Suggested Programs and Policies
That Could Be Adopted by the City of Miami
to Increase Production of Affordable Housing
Presented by South Florida Community Development Coalition May 2006
INCLUSIONARY ZONING: As a condition for approval, require residential developments above a certain size to include a specified number affordable units.
LAND ASSEMBLY ASSISTANCE: There are many vacant privately owned lots in Miami's distressed neighborhoods (such a Liberty City and Little Haiti). The City should collaborate with experienced infill developers and private lenders in an aggressive strategy of acquisition followed quickly by new construction.
COMPREHENSIVE INVENTORY OF AVAILABLE LAND: Create a comprehensive inventory of the ALL vacant lots in distressed neighborhoods. 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. The inventory should have "clickable" aerial photos to zoom in on particular neighborhoods. The ideal system would have in one location information on ownership, code enforcement liens, back taxes, zoning, infrastructure, etc.
- Fact: A capable developer experienced with working in low income neighborhoods has no trouble obtaining construction loans PROVIDED THAT the following two items are available:
- readily available and reasonably priced building lots
- subsidized purchase loans for the homebuyers.
- Even in distressed neighborhoods land is becoming increasingly expensive.
- Government sponsored 2nd mortgage loan programs (such as Surtax and SHIP) place a cap on the size of the purchase prices that can qualify. For this reason higher land cost can't always be absorbed into the development cost of a house and then passed on to the customer in the form a higher sales price.
- In other words, overly high land prices may make an otherwise desirable acquisition economically unfeasible
- Solution - Forgivable Matching Acquisition Loans: The City should partner with selected lenders and experienced infill developers by providing forgivable loans that could be matched with private sector financing for use in property acquisition.
- The amount of each forgivable loan would vary from deal to deal (depending on how much acquisition subsidy was needed in order to make the proposed new affordable home in question economically feasible). The loans would be forgiven if the house, when constructed, was sold to a qualifying low income purchaser.
- Once this funding mechanism was in place the participating developers would proceed to aggressively seek out the owners of vacant parcels and negotiate standard purchase contracts with the appropriate financing contingency clause (such clauses are needed because each acquisition would be subject to a quick decision by the lenders regarding approval or disapproval).
- Bureaucratic delays in making disbursements must be avoided because most acquisitions are required to be closed within 30 days after the purchase contract has been signed.
LAND ASSEMBLY - LIEN FORECLOSURE: The City of Miami has a huge inventory of unpaid lot clearance citations affecting vacant parcels in distressed neighborhoods. The City should formally record the citations in the Public Record so as convert them into liens under the provisions of a state statute. This should be followed by an aggressively policy of judicial foreclosure. At present most of these so called "liens" are never recorded in the Public Record. An aggressive program of judicial foreclosures would provide an incentive for the owners to sell some of these long vacant parcels to people who would actually use them for a productive purpose. Many of these parcels, especially those located in the most distressed neighborhoods, would end up being owned by the City thus becoming available for redevelopment.
ALLOW "GRANNY FLATS": Adjust the zoning codes to allow construction of more "accessory dwelling units" (ADUs), also known as granny flats, garage apartments, carriage houses, or ancillary units. For some home owners, the most attractive aspect of ADUs is the potential for extra income from renting out the units. ADUs offer density without making the street appear overbuilt.
EASE ACCESS TO PREDEVELOPMENT FINANCING. Developers of single family affordable infill housing need easier access to financing for pre-development and construction costs. Small-scale developers, without the deep pockets, need pre-development financial assistance to cover the extraordinary costs associated with building scattered site houses distressed neighborhoods.
PRE-DESIGNED AND PRE-PERMITTED PLANS: The City of Miami should authorize the creation of a variety of pre-designed units with pre-approved building permits. The designs should then be made available at no cost to infill developers building affordable single family homes in distressed neighborhoods. This idea would go beyond the present "cookie cutter" approval process (wherein a developer of a multi-unit project has only to get a design approved and permitted the first time that it is used). The cookie cutter approach is helpful but a small infill developer STILL has to hire an architect to create the initial design and he STILL has to hassle with getting that initial design approved, and he STILL is limited to using that one design only.
SPEED UP THE PERMITTING PROCESS. The approval process needs to be streamlined and accelerated for scattered site, single family infill development. Suggestions include: "One-Stop Shopping" (all services surrounding the permitting process should be obtained from one designated department); set mandatory deadlines for smaller projects, assignment of facilitators, fast tracking smaller infill projects; pre-application meetings; adhere to minimum standards (reviewers should not be able to required small infill developers to build above and beyond the stated minimum code standards); self help inspections (allow inspections by certified architects rather than county staff)
HOUSING LINKAGES: local government could condition approval of larger commercial or office building projects with a requirement that affordable housing units be provided.
EMPLOYER SPONSORED HOMEOWNERSHIP PROGRAMS: Encourage large businesses to include homeownership assistance in the benefits package offered to employees at the workplace. Such a program could include a partnership with the local public/private affordable housing developer network with the employer either helping individual employees with down payment assistance or paying into a fund for such assistance.
ALLOW PAYMENT OF GOVERNMENT FEES AFTER COMPLETION OF CONSTRUCTION: Allow governmental permit, impact and utility connection fees to be paid at the time an affordable house constructed in a distressed neighborhood is sold rather collecting them "up front". Such fees are a burden to small builders because they are not financiable.