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Home My WebLink AboutExhibit A SUBThe City of Miami Affordable Housing Master Plan Needs Assessment & Technical Compendium May 2019 FlU Metropolitan Center FLORIDA INTERNATIONAL UNIVERSITY © 2019 Florida International University Metropolitan Center All rights reserved. NO PART OF THE REPORT MAY BE REPRODUCED IN ANY FORM, WITHOUT PERMISSION IN WRITING FROM THE FIU METROPOLITAN CENTER Metropolitan Center FLORIDA INTERNATIONAL UNIVERSITY The Florida International University Metropolitan Center is Florida's leading urban policy think tank and solutions center. Established in 1997, the Center provides economic development, strategic planning, community revitalization, and performance improvement services to public, private and non-profit organizations in South Florida. Its staff and senior researchers are leaders in their respective fields, and bring extensive research, practical, and professional experience to each project. The Center's research has catalyzed major policy initiatives and projects in housing, economic redevelopment, transportation, social services, and health services throughout South Florida. Study Team Edward Murray, Ph.D., AICP Associate Director, FIU Metropolitan Center Kevin T. Greiner, MUP, JD Senior Fellow, FIU Metropolitan Center Maria Ilcheva, Ph.D. Assistant Director of Planning and Operations, FIU Metropolitan Center Nika Langevin Research Specialist, FIU Metropolitan Center Table of Contents Introduction 1 Defining Affordable Housing and Measuring Affordability 1 Methodology and Scope of Study 4 The State of Affordable Housing In Miami 4 The City of Miami Affordable Housing Master Plan 6 Goal Statement 6 Guiding Principles 6 Housing Supply Analysis 7 Housing Inventory 7 Tightening of Vacancy Rates and Changing Vacancy Structure 11 Competing in a Global Residential Real Estate Market 11 Construction Costs 13 Rapidly Rising Home Values, Sale Prices, and Rents 14 An Aging Housing Stock 16 Rapid Decline in the Supply of Mid and Low -Price Housing Units 17 Land and Redevelopment Capacity 19 Major Planned Public Housing Projects 24 Demand Analysis 2.c Population Growth and Household Formation 27 Employment Base 28 Job Growth 30 City Resident Occupations 31 Earnings 32 Household Incomes and Income Disparity 34 Changes in Housing Preference 38 Miami's Affordable Housing Gap 39 Measuring the City's Affordability Gap 39 Housing Price / Income Multiplier 39 Housing and Transportation Costs 40 Cost Burden 42 Affordable Housing Demand -Supply Analysis 45 Targeting Affordable Housing Development Opportunity 62 The Geography of Affordable Housing Opportunity 62 Introduction The City of Miami Affordable Housing Needs Assessment provides a current market perspective on the key demand and supply factors impacting the production and availability of affordable housing in the City of Miami. In the post -recession economic recovery period since 2012, significant changes have occurred in the City and Miami- Dade County's housing market that have impacted housing supply and demand and overall affordability. The contributing factors and conditions include a trend toward high -end, multi -family housing development, a lack of affordable housing production, low vacancy rates and stagnant wages and household incomes. In particular, affordable rental housing production has not kept pace with increasing affordable rental housing demand. Further, escalating rent prices fueled by a rental housing shortage are significantly impacting Miami's working families and households. The vast preponderance of City workers earn wages in service sector occupations, including retail trade, leisure and hospitality, and educational and health services. The household incomes of these service sector workers limit housing choices to affordable rental housing opportunities, where available. A basic premise of all housing markets is the need to create and maintain a "spectrum" of housing choice and opportunity for local residents. This axiom establishes that housing choice and needs differ in most communities due to a variety of factors including household income, population age, proximity of employment and mere preference. A spectrum of owner and rental housing choice and opportunity is particularly important in supporting the range of income groups that reside in the City. An adequate supply of affordable owner and rental housing provides choice and opportunity for service sector working individuals and families who comprise the majority of the City's workforce. An understanding of the shifting demands for housing is critical for the creation of effective housing policies and strategies. The increasing demand for worker housing documented in prior housing studies has magnified the importance of providing a wide spectrum of owner and renter choice and opportunity with respect to affordability, location and access to jobs. Defining Affordable Housing and Measuring Affordability Housing affordability is generally defined as the capacity of households to consume housing services and, specifically, the relationship between household incomes and prevailing housing prices and rents. The standard most used by various units of government is that households should spend no more than 30 percent of their income on housing. Families who pay more than 30 percent of their income for housing are considered cost -burdened and may have difficulty affording necessities such as food, clothing, transportation and medical care. This is also the standard definition for housing programs administered by the Department of Housing and Urban Development (HUD) and most state programs, including various housing programs administered through the State of Florida's Housing Finance Corporation (FHFC) and Department of Economic Opportunity (DEO). 1 Affordability Indices One measure of housing affordability is the cost of homeownership, commonly conveyed through housing affordability indices. These indices generally indicate that affordability increased substantially toward the end of the last decade, primarily as a result of lower interest rates during that period. A housing affordability index for an area brings together the price and the income elements that contribute to housing affordability. The following describes the most recognized affordability indices: National Association of Realtors (NAR) Index The most common index is that produced by the National Association of Realtors (NAR). The affordability index measures whether or not a typical family could qualify for a mortgage loan on a typical home. A typical home is defined as the national median -priced, existing single- family home as calculated by NAR. The typical family is defined as one earning the median family income as reported by the U.S. Bureau of the Census. The prevailing mortgage interest rate is the effective rate on loans closed on existing homes from the Federal Housing Finance Board and HSH Associates, Butler, N.J. These components are used to determine if the median income family can qualify for a mortgage on a typical home. To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median- priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median -priced home, assuming a 20 percent down payment. For example, a composite Housing Affordability Index (HAI) of 120.0 means a family earning the median family income has 120 percent of the income necessary to qualify for a conventional loan covering 80 percent of a median -priced existing single-family home. An increase in the HAI, then, shows that this family is more able to afford the median priced home. The calculation assumes a down payment of 20 percent of the home price and it assumes a qualifying ratio of 25 percent. That means the monthly principal and interest (P&I) payment cannot exceed 25 percent of the median family monthly income. Housing Opportunity Index The National Association of Home Builders (NAHB) has developed a Housing Opportunity Index, which is defined as the share of homes affordable for median household incomes for each metropolitan statistical area (MSA). The NAHB Index has certain intuitive limitations as housing affordability scores are generally more favorable in metropolitan areas that are rated as "least desirable places to live" according to Places Rated Almanac (Brookings Institution, 2002). The "median house price -income ratio" used by the National Association of Realtors and other housing analysts is a key economic indicator in assessing local market trends and vitality. During the height of the "housing bubble", the median house price -to -income ratio more than tripled in many high-priced metropolitan markets such as New York City, Boston and Los Angeles. In Miami, the median house price -to -income ratio rose from 4:1 to 7:1 during this period. 