for Miami Beach rather than new construction.

 

The strategies listed above should be analyzed further to determine their potential feasibility in Miami Beach.


Applicable Area

Citywide
Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? Does this item utilize G.O. Bond Funds?
No No 

Strategic Connection

Mobility - Increase housing options for current and future residents.