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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:
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).