2 Housing and Transportation Affordability Index As noted above, housing affordability is generally defined as the capacity of households to consume housing services and, specifically, the relationship between household incomes and prevailing housing prices and rents. The standard HUD definition that households should spend no more than 30 percent of their income on housing costs is most frequently used by various units of government. However, a number of housing studies in recent years have shown a clear correlation between workforce housing demand and transportation costs. The critical link between housing and transportation costs has significant implications with respect to housing choice and affordability. Housing and transportation costs can severely limit a working household's choice both in terms of housing and job location. Rising gas and overall transportation costs have significant impacts on both homeowners and renters. The location of affordable rental housing is particularly relevant as proximity to job centers and access to transit is vital to a renter dominated workforce principally comprised of low- and moderate -income households. The Housing and Transportation Affordability Index (H+T Index) developed by the Center for Neighborhood Technology (CNT) demonstrates the inadequacy of traditional measures of housing cost burden. To calculate the H in the H+T Index, housing costs are derived from nationally available datasets. Median selected monthly owner costs for owners with a mortgage and median gross rent, both are averaged and weighted by the ratio of owner- to renter -occupied housing units from the tenure variable for every block group. Transportation costs, the T in the H+T Index, are modeled based on three components of transportation behavior —auto ownership, auto use, and transit use —which are combined to estimate the cost of transportation. While housing alone is traditionally considered affordable when consuming no more than 30 percent of income, the H+T Index limits the combined costs of transportation and housing consuming to no more than 45 percent of household income. Why does this matter? According to CNT, a typical household's transportation costs can range from 12 percent of household income in communities with compact development and access to transit options, to more than 32 percent in the far exurbs. 3 Methodology and Scope of Study The methodology used by the FIU Metropolitan Center in the research and preparation of the City of Miami Affordable Housing Needs Assessment was to assess current market data and conditions to determine changes in existing and future housing demand. The housing demand and supply assessment examines the existing and future housing needs of the City's resident worker population and provides several layers of affordability gap analysis based on prevailing wages, household incomes, and housing values. The study includes the following elements: • Housing Supply Analysis: This section provides a detailed analysis of the City's and District's housing inventory/supply based on housing type, tenure, development activity and housing values; • Housing Demand Analysis: This section provides a detailed analysis of the City's and District's current housing demand (need) based on an economic base analysis of the City and its impact on owner and renter households; • Existing Affordable Housing Supply/Demand Analysis: This section provides a baseline housing affordability calculation for owner and renter units by household income category at the City and District levels. The State of Affordable Housing In Miami The City of Miami has experienced a steady resurgence since the Great Recession marked by significant population gain and upswing in commercial and residential real estate development. The City's population has increased by 25.8 percent (90,943 persons) since 2007. However, the City's housing tenure has undergone a significant change during this period. Since 2007, renters have increased by 33 percent, while owners have decreased by 17 percent. Miami's homeownership rate has dipped to only 30 percent. Significantly, the City's comeback has been geographically uneven. While some districts and neighborhoods have benefited financially from recent growth and development, others have been experiencing rising rents and home prices and unprecedented gentrification that has threatened longtime residents and businesses with displacement. Upward housing price trends typically move much faster than wages and income. Historically, housing prices and rents in the City have demonstrated considerable rates of increase over short time periods. Conversely, the City would need to undergo a monumental change in its industrial and occupation structure that creates higher wages and income to significantly impact its affordability indicators (affordable housing cost and income gaps). Historically, the local economy has shown that it can shed high -wage jobs very quickly, but has shown resistance to adding new high -skill, high -paying jobs. Housing affordability problems in the City of Miami has been a longer -term trend that became evident during the previous decade. The cost -burdened share of renters in the City grew from 48.7 percent (42,551 renters) in 2000 to 64.3 percent (62,935 renters) in 2010 as rents and household incomes steadily diverged This became most evident with the onset of Housing Bubble in 2004 and the subsequent Great Recession in 2008. Adjusting for inflation, the median rent gross rent increased by 15 percent annually between 2012-2017, while the median renter income grew by less than 1 percent. 4 As the nation's most unaffordable urban housing market, solving housing affordability is one of the City's most pressing problems. Left unchecked, the rising share of housing as a percentage of household costs poses a serious threat to the viability of the City's economy. Specifically, the City's perspective needs to expand, embracing affordable housing as a key investment in its economic competitiveness. The strategic advantages of a more affordable City housing market include: • Housing affordability can be a potent tool for improving economic performance, driving employment growth, productivity, wages, business development, and retaining high -skilled, educated workers; • Housing affordability promotes inclusive economic growth where families at the bottom and middle share in expanding regional economic opportunity. In fact, it doubtful that the City can create significant upward economic mobility without the wealth and asset building effects of affordable home ownership; • Raising the income and net wealth of even a small percentage of the City's households up to the Area Median Income results in broad -based economic growth, high -wage job creation, increased tax revenue, and lower public costs for health, human services and policing. The cumulative economic impacts of greater, more widespread housing affordability would be a major boost to developing a more diversified, higher income City economy; • Housing affordability also plays a major role in developing, re -developing and diversifying neighborhoods without the negative impacts of rapid gentrification. Miami has numerous core neighborhoods suffering from the impacts of long-term, persistent poverty. Focused investment strategies to improve housing affordability would improve these communities and benefit the entire City economy Policy Direction The complexity of the "post -bubble" housing market places significant responsibilities on local governments and agencies. Affordable and accessible housing for working families and households is vital to the local economy and contributes greatly to community attachment and well-being. The provision of affordable and accessible housing for working families and households can be effectively accomplished through coordinated and integrated policies at the local level. The policy underpinnings for a more aggressive local housing delivery system include the following: • Each municipality has a "resident workforce" composed of working families and households whose mobility is integral to the economic strength and character of each community; • Elected and appointed municipal officials are in need of new and innovative solutions to their local housing needs during a "new normal" where federal and state housing funds have become increasingly scarce and insufficient; • An effective and sustainable response to worker housing needs requires policies developed and implemented at the municipal and county levels of local government; and • Local affordable housing policies and programs must be performance -driven. 5 The City of Miami Affordable Housing Master Plan The City of Miami is one of the most culturally diverse cities in the U.S. composed of vibrant neighborhoods including Allapattah, Coconut Grove, Edison, Little Havana, Model City, Overtown and Wynwood. Recognizing the need to maintain and enhance its cultural diversity, the City of Miami Affordable Housing Master Plan will help ensure the values that are central to the City and its neighborhoods — diversity, inclusivity, sustainability — are supported by a spectrum of housing choice and opportunity. Without a sufficient supply of housing affordable to lower -wage workers, it will become increasingly difficult for the City to attract and retain a diverse workforce and grow vibrant and sustainable neighborhood economies. As such, the City of Miami Affordable Housing Master Plan will provide the analytical and policy framework to advance a bold action agenda to address the City's current and future supply and demand of affordable housing. Goal Statement The goal of the City of Miami Affordable Housing Master Plan is to increase the quantity and quality of affordable owner and rental housing to all who want to live in the City of Miami by promoting the development of new units, the preservation of existing units and the enhancement of Miami's neighborhoods. Guiding Principles Guiding Principles of the City of Miami Affordable Housing Master Plan: • The Plan will provide expanded housing opportunities at a cost Miami's low- and moderate - income households can afford without compromising essential needs; • New housing development will enhance economic opportunity and community well-being, while ensuring resiliency in Miami's coastal environment; • The Plan will produce a high -quality living environment and promote the preservation of stable residential neighborhoods; • The Plan will develop a variety of affordable housing types and designs to give Miami owners and renters a wide spectrum of housing choice and opportunity; • The Plan will integrate affordable housing development with land use and transportation The Goal Statement and Guiding Principles of the City of Miami Affordable Housing Master Plan offer a vision for the City of Miami that is inclusive, equitable and provides economic opportunity for current and future residents of the City. Equitable development is a positive development strategy that ensures everyone participates in and benefits from the region's economic transformation —especially low-income residents, communities of color, immigrants, and others at risk of being left behind. It requires an intentional focus on eliminating racial inequities and barriers, and making accountable and catalytic investments to assure that lower -wealth residents live in healthy, safe, opportunity -rich neighborhoods that reflect their culture connect (and are not displaced from them) to economic and housing opportunities. 