AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, AMENDING CHAPTER 14 OF THE CODE OF THE CITY OF MIAMI BEACH ENTITLED “BUILDING REGULATIONS,” BY AMENDING ARTICLE II THEREOF, ENTITLED “CONSTRUCTION STANDARDS,” BY AMENDING DIVISION 2, ENTITLED “PERMIT FEES,” BY AMENDING SECTION 14-69 THEREOF, ENTITLED “EMPLOYEE TRAINING, EDUCATION, SAFETY AND TECHNOLOGY ENHANCEMENTS,” TO PROVIDE THAT THE TRAINING AND TECHNOLOGY SURCHARGE SHALL NOT APPLY TO RESIDENTIAL DEVELOPMENTS FOR AFFORDABLE HOUSING UNITS OR WORKFORCE HOUSING UNITS THAT SATISFY ALL APPLICABLE REQUIREMENTS OF CHAPTER 58 OF THE CITY CODE RELATING TO AFFORDABLE HOUSING UNITS OR WORKFORCE HOUSING UNITS, RESPECTIVELY; PROVIDING FOR REPEALER, SEVERABILITY, CODIFICATION AND AN EFFECTIVE DATE.

Approve the Ordinance exempting affordable and workforce housing developments from payment of the Training and Technology surcharge on building permits, through December 31, 2025.

On May 8, 2019, the Mayor and City Commission referred an item to the Finance and Citywide Projects Committee (Committee) to discuss ways the City could assist the Housing Authority of the City of Miami Beach (HACMB) to create affordable and workforce housing at several properties in North Beach owned by HACMB.  Specifically, the HACMB was awarded funding from the Florida Housing Finance Corporation (FHFC) to develop 22 units of affordable workforce housing at 1144 Marseille Drive and 20 units at 1158 Marseilles Drive. The housing projects will serve people earning up to 80% area median income (AMI).

The chart below indicates the Area Median Income for our area:

As set forth more fully below, although the genesis of the referral was specific to HACMB, the intent of the referral, and the Committee’s subsequent analysis, was to consider ways to incentivize the entire category of projects that qualify as affordable or workforce housing projects (i.e., projects serving families whose incomes are up to 140% of the County’s AMI), consistent with the City’s planning goals and applicable law.

Increasing affordable housing options in the City 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. 

In furtherance of the City’s strategic planning goals, with respect to the City’s mobility fees, in 2019, the City Commission created an incentive area that reduces the mobility fees for all affordable/workforce projects north of 63rd Street by 62.5% through 2022 and on a sliding scale through 2025. Additionally, the standard mobility fees for workforce and affordable housing are 50% and 25% respectively of the total fee required for market rate units. With the reductions currently provided, a 112-unit affordable housing development in North Beach would pay $15,918 in mobility fees if fees were paid prior to August 31, 2022. The project would also pay approximately $54,460 in parks concurrency mitigation fees.  Accordingly, based on the comprehensive incentives recently approved by the City Commission in 2019 as outlined above, the Committee did not recommend any further reductions to the mobility fees imposed by the City for affordable/workforce housing projects.

With respect to building permit fees, construction permit plans are reviewed an average of four times before the plans are consistent with all applicable codes and in a form that can be approved by regulatory departments and agencies. Additionally, each discipline conducts several inspections throughout the building process to ensure consistency between approved plans and actual construction. Due to the extensive city resources required to review construction plans, the Committee did not recommend reducing Planning, Fire, Public Works and Building Department permit fees, with the exception of the Technology & Training Surcharge discussed below.

The Building, Planning, Fire and Public Works Departments are supportive of waiving the training and technology fee for affordable and workforce housing developments. This fee is currently 6% of the Building permit fee and is assessed by the Planning, Public Works, Fire and Building Departments. This fee is applied to all projects throughout the City.

The Administration anticipates that the ordinance exemption for affordable/workforce housing projects would result in an estimated fiscal impact on the City’s revenues of approximately $18,000 annually.  As the exemption would only apply to affordable/workforce housing, a very narrow subset of all development projects in the City, the City’s Chief Financial Officer advised the Committee that the reduction in revenues could be absorbed without significantly affecting planned technology improvements in the next few years.