Infill Housing Initiative For Miami-Dade County Distressed Neighborhoods 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 Census Tract": 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 Opportunities: 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: 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. The Challenge: 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 mentality. 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. Financing:  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.