6 Housing Supply Analysis Housing affordability is a balance between local incomes and local real estate prices. The dynamics, and market conditions of affordability are driven by 1) demand factors including population growth, household lifestyle preferences, local and non -regional housing purchasers and renters, 2) the supply, condition and development of housing unit stock over time, and 3) economic dynamics including job creation, occupational structure, and household earnings. A detailed review of Miami's housing market and economic characteristics reveals that it has, and continues to undergo significant change since 2000, and in particular, since the recession. The City's population has increased by 25.8 percent since 2007 following a surge in commercial and residential development. During this growth period, the City's housing market has undergone significant changes marked by escalating housing prices, dramatic shifts in tenure and heightened levels of cost -burdened renters and owners. The housing supply analysis section of the housing needs assessment quantifies the extent to which the housing market is impacting the City of Miami's affordable housing supply. In order to develop an understanding of the City's overall housing supply conditions, it is important to assess the existing housing inventory, including changes in occupancy status, vacancies, development trends, and sales and rental activity. Housing Inventory From 2013 to 2017 the City's housing inventory grew by 8,680 units, and average of 1,736 units per year. During the last 5 years, the City's housing stock has continued to undergo three important shifts: • A shift from single family to multi -family housing: The number of single-family units in the City declined by 876 units, while multi -family units grew by over 8,900 units. The largest increase has been in units in buildings of 50 units or more; • Greatest growth in small units: Units of 2 bedrooms or less continue to make up over 76 percent of the City's housing stock, and zero -bedroom units (studio units) provided the bulk of the growth in the City's housing inventory (3,113 units); and • A City of renters: Miami has a particularly high proportion of rental housing. 70 percent of its occupied housing is rental housing, continuing its upward trend over the last 5 years — up from 67 percent in 2013. The City added over 13,000 rental units from 2013 to 2017. The city's high rate of rental housing in comparison to its cohort cities is most likely a function of the City rising housing prices, low relative incomes, shifts in demand (preference), and tighter debt financing. 7 Housing Units by Type, 2013-2017 60,000 Single Family Detached ■ 2013 ■ 2017 Total Units Added: 8,680 1 Attached • I • I 2 Units 3 or 4 Units 5to 9 Units 1 0 to 1 9 Units 20 to 49 Units 50 or more Mobile home Boat, RV, van, Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates Units etc. Housing Units by Bedrooms, 2013-2017 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 No bedroom ■ 2013 ■ 2017 • 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates 8 5 or more bedrooms Percent Renter Households, 2017 0°%o 5% 10°%o 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% Miami Orlando Boston San Francisco Oakland Buffalo Cleveland Atlanta Honolulu Austin Seattle Minneapolis Baltimore Memphis Pittsburgh Detroit Tampa Denver Las Vegas Raleigh Charlotte Portland Kansas City Jacksonville Albuquerque Source: 2073-2077 American Community Survey 5-Year Estimates — Benc Medi mark n 9 Owner -Occupied Units (%) Flagami es Flagl r Allapa ah ittle Havana oral-W North Cocodut,Grove Sou h Coconut Grove Upper Eastside Little Haiti Renter -Occupied Units (%) n1111111:• 1 1 OX.,C `,1 ittOitte Islands Islands Islands Tightening of Vacancy Rates and Changing Vacancy Structure Since 2013 ]Miami has experienced a continued tightening of its available housing supply. Despite an over 9 percent increase in supply, the absolute number of vacant units declined from 2013 to 2017. Every category of vacancy recorded by the US Census experienced supply declines of 14 to 47 percent. Units intended for sale or rent decreased from 9 percent to 6 percent of total inventory. Units kept off the market for personal use (rented, not occupied, sold not occupied, and seasonal units) represent the single largest share of vacancies, at 10 percent of total inventory. At least 15,591 units are currently kept off the market for local renters and buyers. Vacancy Statu Miami 2013 Total Housing Units Total Vacant Housing Units For rent Rented, not occupied For sale only Sold, not occupied For seasonal, recreational, or occasional use For migrant workers Other vacant 150,974 36,964 10,337 2,576 2,919 1,246 12,440 27 7,419 2017 % 2013-2017 164,734 24% 31,884 19% 7% 8,440 5% 2% 1,377 1% 2% 1,666 1% 1% 1,019 1% 8% 13,195 8% 0% 16 0% 5% 6,171 4% Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates Competing in a Global Residential Real Estate Market 9% -14% -18% -47% -43% -18% 6% -41% -17% Miami's reputation as a destination for international investor -buyers has played a large part in driving demand for owner -occupied home sales, particularly for condominiums. Demand from buyers outside the region and the demand for vacation and investor units is a mixed blessing. First, this demand drives one of the world's largest and most sophisticated real estate development industries, employing thousands and bringing Billions into the local economy. Second, however, local resident home buyers increasingly compete in an international real estate market against better funded buyers. Third, Miami's overwhelming international demand drives housing prices that are out of touch with local incomes. Lastly, Additionally, as noted, the volume of international and out-of-town sales are most likely driving the growing inventory of units being taken off the market completely. A 2013 study by Miami -Dade County's Regulatory & Economic Resources Department noted "a widening gap between the volume of sales to domestic first-time homebuyers and sales to mainly foreign investors," and that domestic home buyers are at a competitive disadvantage with international buyers, particularly because cash buyers can offer much greater speed to closing and in many cases are more willing to sweeten an offer by waiving a pre -closing inspection. [Miami -Dade County Regulatory & Economic Resources Department] 82 percent of foreign buyers purchase homes in Miami -Dade in all -cash transactions, by mid-2013 cash sales of condos peaked at 78 percent (more than double the national average), and has declined to near 65 percent of all condominium sales. 11 Analysis of the Miami -Dade County Assessor's files indicates that a significant portion of the County and City's residential housing stock is owned as investor units, rather than as primary domiciles. The County's Homestead property tax exception which reduces the assessed value of a residential property, is only available to homeowners who live in their homes as their primary residence, and serves as the best single measure of the proportion of homes owned as investor units. Our analysis, shown below, indicates that 47 percent of all single family and condominium units are owned as non - primary units across the County as a whole, and that same number is over 62 percent in the City of Miami. Homestead vs. Non -Homestead Exempted Properties Miami -Dade County Single Family Properties Homestead Exempted Non -Homestead Exempted Condominium Properties Homestead Exempted Non -Homestead Exempted 316,894 237,333 75% 79,561 25% 310,877 98,174 32% 212,703 68% TOTAL 627,771 Homestead Exempted 335,507 53% Non -Homestead Exempted 292,264 47% City of Miami Single Family Properties Homestead Exempted Non -Homestead Exempted Condominium Properties Homestead Exempted Non -Homestead Exempted 33,657 22,568 67% 11,089 33% 63,775 14,413 23% 49,362 77% TOTAL 97,432 Homestead Exempted 36,981 38% Non -Homestead Exempted 60,451 62% Source: Miami -Dade County Assessor Database, March 2019 Analysis by FIU Metroppolitan Center 12 Construction Costs Construction costs in Miami have increased over 7 percent since 2010. However, Miami, construction costs across most building types in Miami and South Florida have historically been lower than the rest of the US. The current gap between overall construction prices in Miami and the US average, at 23 percent, is larger than it has been in 20 years. Consistently lower construction costs in Miami should be an advantage for developing affordable housing. However, this advantage may be offset by higher land costs in Miami, pushing total project costs may be closer to, or above the US average. Final development costs for affordable housing in Miami will be very sensitive to variable land costs, based on location and demand. RS Means Construction Cost Index ■ Miami -Dade 200 ■ us 150 1001111111111111111111 50 0 �00 00\ O01, �O3 OAR o�5 �0( 001 �0'6 �0° �10 011 �1 L �1b �1R �15 �1(0 �11 �1`6 ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti ti Source: RS Means Inc. 13 Rapidly Rising Home Values, Sale Prices, and Rents Miami's December 2018 median home sale price (all unit types), at $350,000, is near the middle of the benchmark cohort cities. Miami condominium sale prices since 2013 have actually run below prices across the rest