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Miami Dade County's Proposed Affordability Controls
For the Infill Housing Initiative


In 2006 the Miami-Dade County Commission has adopted a new Infill Housing OrdinanceClick here to view a copy of the legislation.

The Ordinance covers County owned lots that are to be deeded to developers for the construction of affordable houses. It will also cover privately owned lots whose owners apply for the clearance of County liens.

The Ordinance is apparently being rushed through in reaction to a Miami Herald article about flaws in the administration of the current infill program.  Some believe that major or minor revisions are needed to almost every paragraph. The legislation was written without consulting lenders or experienced developers. Critics have suggested that the Ordinance not be rushed through without getting additional input. County officials should sit down in round table discussions with experienced developers and lenders to get their input.

In particular, the affordability mechanism seems poorly thought out and could cause problems unanticipated by the drafters (it is to be imposed by means of a Restrictive Covenant placed in the chain of title for each property).  Consider the following:

In summary, the affordability mechanism may not prove to be workable in the long run. It has several serious drawbacks. Primarily, it will impose a significant ongoing administrative responsibility on the County. Owners, including second and third owners, will constantly need to know the price at which they can sell their property and the income limits of potential buyers. Hence, the County must be constantly monitoring so that it can respond to such inquiries. Maintaining a highly efficient, responsive, and user friendly County bureaucracy will be absolutely critical if disaster is to be avoided.  There is also be a continuing educational requirement as second and third owners will be largely unaware of the purpose of the original affordability program. Additionally most real estate agents will not handle transactions involving these houses due to the restrictions on the sales price and the potential buyers. Lenders will not want to participate for the same reasons and because their mortgages will be subordinate to the restrictions. Finally, the artificially low resale prices will have a depressing affect on market rate resale prices for other houses in the targeted distressed neighborhoods and accelerating the downward spiral of social and economic conditions.  

There are alternate solution that are perhaps more desirable.
Click here to read an article on the advantages and disadvantages of the various alternatives for preserving affordabilty.