Infill Housing Initiative
For Miami-Dade County Distressed
This Initiative consists of ideas for an integrated infill housing development strategy
for the mostdistressed
census tracts in Miami-Dade County. Leadership for the Initiative must be provided
by the Miami-Dade County and the City of Miami's Department of Community Development.
The Initiative can succeeded, however, only if a true spirt of partnership evolves
between local government, private sector developers (both nonprofit and for profit)
and neighborhood residents. The components of the Initiative, collectively, must
add up to a systematic attack on the barriers that are inhibiting normal market
driven development. Bits and pieces of the Initiative are already in place there
are major gaps and there is no integrated vision.
What is a "Distressed
According to the U.S. Census Bureau, a "distressed" census track is one
that has a 40%+ poverty rate . These tracks are concentrated in the following communities:
Little Haiti, West Little River, East Little Havana, Model Cities (including Liberty
City, Edison, and Brownsville Opa Locka, Overtown, Wynwood, and Allahpattah. Geographically,
these neighborhoods cone out from downtown northward towards the Broward County
line. They are primarily African American but have significant Haitian communities
and mixed Hispanic populations.
Why Focus on These Neighborhoods?
Consider the following .
Between 1985 and 1997 the number of "distressed"
census tracks doubled (!)
The population in many of these neighborhoods
actually declined during the 1990's
Both Miami-Dade County and the City of Miami rank
near the top of U.S.A. cities in percentage of populations below the poverty line.
Lack of Market Based Development
For-profit developers will not go into these neighborhoods without incentives. Basic
issues of financial feasibility prevent the private sector from taking on ventures
in these low income neighborhoods. Barriers include: decrepit infrastructure (sewers,
water, etc.), low appraised values, high costs of development, high costs of land,
expensive "brownfield" cleanup, expensive lien clearance, high relocation
expenses, the difficulty of dealing with the patchwork pattern of real estate ownership.
Local government inadvertently imposes additional costs by its unnecessarily cumbersome
construction approval process. Yet there ARE underutilized opportunities, mainly,
the large number of vacant lots that could be land banked relatively cheaply and
the availability of significant subsided permanent financing. Developers could make
money building houses and businesses if the barriers where mitigated. Simply put,
the private sector does not find opportunities here because it is simply too difficult
and costly to do so profitably.
The goal of the Initiative is to accelerate the
development of new housing in the distressed census tracts as part of a comprehensive
community revitalization strategy for those neighborhoods.
Developers have difficulty finding market opportunities in older low income neighborhoods.
Redevelopment efforts in these neighborhoods is risky considering that they are
forsaken areas that the local government has neglected and which often lack sufficient
infrastructure. Conservative financial institutions will not participate unless
the risk can be reduced. For the smaller-scale developers without the deep pockets
and for the nonprofits, financial assistance is needed to cover the extraordinary
costs associated with redevelopment. Redevelopment often involves demolition, clearing
title, assembling land, cleaning up brownfields, relocating residents or businesses,
and correcting infra- structure deficiencies. A primary reason why the private sector
has not engaged in this type of redevelopment has been that the projected cost of
production for unsubscribed ventures exceeds the appraised value of the end product
(this happens when there are no neighborhood comparables of equal value). Obviously
a lender will not finance a project when the equation is out of balance. The nonprofit
organizations and other builders of small-scale affordable housing can fill a demand
in the market in which the most for-profit developers are not interested. To be
successful, those smaller-scale developers need financial assistance to remedy site-specific
infrastructure problems, along with the other exceptional costs of developing and
retrofitting within urban areas,
The Ingredients of Success:
The Initiative must consist of a well focused
set of interrelated programs that will dramatically increase production of infill
units in Brownsville and similar neighborhoods. Create new create a partnership
between local government and nonprofit sector developers to dramatically increase
the construction of new home ownership units that are affordable to low and moderate
income families. To be successful the initiative must address specific barriers
that inhibit market driven housing development activities. These include:
Process: a system must be put in
place which oversees and coordinates the whole Initiative. There must be an entrepreneurial
Land: Provide access to developable
parcels, with clear title and adequate infrastructure, must be assembled and made
easily available to participating developers
Create a comprehensive inventory of the properties
owned by local government that are available for redevelopment. The inventory of
properties should posted to a website in a user friendly format that allows potential
developers to easily browse through the available properties to identify the parcels
that they might be interested. The system should be set up similarly to what the
Miami-Dade Property Appraiser uses for its system with "clickable" aerial
photos that allow the user to zoom in on particular neighborhoods. The available
parcels would be highlighted on the aerial photos and users would be able to click
on lots of interest to access all of the relevant data on particular parcels.
Properties should be categorized for development
depending on their current title/lien status. Those which can reasonably transferred
within a year should be marketed to interested non-profit developers.
"Banking: of additional lots: Local
government should commit to an aggressive program of acquiring additional land.
New land assembly techniques should be explored such as a better system for utilizing
tax delinquent properties and innovative partnerships with nonprofit intermediaries.
Title and Environmental Preclearance: Title
on all land in program must be cleared prior making it available for development.
All lots should have undergone any required environmental preclearance procedures
prior to being put out for development.
Developer Friendly Conveyances: Local government
should convey lots to developers in a manner that allows them to be utilized as
collateral for construction financing. To make projects in these neighborhoods more
economically feasible, lots could be conveyed to developers at no cost with local
government retaining a reversionary interest to allow for the recapture of property
where a home is not built in a timely fashion.
Pre-Designed and Pre-Permitted Building
Plans : In order keep predevelopment costs and to speed the approval process
we must create pre-designed units with pre-approved building permits. Developers
should be allowed enough variation in models to prevent low-income housing from
becoming easily identifiable, while also providing the necessary flexibility when
developing odd-shaped parcels.
Infrastructure: Local government
must assist with infrastructure related costs such as for water & sewer connection
fees, utilities hookups, sidewalk requirements, etc., should be waived for units
be built by CDC developers pursuant to this Initiative. Under the present system
developers in South Florida are required to pay for the cost of upgrading the infrastructure
needed by their projects. In the long neglected low income neighborhoods, however,
these costs can be considerable. To make new housing units affordable, therefore,
an alternative method must be found.
Coordinate CDBG cycle with budgeting process
for Public Works in order to leverage infrastructure investment with CDBG development.
A structured RFA process which targets specific
communities, would also allow for further coordination.
Pipeline projects with infrastructure needs.
The County could solicit a local match to federal funding for development from sources
such as the Capital Outlay Reserve.
Assured Permanent Financing for Homebuyers
of Qualifying Projects: Developers constructing units in the target distressed
neighborhoods should not have to hassel with a cumbersome RFP process in order to
obtain second mortgage affordable loan commitements for the purchasers of their
units. Local governement should set aside sufficient subsidized mortgage funds
to cover ALL affordable units developed in compliance with published criteria.
Access to Pre-Development Money: smaller-scale
developers without the deep pockets need predevelopment financial assistance to
cover the extraordinary costs associated with redevelopment of low income neighborhoods.Local
government should commit portion of available federal CDBG or HOME dollars for predevelopment
loans and grants for nonprofit developers. This money can be utilized to either
provide funds to the non-profit developers directly or to serve to underwrite potential
losses on a Loan Fund developed by a consortium of financial institutions.
Home Ownership Counseling & Processing
: low income buyers will need an effective homeownership training program and hands-on
assistance in qualifying for financing and preparing for the closings.