of the US and Miami -Dade County. However, the City's median condominium sale prince has increased 59 percent since 2013, more than double the rate of increase for the County. Unlike condo prices, median single-family home sale prices in the City are higher than the US and the County, and from 2013 to 2019 have also increased considerably faster. Miami's median single- family home price has increased over 83 percent since 2013, compared to 79 and 50 percent for the County and the US over the same period. Miami apartment rents have followed a different pattern. Miami multi -family rents have consistently been higher than the County and the US, by as much as 20 and 44 percent, respectively. However, due to declining median rents from 2016 through 2018, the City's overall rate of increase has been less than the County and Nation. Rents for new construction consistently run considerably higher than for existing units. fvedian Home Sale Price, December 2018 San Francisco Oakland Seattl e Boston Honolulu Portland Denver Austin Miami Atlanta Las Vegas Raleigh Minneapolis Orlando Charlotte Tampa Kansas City Jacksonville Pittsburgh Baltimore Buffalo Cleveland Memphis Detroit $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 — • Data provided by Redfin, a national real estate brokerage, 2019 14 Benchmark Median Vedian Condo Sale Price, 2013-2019 Price Increase US: 55% Miami-Dade:26% Miami : 59% $280,000 — US — Miami-Dade County — Miami Sao,000 — 2/1/13 2/1/14 2/1/15 2/1/16 2/1/17 2/1/18 2/1/15 Data provided by Redfin, a national real estate brokerage, 2019 lvedian Single Family Sale Price, 2013-2019 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 —Miami-Dade —Miami US Price I ncrease US: 50% N is -1 i-Dade : 79% MLmi:83% Feb-13 Feb-14 Feb-15 Feb-16 Feb-17 Feb-18 Feb-19 Data provided by Redfin, a national real estate brokerage, 2079 15 Median Multifamily Rent, 2013-2019 $2.200 $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 2013-01 2014-01 2015-01 Data provided by Zillow. com, 2019 An Aging Housing Stock 2016-01 2017-01 — US — Miami-Dade —Miami 2018-01 2019-01 Miami has a significantly aging housing stock. 62 percent of the City's housing units were built before 1980. The bulk of the City's oldest housing units are single-family homes. 16 Housing Units by Year Built Built Before 1980: 20% Miami - 62% Miami -Dade - 56% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 1939 or 1940 to 1950 to 1960 to 1970 to 1980 to 1990 to 2000 to 2010 to 2014 or earlier 1949 1959 1969 1979 1989 1999 2009 2013 later Source: 2013-2017 American Community Survey 5-Year Estimates ■ Miami • Miami -Dade County Rapid Decline in the Supply of Mid and Low -Price Housing Units As housing prices and rents have increased in Miami, the supply of affordable existing and new housing units has dropped precipitously. In particular, both owner and renter units at the middle and bottom of the price scale has been hollowed out over the last 5 years. Nationally, the affordable home price for a household at the median income is $139,438. In Miami, the affordable purchase price for a household earning the City median income $109,465. For a household earning 81 to 120 percent of the City's median income, a rent between $807 and $1,209 per month is affordable under HUD guidelines. However, the supply of both owner and renter units affordable to households earning as much as 200 percent of the City's median income has declined rapidly in both absolute numbers and as a percentage of total housing supply. In particular, the number of owner units priced under $250,000 and rental units priced at $800 per month have been decimated since 2013. Over the same period the numbers and relative portion of units priced over $250,000 and $900 per month has increased rapidly. Owner Occupied Unit Supply Change by Value Miami -Dade County, 2013-2017 $1,000,000 or more $750,000 to $99 9,999 $500,000 to $749,999 $400,000 to $49 9,999 $300,000 to $399,999 $250,000 to $29 9,999 $200,000 to $249,999 $175,000to $199,999 $150,000 to $174,999 $125,000 to $149,999 $100,000 to $124,999 $90,000to $99,999 $80,000 to $89,999 $70,000 to $79, 99 9 $60,000to $69,999 $50,000to $59,999 $40,000 to $49, 99 9 $35,000to $39,999 $30,000to $34,999 $25,000to $29,999 $20,000 to $24,999 $15,000 to $19, 99 9 $10,000to $14,999 Less than $10,000 • • (12,000) (10.000) (8000) (6000) (4000) (2,000) 2,000 4,000 6,000 8,000 10,000 12,000 14,000 Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates 17 Owner Occupied Unit Supply Change by Value City of Maimi, 2013-2017 $750,000 to $999,999 $400,000 to $499,999 $250,000 to $299,999 $175,000 to $199,999 $125,000 to $149,999 $90,000 to $99,999 $70,000 to $79,999 $50,000 to $59,999 $35,000 to $39,999 $25,000 to $29,999 $15,000 to $19,999 Less than $10,000 • • Net Units Lost $15,000 - $249,000: 7,439 -1,600 -1,200 -800 -400 0 400 800 1,200 1,600 2,000 Rental Unit Supply Change by Unit Value City of Miami 2013-2017 $2,000 or more $1,500to $1,999 $1,250 to $1,499 $1,000to $1,249 $900 to $999 $800 to $899 ■ $750 to $799 $700 to $749 $650 to $699 $600 to $649 ■ $550 to $599 $500 to $549 $450 to $499 ■ $400 to $449 • $350 to $399 $300 to $349 $250 to $299 $200 to $249 $150 to $199 $100 to $149 Less than $100 Net Units Lost Less Than $1,000 per Month: 3,405 (1,100)(600) (100) 400 900 1,400 1,900 2,400 2,900 3,400 3,900 4,400 4,900 5,400 Source: 2009-2013, 207 3-207 7 American Community Survey 5-Year Estimates 18 Land and Redevelopment Capacity Increasing the City's supply of affordable housing will require a combination of 1) new ground up development, 2) preservation of existing affordable units, and 3) redevelopment and expansion of the City's existing public housing. The availability of land and units for redevelopment will be a crucial factor in building the City's affordable housing inventory. Vacant Property An analysis of vacant property using the Miami -Dade County Assessor's property database indicates that vacant properties available and suitable for development for new housing are in short supply within the City. After removing properties not zoned or suitable for residential development and utility easements, the Center's analysis indicates that out of a total of 167 Million square feet of vacant property in the City, only 29.3 Million square feet can potentially be redeveloped for residential uses. Of this inventory, only 3.5 Million square feet of vacant property zoned and suitable for residential development are owned by public entities and institutions. If this total inventory is actually developable for residential use, at the maximum zoning density allowed under Miami 21, it could support the development of up to 70,000 units on privately owned properties, and 10,000 units on publicly owned properties. However, this estimate may be significantly optimistic, as the bulk of vacant properties within this inventory are characterized by 1) a significant inventory of vacant land that is already committed to existing commercial development and/or market rate residential development; 2) parcels, both large and small which are scattered and cannot be assembled into larger parcels, and 3) properties that although either zoned for residential development or currently have older housing units on them, are no longer suitable housing locations. Vacant Property Summary Vacant Parcels Total SQ.FT. City Total (exluding Industrial) Vacant Land for Multi Family Development Total Parcels in T-5 and T-6 (>5,000 sq.ft.) Total Public Parcels in T-5 and T-6 (> 5,000 sq.ft.) Vacant Land for Small Building Apartments Total Parcels in T-4 (5,000>20,000 sq.ft) Total Public Parcels in T-4 (5,000>20,000 sq.ft) Vacant Land for Single and Two -Family Development Total Parcels in T-3 (5,000> sq.ft) Total Public Parcels in T-3 (5,000> sq.ft) 5, 466 167, 042, 357 1,447 19,131,191 154 2,973,919 279 2, 099, 723 30 225, 539 927 8,095,597 42 399,376 Total for Potential Residential Development 2,653 29,326,511 Total for Potential Residential Development (Public Land) 226 3,598,834 Vacant Parcels - High Density Multifamily Development Q Qualified Opportunity Zones Extremely Cost -burdened Renters Q 0% - 30% Q 31% - 50% Q 51% - 100% Land Use Q Vacant Residential 0 Vacant Commercial Q Vacant Insitutional: Parking Lot Q Vacant Insitutional: Land Vacant Govt.: Municipal ® Vacant Govt.: Dade County ® Vacant Govt.: School Board Q Vacant Govt.: Parking Lot Vacant Govt.: Land Vacant Govt.: Federal Q Vacant Govt.: State 'Flagami West Flagler Model City Allapattah • •.Little Havana .r. 3 4 Coral Way North,Coconut Grove r• eeti Downtown •• e South Coconut Grove I l Islands Islands Vacant Parcels - Low Density Multifamily Development 0 Qualified Opportunity Zones Extremely Cost -burdened Renters Q 0% - 30% Q 31% - 500/0 - 51% - 1000/0 Land Use Q Vacant Residential Vacant Commercial Q Vacant Insitutional: Parking Lot Q Vacant Insitutional: Land Vacant Govt.: Municipal Vacant Govt.: Dade County Vacant Govt.: School Board Q Vacant Govt.: Parking Lot Q Vacant Govt.: Land C. Vacant Govt.: Federal Q Vacant Govt.: State Flagami West Flagler Upper Eastside Little Haiti i Overtown Little Havana.,, . 