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City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
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| | | | | | | | | | Item 5.
COMMITTEE MEMORANDUM | | | |
| | | | | | | | TO: Land Use and Sustainability Committee
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| FROM: Alina T. Hudak, City Manager
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| DATE: September 28, 2022
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| | | | | | | | | TITLE: | DISCUSSION REGARDING PRESERVATION OPTIONS FOR EXISTING SINGLE-FAMILY HOMES IN MIAMI BEACH |
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| | | | | | | | HISTORY:
| HISTORY
On September 17, 2021, at the request of former Commissioner Michael Gongora, the City Commission referred a discussion item regarding preservation options for existing single-family homes in Miami Beach to the Land Use and Sustainability Committee (C4 H), as amended to remove any consideration of involuntary designation. A companion item regarding a discussion of the demolition of the homes at 5800 North Bay Road and 93 Palm Avenue (R9 AD) was included in the referral as background material.
On October 19, 2021, the LUSC discussed the matter and continued the discussion to the next available agenda of the LUSC. Additionally, Commissioner Mark Samuelian agreed to become the item sponsor. The LUSC also requested that the Administration address the following:
1. Explore the potential for creating a demolition fee.
2. Explore potential amendments to chapter 54 to include architecturally significant homes as eligible for flood waivers.
3. Explore incentives to encourage the retention of homes, including unit size and rooftop activation.
4. Provide a summary of the joint DRB and HPB workshop pertaining to architecturally significant single family homes.
On February 11, 2022, the LUSC discussed the matter and continued it to the April 8, 2022 LUSC meeting. The LUSC also requested the Administration develop a draft Ordinance creating a single-family demolition fee for the Committee to review.
On April 8, 2022 the item was deferred to the May 13, 2022 LUSC meeting. On May 13, 2022 the LUSC discussed the item and continue the item to the July 7, 2022 LUSC meeting with the following direction to the Administration:
1. Provide existing building permit fees related to demolition permits.
2. Consider including resiliency as part of future fee disbursement.
3. Consider other factors in addition to a flat fee, including lot size, existing home size and proposed home size.
On July 7, 2022 the item was deferred to the September 23, 2022 LUSC meeting, with no discussion. On August 2, 2022 Commissioner Alex Fernandez became the sponsor for the item.
BACKGROUND
On April 10, 2002, the City Commission adopted an Ordinance amending the single-family home development regulations, providing incentives for property owners to retain and rehabilitate, rather that demolish, architecturally significant single-family homes constructed prior to 1942. This ordinance established criteria for the Planning Director or designee to determine whether a single-family home constructed before 1942 is architecturally significant and provided a clearly defined process for replacement homes where full demolition was proposed and included the creation of a Single-Family Residential Review Panel (SFRRP). The panel’s authority was later replaced by the Design Review Board (DRB).
On June 11, 2003, the City Commission adopted revisions to the Land Development regulations of the City Code, amending Chapter 118, Article X, "Historic Preservation," Division 4, "Designation," to establish requirements and procedures specific to the individual, voluntary designation of single-family homes. Specifically, this Ordinance was intended to reduce the burden and expense on an individual property owner who desired to historically designate a qualifying single-family home. This simplification has enabled the Historic Preservation Board (HPB) to designate single-family homes historic in one public hearing with no application fee for the homeowner. This amendment to the City Code has resulted in 31 single-family homes being voluntarily designated by their owners since 2003.
To further incentivize the preservation and renovation of historic single-family homes, on December 8, 2004, the City enacted legislation authorizing an exemption for its portion of ad valorem taxes for improvements to historically designated homes. This legislation allows for the City’s portion of property taxes to be “frozen” at the rate they were assessed prior to improvements, including the construction of new additions, for a period of ten years.
On December 8, 2004, the City Commission adopted additional amendments to the single-family development regulations pertaining to demolition procedures for non-historically designated architecturally significant pre-1942 homes. Specifically, the Ordinance was modified to require DRB review for all new construction proposed to replace an architecturally significant pre-1942 proposed for total demolition.
