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CITY OF MIAMI FAILS TO ADHERE TO ITS CONSOLIDATED PLAN
By John Little
As a recipient of federal CDBG and HOME funds the City of Miami is required to update its "Consolidated Plan" once every five years. The current Consolidated Plan (adopted in 1999) made affordable homeownership a cornerstone. The centerpiece was an innovative "Homeownership Zone Program" whose stated goal was to "create home ownership opportunities for very low, low, and moderate-income families" in seven of the City's most economically distressed neighborhoods.
We are now three years into the Plan and yet the City is implementing only one of the seven promised Zones (Model Cities).
The full text of the City's Consolidated Plan can be found at:
http://www.ci.miami.fl.us/Community_Development/hud5yearplan.htm
Several months ago the City's Community Development Department proposed terminating all administrative funding for nonprofits working to create affordable homeownership in distressed neighborhoods. The resulting uproar from the neighborhoods caused the City Commission to temporarily postpone taking action. Individual City Commissioners urged that a "Housing Summit" be held. Despite the passage of time the Summit has not yet been scheduled.
The Summit is needed in order to gain a clearer understanding of the barriers that face developers who try to create affordable homeownership in inner-city neighborhoods close to downtown. Land costs are sky rocketing in these areas due to the pressures of gentrification yet these neighborhoods remain the home for many thousands of very low income residents.
Suburban style single family homes are cost prohibitive in these areas. The only practical alternative for creating home ownership is multifamily condominium projects - but - development costs are much higher than with single family developments and, unlike subsidized rental projects, financing is much more of a challenge.
Development costs are high for larger condo projects yet the sale price of the units must be kept low in order to keep them affordable. Thus the cost of development exceeds the gross amounts realized from the sale of the units. As a result, a large amount of subsidy is needed to make these projects feasible. The only source for such subsidy is local government. The policies and practices of both Miami-Dade County and the City of Miami in administering their subsidy programs, however, have often made development of these projects more difficult and time consuming than it needed to be.
The City of Miami needs to decide if it really wants to create homeownership in these neighborhoods or not. If so, they need to commit to implementing more effective strategies and to pursuing more effective partnerships with nonprofit developers.
Hopefully the issue of Homeownership Zones will be brought up at the Summit (if it is ever held). The process of crafting the new Zones will give the City the opportunity of finally adopting the types of policies that can dramatically increase the production of affordable ownership units.
It is our belief that the Zones, when implemented, should be holistic and driven by the bottoms-up participation of local residents (rather than a top-down approach narrowly focused solely on housing). For ideas on how best to design and implement a Zone program readers can review the Coalition's "Neighborhood Development Zone Initiative" (click below).
Neighborhood Development Zones