3 4 ° Coral Way North Coconut Grove Sou h Coconut Grove Islands Islands Vacant Parcels - Single & Two-family Development 0 Qualified Opportunity Zones Extremely Cost -burdened Renters Q 0% -30% Q 31% - 500/0 Q 51% - 100% Land Use Q Vacant Residential IM Vacant Commercial Q Vacant Insitutional: Parking Lot Q Vacant Insitutional: Land Vacant Govt.: Municipal Vacant Govt.: Dade County Q Vacant Govt.: School Board Q Vacant Govt.: Parking Lot Vacant Govt.: Land Vacant Govt.: Federal Q Vacant Govt.: State Upper Eastside Little Haiti Mbdel.City Allapattah . Flagami West Flagler . �.Y • Wyn woad Overtown Little Havana 4 Coral Way - North CoconutGrove • Sou kh @oconutlGrove 3 Downtown Islands 2 Islands Economically Underperforming Non -Vacant Properties Targeting existing housing for redevelopment and/or conversion to affordable housing can be the fastest and most cost-efficient means of building an affordable housing inventory. Economically underperforming properties are undervalued relative to the rest of the market, usually due to disrepair, foreclosure, extended vacancy, or a homeowner falling behind on maintenance. Economically underperforming residential properties are those whose per -square -foot value is less than 1/5 the median value for all other properties in its land -use class. Based on an analysis of the County Assessor's database, 9,861 non -vacant properties out of the City's over 155,000 total residential properties are economically underperforming (9 percent of all residential properties). This inventory represents over 52 Million square feet of land area, over 27.5 Million square feet of building, and over 23,000 living units. Economically Underperforming Non -Vacant Property Summary Land Use Total Properties Median Under Value Per performing Land Area (SF) SF Properties Building Area Existing (SF) Living Units 0101 - RESIDENTIAL -SINGLE FAMILY:1 UNIT 0102 - RESIDENTIAL -SINGLE FAMILY:ADDITIONAL LIVING QUARTERS 0104 - RESIDENTIAL -SINGLE FAMILY: RESIDENTIAL- TOTALVALUE 0105- RESIDENTIAL -SINGLE FAMILY: CLUSTER HOME 0303 - MULTIFAM ILY 10 UNITS PLUS : MULTIFAM ILY 3 OR MORE UNITS 0317- MULTIFAM ILY 10 UNITS PLUS:COMMERCIAL-TOTALVALUE 0407- RESIDENTIAL -TOTAL VALUE :CONDOMINIUM - RESIDENTIAL 0410 - RESIDENTIAL- TOTALVALUE :TOWNHOUSE 0423 - RESIDENTIAL -TOTAL VALUE :CONDOMINIUM -TIMESHARING 0508 - COOPERATIVE - RESIDENTIAL: COOPERATIVE - RESIDENTIAL 0802- MULTIFAMILY2-9 UNITS:2 LIVING UNITS 0803 - MULTIFAM ILY 2-9 UNITS : MULTIFAMILY 3 OR MORE UNITS 8601- COUNTY:RESIDENTIAL-SINGLEFAMILY Source: Miami -Dade County Assessor Database, March 2019 Analysis by FIU Metroppolitan Center 33,560 $1 55.72. 1,538 43,1 51,141 2,486,421 3,470 39 $244.14 6 48,271 13,997 11 25 $330.66 - - 76 $196.52 10 14,829 16,108 10 1,269 $122.99 128 5,278,559 15,544,1 66 11,288 1 $137.24 - - - - 62,965 $260.23 7,442 - 7,912,672 6,704 420 $224.34 94 187,663 115,873 94 229 $371.53 1 - 12,999 1 580 $33.24 30 - - 30 12,017 $128.52 484 2,658,004 980,077 964 4,052 $128.83 127 758,229 428,661 599 44 $1 62.39 1 5,300 1,074 1 115,277 9,861 52,101,996 27,512,048 23,172 23 Major Planned Public Housing Projects Miami -Dade County Rental Assistance Demonstration (RAD) Program Miami -Dade County's Public Housing and Community Development (PHCD) Division oversees approximately 9,000 public housing units, of which over 6,800, in 72 different developments, are located within the City. This inventory is a significant chunk of the City's affordable housing, and may be increased under the US Department of Housing and Urban Development's (HUD) Rental Assistance Demonstration Program (RAD) program. Public housing across the US has been faced with increasing costs for rehabilitation, maintenance and development, and at the same time, shrinking Federal and State funding to maintain, develop, and operate traditional public housing projects. The RAD program allows local Public Housing Authorities (PHA) to shift the ownership and operation of Public Housing developments to third- party owners and operators. PHCD plans to convert 6,426 units of County Public housing to third -party ownership and operation as quickly as it can. The PHCD plans to sell or transfer housing developments to for -profit or non- profit third -party owners. The new owners then finance improvements and maintain the housing for families in need. Critically, in order for new owners to make a profit, typically new ownership has the option of increasing the density of the existing development, adding both more below -market and market -rate units to the community. The RAD program is designed to re -structure old public housing into mixed -use, mixed -income communities. The RAD Program could affect the entire stock of public housing in the City, converting them to mixed -income, mixed -use neighborhoods. 14 of the County's planned projects are in Miami. Given the density bonuses in the City's zoning code available at these locations, RAD conversion could result in the addition of 5,433 new mixed -income affordable housing units. The PHCD communities planned for RAD redevelopment are: • Claude Pepper • Culmer Gardens • Edison Plaza • Gwen Cherry 23 • Haley Sofge Phase 1 & 2 • Helen Sawyer • Joe Moretti Phase 2B • Little Havana Homes • Rainbow Village • Robert King High • Victory Homes 24 Demand Analysis Population Growth and Household Formation Miami continues to be a popular destination for new residents from the US and abroad. Miami's 9 percent population growth from 2013 to 2017 was nearly 2.5 times the national average. The City's population growth ranked sixth among its benchmark cohort cities. If growth continues at its 5-year annual average (2.11 percent), the City's population will grow to 512,700. Population Growth, 2013-2017 -5°%° -4°%° -3°%° -2°%° -1 °%° 0°%° 1% 2% 3% 4% 5% 6% 7% 8% 9% 10°%° Seattle Orlando Austin Denver Charlotte Miami Raleigh Atlanta Tampa Boston Portland Minneapolis San Francisco Oakland Las Vegas Jacksonville Kansas City Honolulu Albuquerque Mem phis Baltimore Pittsburgh Buffalo Cleveland Detroit Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates 25 Household Formation Miami is currently almost evenly split between family and non -family households, at 55 and 45 percent, respectively. Among the benchmark cities, Miami still has a relatively high proportion of family households. However, since 2013 the rate of growth of non -family households has doubled family households. Percent Family Households, 2017 0% Las Vegas Jacksonville Charlotte Honolulu Albuquerque Memphis Raleigh Oakland Detroit Miami Tampa Kansas City Orlando Austin Portland Baltimore Buffalo Cleveland Denver Boston San Francisco Seattle Minneapolis Pittsburgh Atlanta 10% 20% 30% Source: 2009-2013, 2073-2077 American Community Survey 5-Year Estimates 40% 50% 60% 70% Miami Growth Rates: Non -Family Households: 12% Family Households: 6% — Median Miami has a relatively large average household size compared to its competitors. Yet the City's average household size has been shrinking since 2013. 1-person households are the largest and fastest growing category of households in Miami. 1-and-2-person households have grown from 66 to 68 percent of all households. 26 Average Household Size, 2017 Las Vegas Miami Honolulu Jacksonville Detroit Oakland Charlotte Memphis Albuquerque Baltimore Austin Orlando Raleigh Tampa Boston San Francisco Portland Kansas City Denver Minneapolis Buffalo Atlanta Cleveland Seattle Pittsburgh 0 0.5 1.5 2 2.5 3 3.5 Source: 2009-2073, 2073-2077 American Community Survey 5-Year Estimates — Median Household Size Distribution City of Miami 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 1 person 2 person 1 ■ 2013 ■ 2017 1 1 1 3 person 4 person or more Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates 27 Employment Base Miami's economy is a balance between high -wage, high -skilled industries, and its tourism, visitation, and hospitality sectors. 25 sectors accounting for 56 percent of all jobs in the City: Leading Industries NAICS Industry 2018 Jobs Current Wages, Salaries, & Proprietor Earnings 9036 Education and Hospitals (Local Government) 7225 Restaurants and Other Eating Places 6221 General Medical and Surgical Hospitals 4811 Scheduled Air Transportation 9026 Education and Hospitals (State Government) 5616 Investigation and Security Services 5411 Legal Services 9039 Local Government, Excluding Education and Hospitals 4831 Deep Sea, Coastal, and Great Lakes Water Transportation 6211 Offices of Physicians 7211 Traveler Accommodation 5313 Activities Related to Real Estate 6113 Colleges, Universities, and Professional Schools 4451 Grocery Stores 7223 Special Food Services 5416 Management, Scientific, and Technical Consulting Services 6214 Outpatient Care Centers 5613 Employment Services 5413 Architectural, Engineering, and Related Services 9011 Federal Government, Civilian 5242 Agencies, Brokerages, and Other Insurance Related Activities 5415 Computer Systems Design and Related Services 5221 Depository Credit Intermediation 6216 Home Health Care Services 6111 Elementary and Secondary Schools Source: EMSI Inc. 41,203 19,882 16,323 11,383 10,386 8,341 8,085 7,316 6,347 5,929 5,427 5,405 5,019 4,822 4,575 4,318 4,179 4,008 3,663 3,587 3,535 3,485 3,415 3,375 2 72 197,380 $50,135 $24,859 $66,756 $88,824 $38,147 $26,488 $102,049 $70,929 $101,122 $73,809 $37,528 $50,575 $56,296 $23,913 $24,803 $69,642 $52,588 $35,554 $71,638 $87,200 $68,596 $87,902 $90,852 $33,670 39 621 28 Miami's Competitive Advantage Job growth is typically led by industries that have a local competitive advantage, compared to companies in the same industry elsewhere in the US. Industry Location Quotient is a measure of the relative proportion of jobs in an industry compared to the total number of jobs. An industry location quotient more than 1 means that an area has a greater percentage of jobs in that industry than the rest of the US. A location quotient of 1.5 or more indicates that an industry has a significant local competitive advantage over other locations. Miami's most competitive industries are shown in the table below. Miami's Most Competitve Industries Industry 2018 Location 2018 Jobs Quotient 4831 Deep Sea, Coastal, and Great Lakes Water Transportation 4883 Support Activities for Water Transportation 4811 Scheduled Air Transportation 5152 Cable and Other Subscription Programming 5615 Travel Arrangement and Reservation Services 4872 Scenic and Sightseeing Transportation, Water 4812 Nonscheduled Air Transportation 4853 Taxi and Limousine Service 5616 Investigation and Security Services 8132 Grantmaking and Giving Services 4879 Scenic and Sightseeing Transportation, Other 5122 Sound Recording Industries 7112 Spectator