In 2007 and in 2014, the City Commission adopted separate Ordinances providing incentives to property owners choosing to retain and add onto architecturally significant homes constructed prior to 1966, rather than demolish the structures. The incentives include expanded authority of staff to review and approve new additions, increases in allowable lot coverage, increases in allowable unit size and the ability to retain non-conforming setbacks of at least 5’-0” for additions. |
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| | | | | | | | ANALYSIS:
| UPDATE (February 11, 2022 LUSC)
On October 19, 2021, the LUSC discussed the item and requested that Administration provide information on the following:
1. The creation of a demolition fee.
2. Potential amendments to chapter 54 to include architecturally significant homes as eligible for flood waivers.
3. Additional incentives to encourage the retention of homes, including unit size and rooftop activation.
4. A summary of the joint DRB and HPB workshop pertaining to architecturally significant single-family homes.
The following is a summary of each of these requests:
Demolition Fee
As noted below, a joint DRB/HPB meeting was held on November 9, 2021. The joint Board adopted a series of recommendations including a recommendation regarding the creation of a demolition fee. Specifically, the joint Board recommended that a demolition fee be created for the demolition of any single-family home that is 50 years of age or older. The joint Board further recommended that such fees be allocated for resiliency improvements to historically designated homes, the promotion of historic designation and the documentation of architecturally and historically significant homes. The joint Board did not issue a recommendation specific to the creation of additional incentives to encourage the retention of existing homes.
Potential amendments to chapter 54 to include architecturally significant homes as eligible for flood waivers.
According to FEMA regulations, communities may exempt historic buildings from National Flood Insurance Preprogram (NFIP) substantial improvement and substantial damage requirements. However, the improvement must not preclude the structures continued designation as historic and must be the minimum necessary to preserve its historic character.
FEMA has defined Historic Structure as follows:
1. Listed individually in the National Register of Historic Places or preliminarily determined as meeting the requirements for individual listing on the National Register;
2. Certified or preliminarily determined as contributing to the historical significance of a registered historic district;
3. Individually listed on a state inventory of historic places; or
4. Individually listed on a local inventory of historic places.
Based upon the research of the Engineering Division of the Building Department, FEMA does not have any exemptions in place for “Architecturally Significant” structures and would not approve less stringent requirements. Additionally, one of the conditions for communities to participate in NFIP and Community Rating System (CRS) is to comply fully with NFIP Regulations.
Considering the foregoing, the City would not be able to amend Chapter 54 to include architecturally significant homes as eligible for flood waivers.
Additional incentives to encourage the retention of homes, including unit size and rooftop activation.
As noted above, the current development incentives listed in Section 142-108, pertaining to the retention of architecturally significant homes are very generous. These include, but are not limited to, an allowable lot coverage of 40% and an allowable unit size of 60%. Some potential additional incentives for projects that propose to substantially retain and preserve an architecturally significant single-family home could include the following:
• Allowing understory areas proposed for new construction to be approved at staff level, instead of the DRB.
• Allowing certain types of height waivers for new construction to be approved at staff level, instead of the DRB.
• Allowing more roof deck space for new and existing construction.
Summary of the joint DRB and HPB workshop pertaining to architecturally significant single-family homes.
On November 9, 2021, the Design Review Board and Historic Preservation Board held a joint meeting to discuss options for the preservation of architecturally and historically significant single-family homes. The joint board made the following recommendations to the LUSC:
1. Explore a demolition ordinance similar to the City of Coral Gables. In summary, such ordinance would require that all building permits for substantial demolition (> 50%) of a single-family home that is 50 years of age or older be reviewed by the Historic Preservation Officer to determine if the home meets the minimum criteria for historic designation. In the event the home satisfies the designation criteria, it would be referred to the Historic Preservation Board for possible historic designation.
2. The creation of a fee for the demolition of single-family homes that are 50 years of age or older. Such fees should be allocated for resiliency improvements to historic homes, marketing and promotion, and documentation of architecturally significant and historic homes.
3. Modify the pre-1942 architecturally significant home (Section 142-108) regulations to be applicable to homes that are 50 years of age or older.
4. Expand the authority of the HPB to include the review of all homes that are 50 years of age or older, inclusive of homes that are not historically designated.
5. Expand the authority of the DRB to include the authority to deny demolition in certain instances by a super majority vote.
