The Administration recommends adopting the Resolution.

The State Housing Initiatives Partnership Program (SHIP), administered through the Florida Housing Finance Corporation (FHFC), was established in 1992 by the William E. Sadowski Affordable Housing Act to stimulate the production of affordable housing statewide. SHIP Program funds are derived from documentary stamp levies on real estate transactions and held in the SHIP Program Trust Fund.  Annually, FHFC allocates SHIP program funds among entitlement communities on a formula basis.  All entitlement jurisdictions must have an approved Local Housing Assistance Plan (“LHAP”) that describes the expenditure plan for housing strategies for the next three (3) years, from 2022 thru 2025.

SHIP program funds serve to increase access to affordable housing for income-eligible participants. The LHAP is intended to increase the availability of affordable residential units by combining local resources and cost-saving measures into a local housing partnership using public and private funds to reduce the cost of housing.

The LHAP must be approved by the Affordable Housing Advisory Committee (AHAC), the Mayor and City Commission, and the Florida Housing Finance Corporation (FHFC) by July 1, 2022 to implement the new strategies by October 1 of the same year. The City’s draft FY 22-25 LHAP was reviewed and approved by the AHAC on March 15, 2022. On April 6, 2022, the Mayor and City Commission approved the LHAP for submission to the FHFC via Resolution No. 2022-32096. Subsequently, the City submitted the Plan for review and approval to the FHFC’s SHIP Review Committee. The FHFC conditionally approved the Plan, contingent upon the incorporation of requested revisions before the final submission deadline. The Administration further reviewed various sections in the Plan for consistency, including the New Construction housing strategy and the current equity sharing policy for first time homebuyers.

The Administration is proposing to continue utilizing strategies for the broadest range of income-eligible households. The Administration is proposing the adoption of the following strategies in the FY 22-25 LHAP:

A.    Purchase Assistance with Rehab

B.    Owner-Occupied Rehabilitation

C.   Foreclosure Prevention

D.   New Construction

E.    Rental Development

F.    Disaster Repair

Following the receipt of the SHIP Review Committee’s comments, the Administration requested technical assistance from the Florida Housing Coalition to ensure the new construction strategy was in compliance with FHFC standards. The Administration recommends incorporating the changes to define the strategy as the following:

“Summary: To develop homeownership opportunities to assist eligible buyers to purchase affordable housing in Miami Beach. Funds will be provided to developers to be used to finance the costs associated with site acquisition/development, and hard and soft construction costs. The property must be sold to an income-eligible homebuyer. Upon sale, the benefit of the SHIP Program funding will be passed on as down payment assistance, closing costs and gap financing to the homebuyer.”

The updated language will provide further clarification to possible applicants during the Request for Proposal process. The City has not implemented the strategy thus far, as all prior funding has been committed to the Purchase Assistance with Rehab and Owner-Occupied Rehab strategy. The City currently has over 80 persons on the waitlist for first time homebuyer assistance and six (6) persons for the Owner-Occupied strategy.

Additionally, the Administration sought technical assistance for the equity sharing provision related to the Purchase Assistance with Rehabilitation housing strategy, also known as the First-Time Homebuyer Program. The Florida Housing Coalition provided examples from three different municipalities that have tiered approaches to their equity sharing provision.   

The City’s current equity sharing policy in the LHAP and the loan documents states:  if the sale, conveyance or transfer occurs between the first and fifth year, the City shall be paid a percentage of the profit, based upon the percentage of the City’s contribution to the purchase of the Premises; to wit:  if the sales price for the Premises was $100,000 and the City provided a $50,000 mortgage, the City shall also be paid 50% of the profit; If the sale, conveyance or transfer occurs between the sixth and tenth year, the City shall be paid fifty percent (50%) of the profit; and if the sale, conveyance or transfer occurs between the eleventh and fifteenth year, the City shall be paid twenty-five percent (25%) of the profit. The profit is defined as the sales price at the time of the sale, or fair market value (in the case of a conveyance or transfer), minus the sales price of the Premises at the time the homeowner acquired it with the assistance of the SHIP funds. If the homeowner had equity in the property before the City’s awarded funds, the City will prorate the rate based on the City’s contribution. Fair Market Value shall be determined pursuant to an appraisal, prepared by an appraiser who is licensed in the State of Florida, which shall be procured by the City and paid by the Owner.

Based on the information provided, the Administration does not recommend further reductions to the equity sharing policy and recommends amending the language in the LHAP relating to the period between the sixth and tenth year as follows:

“If the sale, conveyance or transfer occurs between the sixth and tenth year, the City shall be paid forty percent (40%) of the profit; and if the sale, conveyance or transfer occurs between the eleventh and fifteenth year, the City shall be paid twenty-five percent (25%) of the profit.”

The revised language would provide a tiered approach, yet it will continue to disincentivize homebuyers from leaving their unit of residence before fifteen (15) years. Once the LHAP is approved by the Mayor and City Commission, City Administration will submit the final LHAP to the FHFC by July 1, 2022. 

The Administration recommends approval and adoption of the amendment to the City of Miami Beach Local Housing Assistance Plan (LHAP) for the State Housing Initiatives Partnership (SHIP) Program for FY 22/23, 23/24 and 24/25, as required by the SHIP Program Act, subsections 420.907 - 420.9079; authorizing execution of any necessary certifications by the Mayor and the City Clerk; and further authorizing the Administration to submit the LHAP to the Florida Housing Finance Corporation (FHFC) for its review and approval.