Sports 6222 Psychiatric and Substance Abuse Hospitals 5321 Automotive Equipment Rental and Leasing 4512 Book Stores and News Dealers 5313 Activities Related to Real Estate 5411 Legal Services 7132 Gambling Industries 4885 Freight Transportation Arrangement 8114 Personal and Household Goods Repair and Maintenance 7113 Promoters of Performing Arts, Sports, and Similar Events 7223 Special Food Services 7121 Museums, Historical Sites, and Similar Institutions 5174 Satellite Telecommunications 4239 Miscellaneous Durable Goods Merchant Wholesalers 8112 Electronic and Precision Equipment Repair and Maintenance 4243 Apparel, Piece Goods, and Notions Merchant Wholesalers 4881 Support Activities for Air Transportation 6114 Business Schools and Computer and Management Training 9036 Education and Hospitals (Local Government) 6223 Specialty (except Psychiatric and Substance Abuse) Hospitals 8129 Other Personal Services 2379 Other Heavy and Civil Engineering Construction 5414 Specialised Design Services Percent of Total Jobs 73.45 15.97 11.47 7.49 6.06 4.43 4.19 4.16 3.97 3.76 3.51 3.47 3.07 3.07 3.07 2.98 2.91 2.77 2.71 2.70 2.68 2.56 2.54 2.50 2.37 2.34 2.33 2.29 2.25 2.23 2.20 2.18 2.12 2.08 2.04 6,347 3,291 11,383 887 3,251 181 436 2,306 8,341 1,208 26 221 1,300 816 1,459 551 5,405 8,085 756 1,469 922 922 4,575 935 46 1,628 649 788 1,094 362 41,203 1,096 2,070 581 1 289 115,878 33% Job Growth The City's economy has steadily added jobs each year since the bottom of the recession, growing jobs at an annual average rate of 2% from 2010 to 2918. Total Employment, City of Maimi 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 11111111111111111111111 O\ QQti 45 Qc)A Q05 Q00 QQ'1 Q00 QQ� QUO O11 Q�`L Q�3 QUA �<0 �0 �I �0 �� Q0,0 O�1 Q0,`L 00,3 QUA ti 535353ti 535353535353535 ti ti ti ti ti ti ti ti ti ti ti Source. EMS/Inc. The City will continue to add jobs through 2024, but at less than half the annual average than the past 5 years (1 percent per year). The 25 industries providing 69% of all new jobs in the City through 2024 include: Leading Growth Industries NAICS Industry 2018 2024 Job Jobs Jobs Growth Current Wages, Salaries, & Proprietor Earnings 9026 Education and Hospitals (State Government) 7225 Restaurants and Other Eating Places 6221 General Medical and Surgical Hospitals 5313 Activities Related to Real Estate 6113 Colleges, Universities, and Professional Schools 2371 Utility System Construction 4811 Scheduled Air Transportation 6216 Home Health Care Services 6211 Offices of Physicians 5416 Management, Scientific, and Technical Consulting Services 6214 Outpatient Care Centers 6111 Elementary and Secondary Schools 4853 Taxi and Limousine Service 7223 Special Food Services 5415 Computer Systems Design and Related Services 4541 Electronic Shopping and Mail -Order Houses 2361 Residential Building Construction 4883 Sup portActivities for Water Transportation 5413 Architectural, Engineering, and Related Services 8129 Other Personal Services 5411 Legal Services 4411 Automobile Dealers 5617 Services to Buildings and Dwellings 4244 Grocery and Related Prod uct Merchant Wholesalers 8132 Grantmaking and Giving Services 30 10,386 15,019 4,633 19,882 21,655 1,773 16,323 17,665 1,342 5,405 6,728 1,323 5,019 5,997 978 1,457 2,389 932 11,383 12,243 860 3,375 4,158 783 5,929 6,692 763 4,318 5,045 727 4,179 4,840 661 3,372 3,986 614 2,306 2,865 559 4,575 5,120 545 3,485 3,978 493 1,091 1,551 460 2,676 3,056 380 3,291 3,665 374 3,663 4,025 362 2,070 2,416 346 8,085 8,421 336 2,795 3,103 308 2,989 3,285 296 2,931 3,226 295 1,208 1,486 278 $38,147 $24,859 $66,756 $ 50, 57 5 $ 56,296 $63,464 $88,824 $33,670 $73,809 $69,642 $ 52, 588 $39,621 $21,538 $24,803 $87,902 $33,935 $44,695 $40,243 $71,638 $22,610 $102,049 $ 58,294 $20,834 $53,738 $51,885 City Resident Occupations While jobs created in the City are balanced between high and low skill and income industries, City residents largely work in lower income, lower -skilled occupations. The leading occupations for City workers , representing 37 percent of all resident workers are: Miami's Top Resident Occupations SOC Description 2018 Resident Workers Median Annual Earnings 41-2031 Retail Salespersons 43-9061 Office Clerks, General 35-3031 Wafters and Waitresses 43-4051 Customer Service Representatives 41-2011 Cashiers 35-3021 Combined Food Preparation and Serving Workers, Including Fast Food 43-6014 Secretaries and Administrative Assistants, Except Legal, Medical, and Executive 37-2011 Janitors and Cleaners, Except Maids and Housekeeping Cleaners 37-2012 Maids and Housekeeping Cleaners 29-1141 Registered Nurses 53-7062 Laborers and Freight, Stock, and Material Movers, Hand 33-9032 Security Guards 43-5081 Stock Clerks and Order Fillers 35-2014 Cooks, Restaurant 53-3032 Heavy and Tractor -Trailer Truck Drivers 41-4012 Sales Representatives, Wholesale and Manufacturing, Except Technical and Scientific Products 23-1011 Lawyers 43-3031 Bookkeeping, Accounting, and Auditing Clerks 13-2011 Accountants and Auditors 11-1021 General and Operations Managers 43-1011 First -Line Supervisors of Office and Administrative Support Workers 49-9071 Maintenance and Repair Workers, General 47-2061 Construction Laborers Percent of All Resident Workers 7,787 5,115 5,040 5,001 4,747 4,545 4,366 4,108 4,102 3,948 3,917 3,613 3,281 2,910 2,786 2,754 2,542 2,484 2,480 2,437 2,423 2,393 ^ 368 37% $21,326.46 $28,196.06 $21,787.75 $30,248.85 $19,409.84 $19,202.09 $34,093.14 $21,109.92 $22,225.66 $64,261.42 $27,773.96 $22,150.07 $23,170.68 $27,152.88 $36,150.77 $45,748.10 $100, 908.10 $37,416.99 $61,469.82 $102,150.96 $51,901.94 $32,720.90 $25 961 96 Miami's Largest Forecasted Occupation Gains SOC Description 2018 2018 2024 Net Median Jobs Jobs Change Annual Earnings 25-1099 Postsecondary Teachers 29-1141 Registered Nurses 53-3041 Taxi Drivers and Chauffeurs 35-3031 Waiters and Waitresses 47-2061 Construction Laborers 53-7062 Laborers and Freight, Stock, and Material Movers, Hand 35-2014 Cooks, Restaurant 31-9092 Medical Assistants 35-3021 Combined Food Preparation and Serving Workers, Including Fast Food 49-9071 Maintenance and Repair Workers, General 53-2031 Flight Attendants 39-9021 Personal Care Aides 31-1011 Home Health Aides 37-2012 Maids and Housekeeping Cleaners 1 1-1021 General and Operations Managers 41-9022 Real Estate Sales Agents 41-2031 Retail Salespersons 1 1-9199 Managers, All Other 31-1014 Nursing Assistants 13-2011 Accountants and Auditors 53-3032 Heavy and Tractor -Trailer Truck Drivers 15-1132 Software Developers, Applications 13-1111 Management Analysts 13-1199 Business Operations Specialists, All Other 11-9141 Property, Real Estate, and Community Association Managers Source: EMS! Inc. 5,759 9,083 2,440 5,759 2,575 5,849 3,361 2,130 6,315 3,691 3,091 1,198 1,390 4,149 3,382 2,011 8,078 1,997 3,427 3,573 3,059 966 1,763 2,646 1,463 7,846 10,201 3,006 6,296 3,029 6,268 3,737 2,490 6,666 4,023 3,422 1,528 1,691 4,445 3,666 2,287 8,336 2,252 3,664 3,804 3,287 1,190 1,979 2,861 1,674 2,087 1,118 566 538 454 420 376 361 351 333 330 330 301 296 284 276 258 255 236 231 228 224 216 215 211 $67,102.78 $64,261.42 $22,178.46 $21,787.75 $25,961.96 $27,773.96 $27,152.88 $30,791.36 $19,202.09 $32,720.90 $33,654.56 $22,945.34 $23,235.40 $22,225.66 $102,150.96 $37,113.20 $21,326.46 $39,224.32 $24,234.94 $61,469.82 $36,150.77 $76,812.20 $56,778.98 $63,612.22 $40,650.42 31 Earnings The City's occupational structure results in wages for residents that are considerably lower than its benchmark counterparts cities. Adjusted for inflation, wages since 2013 have grown 11 percent since 2013. However, with annual median resident worker earnings at $24,931, Miami ranks 3rd last among the benchmark cohort. Additionally, the City creates higher paying jobs at a much slower rate than comparable cities. It's 75/50 ratio — the ratio of workers earning $75,000 or more per year versus those earning less than $50,00 per year — is near the bottom of the benchmark cohort. 72 percent of the City's resident workers earn less than $75,00 per year. 52 percent of City residents work in occupations with median annual earnings less than $350,000. 45 percent of the jobs created in the City from now through 2024 will be in occupations with a median annual income less than $35,000 per year. The percentage of City residents working in occupations earning less than $35,000 per year will remain the same. Median Full -Time Resident Worker Earnings, 2017 10,000 San Francisco Seattle Denver Atlanta Boston Honolulu Austin Oakland Raleigh Charlotte Baltimore Portland Minneapolis Kansas City Tampa Las Vegas Jacksonvi Ile Albuquerque Orlando Pittsbu rgh Memph is Buffalo Miami Cleveland Detroit 20,000 Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates 30,000 40,000 50,000 32 Change in Real Median Resident Worker Earnings, 2013-2017 -5% Seattle San Francisco Austin Denver Miami Atlanta Boston Pittsburgh Raleigh Oakland Honolulu Portland Charlotte Balti more Orlando Buffalo Detroit Minneapolis Tampa Kansas City Cleveland Las Vegas Memphis Jacksonville Albuquerque 0% 5% 10% ■ ■ Source: 2009-2073, 2073-2077 American Community Survey 5-Year Estimates —Median 15% 75/50 Ratio, 2017 -0.2 San Francisco Seattle Boston Oakland Atlanta Portland Denver Minneapolis Austin Charlotte Raleigh Tampa Baltimore Honolulu Pittsburgh Albuquerque Kansas City Las Vegas Orlando Jacksonville Buffalo Miami Memphis Cleveland Detroit 0.3 0.8 1.3 Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates Media 1.8 33 Household Incomes and Income Disparity At $33,999, Miami's median household income is only 59 percent of the US median income, and only 73 percent of Miami-Dade's median household income. Adjusted for inflation, the City's median household income has grown by just over 6 percent. Miami has one of the highest income gaps between households at the top and bottom of all cities in the US. The mean income of households in the top 5 percent of income in the City is more than 52 times the mean income of households in the lowest 20 percent of income. 