In addition to the joint recommendations above, the following recommendation was approved unanimously by the HPB (due to the DRB’s lack of a quorum):
1. Require that buildings proposed to be substantially altered or demolished be formally documented in accordance with the Historic American Building Standards (HABS).
UPDATE (May 13, 2022 LUSC)
The issuance of demolition permits for single family residential structures within the city has increased significantly over the past several years. This may be due to several reasons including high property values combined with lesser building values, limited housing stock and concerns relative to flooding impacts of sea level rise.
The permit fees associated with building demolitions cover the administrative costs of the process but do not address other impacts of demolition including changes in the architectural character of neighborhoods and a reduction in the diversity of the city’s housing stock decreasing the availability of more affordable housing. The introduction of a fee for the demolition of single-family homes, could help to mitigate these impacts.
A demolition fee could be a flat, fixed amount, a percentage of the permit fee, or a fee based on the size or appraised value of the home. Based on research of other communities, a flat fee appears to be the most prevalent. It is also important to identify recipients for the revenue collected. Below is a summary of several demolition fee programs effectuated by communities throughout the country.
Highland Park, IL
In 2002, the City of Highland Park, a Chicago area suburb, introduced a demolition tax for the purpose of providing funding for affordable housing projects. This demolition tax applies to the demolition of 50% or more of any residential structure. The tax for the demolition of a single family home is $10,000 and $3,000 per unit within multi-family buildings. The tax revenue is deposited into a Housing Trust Fund, administered by the Housing Commission. The money primarily goes to Community Partners for Affordable Housing which leverages the money to obtain state and federal grants. Highland Park’s demolition fee has generated than $3.3 million for local affordable housing initiatives, between 2003 and 2014.
Evanston, IL
In 2005, the City of Evanston, a Chicago area suburb, adopted a tax for the demolition of any residential structure within the city. The purpose of the tax is to provide a source of funding for the creation, maintenance and improvement of safe and affordable housing and to enhance preservation and maintenance of the city’s cultural and economic diversity. Revenue from the tax is deposited into the Affordable Housing Fund. The tax amount established as $15,000 for the demolition of a single-family home and $5,000 per residential unit within a multi-family building, adjusted annually based on the Consumer Price Index (currently $15,453 for single-family/$5,151 per residential unit for multi-family).
Sarasota, FL
In 2007, the City of Sarasota adopted an amendment to the City’s Administrative Amendments to the Florida Building Code increasing fees for demolition permits. Currently, the City allocates $100 from every demolition permit fee plus an additional $0.10 per gross square foot for all commercial and multi-family buildings to the City’s Historic Preservation Program. The money collected is put into the Sarasota Demolition Fund which is used to support City historic preservation projects such as the research and survey of properties for historic designation and may also be used as matching dollars for historic preservation grant applications.
City of Lake Oswego, OR
In 2019, the City of Lake Oswego, a Portland area suburb, introduced a demolition tax with the intent of disincentivizing the replacement of smaller, more affordable single-family homes with larger, more expensive homes. In addition to regular building permit fees, a tax of $15,000 is added to a permit to demolish any single-family home within the city. Revenue from the tax is solely dedicated to the maintenance of city park properties and facilities. The city is currently exploring potential changes including allocating some of the revenue for affordable housing initiatives.
City of Chicago, IL
The City of Chicago adopted a 1-year pilot project in 2021 to collect additional fees for the demolition of buildings within specified neighborhoods. In addition to regular building permit fees, the city charges $15,000 for the demolition of a single-family home, and $5,000 per unit for multifamily buildings. Revenue from the additional fees helps fund the city’s Affordable Housing Opportunity fund. The pilot was recently reviewed by the City Council and was extended through 2024.
New Orleans, LA
The City of New Orleans includes a 50% surcharge on the permit fee for the demolition of buildings within a historic district to cover additional administrative costs for reviewing the demolition of such buildings and the money collect is deposited into the city’s general fund.
It is important to note that many of these jurisdictions provide for exemptions or waivers of the demolition fee in certain circumstances. These circumstances generally include the following:
• Demolition is necessary due to a natural disaster
• Demolition is necessary due to health or safety reasons
• Building is being replaced with affordable housing
• Demolition is necessary due to factors beyond the owner’s control and reasonable ability to remedy
UPDATE (September 23, 2022 LUSC)
The following is an update regarding the previous direction of the LUSC on May 13, 2022:
Provide existing building permit fees related to demolition permits.