53 percent of Miami's households earn less than $50,000. The City's poverty rate, hovering between 22 and 26 percent over the last decade, is also one of the highest among comparable cities in the US. 0 San Francisco Seattle Honolulu Austin Oakland Boston Portland Raleigh Denver Charlotte Minneapolis Las Vegas Atlanta Jacksonville Kansas City Albuquerque Tampa Baltimore Orlando Pittsburgh Memphis Buffalo Miami Cleveland Detroit 20,000 40,000 60,000 Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates All Dollar values are in CPI adjusted 2017 Dollars 80,000 100,000 34 Households by Income 250,000 200,000 150,000 100,000 50,000 ■ 2013 ■ 2017 $0- $25,000- $50,000- $75,000- $100,000- $200,000+ $25,000 $50,000 $75,000 $100,000 $200,000 Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates Real Median Household Income Change, 2013 - 2017 San Francisco Seattle Oakland Denver Austin Portland Boston Raleigh Baltimore Pittsburgh Miami Minneapolis Tampa Charlotte Atlanta Buffalo Kansas City Honolulu Orlando Jacksonville Cleveland Detroit Las Vegas Albuquerque Memphis -2% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 22% Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates All Dollar values are in CPI adjusted 2017 Dollars —Medi n 35 95/20 Ratio, 2017 Atlanta Boston Miami San Francisco Tampa Baltimore Pittsburgh Memphis Cleveland Detroit Minneapolis Oakland Buffalo Denver Seattle Charlotte Portland Austin Orlando Kansas City Honolulu Las Vegas Jacksonville Albuquerque Raleigh 0 5 10 15 20 25 30 35 40 45 50 55 60 65 Source: 2073-2077 American Community Survey 5-Year Estimates —Median Poverty Rate, 2017 Detroit Cleveland Buffalo Memphis Miami Baltimore Atlanta Pittsburgh Minneapolis Boston Tampa Orlando Oakland Albuquerque Kansas City Jacksonville Portland Las Vegas Austin Denver Charlotte Raleigh Seattle San Francisco Honolulu 0% 5% 10% 15% 20% 25% 30% 35% 40% Source: 2009-2073, 2073-2077 American Community Survey 5-Year Estimates All Dollar values are in CPI adjusted 2077 Dollars 36 --Median Area Median Income (AMI) West Flagler South GoconutGrove Allapat ah Wynwoo Overtown Downtown TIP Islands Islands Changes in Housing Preference In addition to economics and the tightening of credit for home mortgages, the region's shift from owner occupancy to renting has been driven by demographic and lifestyle preference shifts among older (55 years and up) and millennial (ages 17 to 35) households. Millennials and downsizing empty nesters are driving demand for different types and locations of housing. Both 55 plus and millennial households are seeking: • Rental, rather than owner housing, and smaller size units, even for single family homes; • Neighborhoods in close proximity to shopping, conveniences, recreation and entertainment; • Locations requiring less drive time to work, and in proximity (less than 1/2 mile) to mass transit, and a mix of alternative transportation modes, including bicycles and walking. Millennials are the first generation since the invention of the automobile to drive less miles than their parents, and this trend is accelerating; and • More outdoor amenities, including garden plots, walking/jogging trails, parks, outdoor pools, and local drug/convenience stores, and 68 percent of those aged 55-64 and 69 percent of those 65+ want a single -story dwelling. 38 vliami's Affordable Housing Gap Measuring the City's Affordability Gap Determining the City's need for affordable housing can be accomplished combing three methods: 1) assessing the general gap between incomes and housing prices relative to other markets, 2) the number of households spending higher percentages of their income on housing costs relative to other markets, and 3) an evaluation of the demand and supply for housing affordable to households at various income levels. Housing Price / Income Multiplier The ratio of median housed income to median home sale price is a general indicator of the scale of housing un-affordability. In Miami, the median home sale price is 9.1 times the median household income. This ratio is not only almost double the median for its benchmark competitors, and despite the fact that is median sale price is '/2 that of Oakland and Boston, and 1/3rd of San Francisco, has the fourth highest cost -to -income ratio of similar cities. Because of Miami's lower incomes and earnings, combined with its rapid rates of sale and rent price increases, the median home sale price for all unit types in Miami is unaffordable to 90% of all workers in the County, and 81 % of all Households in the City. Home Sale Price Multiplier Ratio of Median Sale Price to Median Income, 2019 San Francisco Oakland Boston Miami Seattle Honolulu Portland Denver Austin Atlanta Orlando Cleveland Las Vegas Tampa Minneapolis Detroit Raleigh Buffalo Charlotte Kansas City Jacksonville Pittsburgh Baltimore Memphis 2.00 4.00 6.00 8.00 10.00 12.00 14.00 Source: 2009-2013, 2073-2077 American Community Survey 5-Year Estimates Sales data provided by Redfin, a national real estate brokerage, 2019 Benchmark Median 39 Housing and Transportation Costs Transportation costs can be a significant additional household expense, and impacts lower -income households most. According to the Center for Neighborhood Technology's national Housing & Transportation Cost Index, average transportation cost for households in Miami is 20 percent of household income. The city's residents have lower transportation costs than the rest of the County, but this additional 20 percent or more is significant. Households in a large swath of the City at its western edges, spend an average of 36 to 54 percent of income on transportation. Access to existing and planned transit, including the County's proposed expansion of light -rail transit incorporated in the SMART plan, can be a significant component in the success of affordable housing. In addition, investment in Transit Oriented Development mixed -use projects is currently one of the highest -demanded products from institutional investors, and is generating the highest return among all real estate investment vehicles. Mass Transportation Access • Metrorail Station (1/2 mile radius) Metromover Station Bus Routes West Flagler 40 Coral Way North Coconut Grove Coconut Grove Islands Islands Strategic Miami Area Rapid Transit (SMART) Plan' TPF� 1441r4-nl-an414 Tnnn•narinnnn Homing 412nrsnMa rJ�,! C VJ1 r/)rQItW rR I,YNZ frIgNYAII �e5 Y as L a • # • M 1 k Lrrker • r.r as Dotr51 I en T ' I i ! 3 Ysr k.: EAS TEST 1 ENPALL CORRIDOR jr 1 Li LI 41.1.1111. 6 •W" 1 CrJkrday vim{{ � _ f J:r rrJaa yJ�V � ▪ f .Fforamiid �~ ry FTdutida Crty 5 r ■ L P L Y L i L I CarA+ e s i •J 6 1 rl'JIB EFC.1'1 Miami GardeRr aft. 1rGI..I .IJI. 1JIJ lYd4, 41. EACH Q[ I70Ii, 1 111 WPJELIWIt L G ND $wr.11 RV GRIMM 001LW0F6. ..tl.vrel.. I,c.rloy Nrov,'9J LIKh Carbar neaa1 WKII INFIAcr HAP. LAnrg P.Jl Pr. ek entlml UNun Confer ® X.11144JLOarbu 94.4tl.6a414lrenb err — — RlBi RIL194RA1. 11MINAI I 1 p111 XITW Ii "....r.14I 14w. 4.141.4 • FIWYaTrJpL.[¢Jr1LLd•. 44411144aJ Nsr • 3.!1,t.69r4`A1 rwv„ • he. 2"ma Sari. 'Lm!ed FeFF4slry R1' 4I Cost Burden The fundamental measuring stick of housing affordability is the percentage of income a household pays for housing costs, or housing cost burden. As developed by the US Department of Housing and Urban Development (HUD), the accepted guideline is that a household should spend 30 percent or less of its total income on all housing costs (rent, mortgage, maintenance, etc.). Households that pay more than 30 percent of their income on total housing costs are defined as Cost -Burdened, while households spending more than 50 percent of household income on housing expenses are defined as Severely Cost -Burdened. First, Miami is distinguished from the rest of the US in three ways: 1) its excessively high composition of cost -burdened households, 2) its rising composition of cost -burdened renter households, and 3) its rising portion of "severely" cost -burdened households. With 57 percent of its households cost burdened, Miami may be the most unaffordable City in the US. 94,638 Miami households are cost -burdened — 74,753 renter households, and 19,885 owner households — representing 65 percent of renters and 40 percent of all owners. The percentage of cost burdened households increases with decreasing household income. By comparison, 32 percent of all US households are cost burdened. The median measure for the study's benchmark cities is 39 percent. This means that to reach a nationally comparative level of total cost burdened households, through a variety and programs and policy, the City needs to move between 30,000 and 41,000 households out of cost burdened status. Percent Cost Burdened Households, 2017 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% Miami Oakland Boston Orlando Honolulu Detroit Baltimore Portland Memphis Tampa Cleveland Atlanta Las Vegas Austin Buffalo San Francisco Denver Seattle Minneapolis Jacksonville Albuquerque Pittsburgh Charlotte Kansas City Raleigh Source: 2009-2013, 2013-2017 American Community Survey 5-Year Estimates 42 Percent Cost Burdened Renter Households, 2017 Miami Honolulu Detroit Orlando Oakland Tampa Boston Memphis Portland Baltimore Buffalo Las Vegas Albuquerque Cleveland Jacksonville Denver Austin Atlanta Minneapolis Seattle Raleigh Pittsburgh Charlotte Kansas City San Francisco 0% 5i 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% Source: 2009-2073, 2073-2077 American Community Survey 5-Year Estimates —M than Percent Cost Burdened Owner Households, 2017 Miami Oakland Boston Honolulu Portland San Francisco Baltimore Detroit Orlando Las Vegas Memphis Cleveland Seattle Tampa Atlanta Jacksonville Denver Austin Albuquerque Minneapolis Charlotte Kansas City Buffalo Pitts burg h Raleigh 0 a 5 a 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% Source: 