The current fees for a demolition permit for residential are 1.7% of the cost of demolishing the building, plus all applicable surcharges and interdepartmental review fees. The cost of the demolition of a home is based upon a certified construction estimate provided at the time of the demolition permit application. By way of example, if the cost to demolish a single family home is $27,000.00, the demolition permit fee would be $459.00 (1.7%). The surcharges and interdepartmental fees would be an additional $595.00, bringing the total permit fee, in this particular instance, to $1,054.00.
Consider including resiliency as part of future fee disbursement.
The attached draft Ordinance has been revised to include both resiliency, as well as workforce and affordable housing.
Consider other factors in addition to a flat fee, including lot size, existing home size and proposed home size.
The size of single-family lots, as well as the size of new homes, varies widely on Miami Beach. Additionally, most homes being demolished are fairly modest in size and well under the current maximum allowable unit size of 50%. As such, the Administration believes that a flat fee would be the best option. Based on research of other communities, as noted herein, a flat fee appears to be the most prevalent in similar City’s.
DEMOLITION FEE ANALYSIS
Given the current property values of single-family parcels in the city, it is unlikely a demolition fee would be a significant deterrent to owners wishing to demolish existing homes and construct new residences. The creation of a demolition fee could, however, help to advance current City initiatives.
As indicated previously, one such program that may benefit from additional revenue is the recently adopted Resilience Fund created to address private property flooding and sea level rise resilience. Another possible recipient is the City’s Affordable Housing Program. A third option is the creation of a new fund, for the sole purpose of providing financial assistance to owners of historically designated single-family homes.
In 2019, the firm of KCI was retained by the City to research best practices and provide the City with recommendations for the creation of a historic preservation fund. The study, completed in March 2020, could be used to assist in the creation of a framework for implementation of a fund dedicated to improvements for historic single-family homes. Similar to the Miami Beach Resiliency Fund adopted by the City in 2020, the KCI report recommended a matching grant structure and an independent committee to review and rank applications for the distribution of funds. This type of structure would likely require additional staffing to ensure the program is well-run, can meet demand, and complies with all anticipated audit requirements.
As it pertains to a demolition fee structure for Miami Beach, the attached draft Ordinance, which includes a demolition fee in Appendix A, has been updated and contains the following revised provisions, based upon the direction of the LUSC on May 13, 2022:
1. A flat fee of $25,000.00 shall be collected at the time a building permit for demolition is issued. The Administration had previously recommended a flat fee of $15,000, as this amount was consistent with several of the demolition fee programs noted above. Regardless of the fee amount, the framework would remain the same and would be relatively simple to implement.
2. The demolition fee shall be applicable to the demolition of all single-family homes located within single family residential districts within the City. Although most homes being demolished within the city were constructed prior to 1966, the demolition of any home creates impacts on environment and the residential neighborhood where the home is located.
3. The funds generated by the demolition fee would go directly to an established funds for historic preservation, affordable housing and/or resiliency purposes.
4. The demolition fee shall not be applicable when demolition is proposed in conjunction with the construction of low and/or moderate-income housing or workforce housing, or when demolition is due to a catastrophic event, such as fire, tornado, tropical storm, hurricane, or other act of God, as determined by the building official.
The attached draft Ordinance includes all the aforementioned provisions. If there is consensus on moving this proposal forward to the full City Commission, additional analysis will need to be conducted as it pertains to the administration of this fee program, including applicable staffing, identifying recipients for the funds collected and a method for deciding on specific recipients. Based upon the current number of single-family homes demolished per year, it is anticipated that this fund could grow significantly in the coming years.
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| | | | | | | | CONCLUSION:
| In view of the foregoing, the Administration recommends the following:
1. The Land Use and Sustainability Committee discuss the item and provide appropriate policy direction.
2. If there is consensus on amending Appendix A to create a demolition fee, as more specifically noted herein, it is further recommended that direction be provided to bring a First Reading Ordinance to the City Commission. |
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| | | | | | | | | Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? | | Does this item utilize G.O. Bond Funds? | | | Yes | | No | |
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