2009-207 3, 207 3-207 7 American Community Survey 5-Year Estimates Mkdian 43 Affordable Housing Demand -Supply Analysis City -Wide Housing affordability in Miami -Dade cuts across a wide range of households. The needs of households on different rungs of the income ladder differ considerably, and is made even more complex by changing age, household formation, family size and composition, and housing preferences. HUD's basic classification system pegs affordable housing needs to how much money a household earns relative to the Area Median Income (AMI), or median household income of the County or metropolitan region. HUD classifies households into four categories relative to AMI: • Extremely Low Income (ELI): Households with income at or below the Poverty Guideline or 30% of AMI, whichever is higher; • Very Low Income (VLI): Households with income between 31 % and 50% of AMI; • Low Income (LI): Households with income between 51 % and 80% of AMI Middle Income (MI): Households with income between 81 % and 100% of AMI; and • Moderate Income: Households with incomes from 80% to 120% of AMI. The Center completed an analysis of housing supply and demand, at each HUD defined income level. The analysis looks at the number of households at each income level, the rent and purchase price affordable to each income level, and the City's supply of housing units at those rents/prices. The Center's affordable housing supply/demand analysis indicates the City has a shortage of 69,464 affordable housing units. City -Wide Affordable Housing Demand /Supply Analysis Owner Housing Analysis HH Income Category Total Households (Demand) Number of Owner Units Surplus/Gap Home Purchase at Affordable Price Within within Levels Affordable Affordable Price Range Price Range ^1y) Low Income 31-50%Median 31%Median 50% Median 31-50%Median S20,1 63 - $32,261 25,814 $61,701 $96,783 1,729 6.7% 24,084 Moderate Income 81 -120% Median 51%Median 80% Median 51-80%Median S32,262 - $48,392 23,964 $96,786 $145,1 76 2,749 11 .4% 21,215 Number of Renter Housing —Income Renter Affordable Rent Levels Analysis Category Households II(Demand) Number of Renter Units rplus/Gap Within within Affordable ffordable Price Range rice Range (Supply) J1Extremey Lowlncome0-30%M;I___ 0%Median 30%Median 0-30%Median $0-$12,098 22,680 $0 $302 7,077 31.2% 15,603 Very Low Income 31-50%Median 31%Median 50%Median 31-50%Median — MI2,099-$20,163 7,764 $303 $504 3,698 47.6% 4,066 Low Income 51-80%Median 51%Median 80%Median 51-80%Median S20,164-$32,261 19,067 $505 8806 14,571 76.4% 4,496 Moderate Income 81-120%Median 81 %Median 20%Median 81-120%Median_ S32262-$48392 19003 $807 $1209 37720 198% 18716 45 Commission District Profiles District 1 Analysis Housing and Economic Characteristics There are 30,524 housing units in District 1, of which, 35.8 percent are in multi -family structures of 20 units or more. Single-family structures comprise 24.8 percent of units in the District. An estimated 54 percent of units (16,485 units) are in structures 50 years of age or older. The 73,575 residents of District 1 are primarily renters (76.2 percent/21,573 households) with a median household income of $22,760, compared to $28,650 for City renters, as a whole. With nearly 9 in 10 apartments unaffordable to District 1 residents, an estimated 67 percent of renters are cost -burdened and 37 percent "severely" cost -burdened. In the Allapattah neighborhood, the average rent for a two -bedroom apartment has increased by 25 percent in the last three years. Educational attainment in District 1 is the lowest in the City. Only 12.8 percent of the population age 25 years and older have a bachelor's degree or higher and 32.6 percent do not have a high school diploma. By comparison, 26.4 of the City's population age 25 years and over have a bachelor's degree or higher and 24.4 percent are without a high school diploma. The poverty rate in District 1 for families with children is 38 percent, compared to 31.8 percent for the City of Miami, as a whole. The labor force participation rate of 56.8 percent is the lowest among all City Districts. Most workers are employed in low -wage service sector occupations with average annual earnings of $21,600 to $32,400. 4,500 _`1TAL LRITTS A: .EEOEO TO MEET THE OEMA247 DE LOW & MODERATE &IOOMAE RENTERS NEARLY 9in10 RENTAL LrOTS ARE W FORlETDLOW re R MODERATE acme RENTERS NEARLY 8in10 t.i. HOMES ARE EINAFFORO/H-E TO LON R MODERATE INCOME CAVNERs NEARLY 41200 NOFIES ARE NEEDED TD MEET THE DEMAND OF LOW & MODERATE T3 M€OWNERS 7 in 10**** RENTERS II DIsTRNCT t ARE COST•BURDETNED itoNtERS c1q% AFFORDABLE HOUSING CHALLENGES 0WNER5 f26°1° 37% 11 LI;-t iSPEND MORE THAN $WTL THEIR INCOME ON MUSING 41} 23°Io OF OVI1 TICS SP®@ MORE THAN 3911THEIR INCOME ON HOUSING AA! A 5 in 10 ***it* HOME OWNERS IN DISTRICT L ARE COST•EURDENED Extremely Cost -Burdened Renters 6,0 aK. Liemorwphics TOTAL NUMBER OF RESIDENTS: 85,146 HEWN POVERTY LEVEL: CHILDREN: WORKFORCE. SENIORS 40% 26% 383/ A TYPICAL RESIDENT IS EMPLOYED IN 9ERVIC . SALE a OFFICE INDUSTRIES WITH AVERAGE ANNUAL EARNINGS RJINGING FROM $21,600 • $32,400 s�Rv Eliq+rr.r+.urdfurg Mrd.a+r Ate 14.e.tr. t♦Imi.p3.1 Nap ■+—r �u 47 Existing Housing Demand and Supply The majority (60.8 percent/13,113 households) of District 1 renters fall within the "Extremely -Low" to "Moderate" household income categories. The "Existing Housing Demand and Supply Analysis" below shows a significant supply gap of 7,827 affordable units for renters in the four household income categories. District 1: Existing Renter Housing Demand and Supply Analysis HH Incom Category " • e Renter Households (Demand) fordable Rent Levels 30% Median Number of Renter Units Within Affordable Price •(Supply) 0-30% Median Surplus/Gap within Affordable Price Range Extremely Low Income 0-30% Median 0% Median $0 - $6,828 2,737 $0 $171 479 2,258 Very Low Income 31-50% Median $6829 - $11,380 3,192 31% Median $171 50% Median $285 31-50% Median 2,184 1,008 Low Income Renters 51-80% Median $11,380 - $18,208 3,654 51% Median $285 80% Median $455 51-80% Median 886 2,768 Moderate Income Renters 81-120% Median $18,209 - $27,312 3,530 81% Median $455 120% Median $683 81-120% Median 1,736 1,793 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. An Existing Owner Housing Demand and Supply Analysis for District 1 shows a supply gap of 543 units in the "Low" household income category and a small surplus of 31 units in the "moderate" household income category. However, when combined with potential buyers in the "Moderate" renter household category, there exists a gap of 3,650 units affordable owner units in District 1. District 1: Existing Owner Housing Demand and Supply Analysis H Income • • r Total ouseholds (Demand) ome Purchase • ' at Affordabl- 80% Median mber of Owner 'Surplus/Gap-m Units Within Affordable Price Ran • e (Su • • ) 51-80% Median within Affordable Price Range 51% Median Low Income Owners 51-80% Median $13,627 - $21,376 764 $40,882 $64,128 221 543 Moderate Income Owners 81-120% Median $21,377 - $32,064 893 81% Median $64,129 120% Median $96,192 81-120% Median 924 31 Moderate Income Owners and Renters 81-120% Median 81% Median 120% Median 81-120% Median $21,377 - $32,064 4,573 $64,129 $96,192 924 3,650 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. District 1 - Vacant Parcels for Potential High Density Multifamily Development Qualified Opportunity Zones Extremely Cost -burdened Renters 0% - 30% 31% - 50% 51% - 100% Land Use Vacant Residential Vacant Commercial Vacant Insitutional: Parking Lot Vacant Insitutional: Land Vacant Govt.: Municipal Vacant Govt.: Dade County Vacant Govt.: School Board Vacant Govt.: Parking Lot Vacant Govt.: Land Vacant Govt.: Federal Vacant Govt.: State 49 District 2 Analysis Housing and Economic Characteristics There are 53,580 housing units in District 2, of which, 72 percent are in multi -family structures of 20 units or more. Single-family structures comprise 24.8 percent of units in the District. An estimated 47.2 percent of units (25,291 units) in the District have been built since 2000. District 2 has the highest vacancy rate in the City (29.2 percent/15,742 units). The high vacancy rate is mainly attributed to the large share (61.2 percent/9,638 units) of "seasonal" vacancies The 81,355 residents of District 2 are primarily renters (63.1 percent/23,514 households) with a median household income of $61,850 compared to $28,650 for City renters, as a whole. An estimated 50 percent of District 2 renters are cost -burdened and 26 percent "severely" cost - burdened. Educational attainment in District 2 is the highest in the City with 57.9 percent of the population 25 years and older with a bachelor's degree or higher. By comparison, 26.4 of the City's population age 25 years and over have a bachelor's degree or higher. The labor force participation rate in District 2 is 71.0 percent, compared to 61.8 percent for the City, as a whole. Workers are employed in a variety of industries and occupations including Professional, scientific, and management, and administrative and waste management services; educational services and healthcare; and finance and insurance, and real estate and rental and leasing. Average annual earnings range from $24,500 in low wage service occupations to $121,600 in professional and management occupations. `IEARLr S f000 RENTAL UNITS ARE 1.4EEDED ID MEET THE DEMAH:i OF RENTERS OF ALL ]NDDME LEVELS (EF.7RElELY LOW - LOW INCDlS} NEARLY 21n 10 RE 1T%L LNTfSARE UN ffORDA& E TO LOW LNCOME RENTERS (r NEARLY 2in10 HOME. ARE UN.FFORDAILE TO LOW A MODERATE WEAVE OWNERS Lk NEWLY 610. ARE NEEDED TO FEET THE DEMAND OF LOW A MATE INCOME OWNERS NEARLY ** 5 in 1O*** RENTERS IN DISTRICT 2 ARE COST -BURDENED �yrERS (6390 AFFORDABLE ROUSING CHALLENGES 0 NERs (.31*1 NEARLY 3 in 1O*** HOME OWNERS EN DISTRICT 2 ARE COST-EAJRDBIEET 26% OF RENTERS SPEND MORE THAN 50 4 THELR INCOME ON HOUSING )) 18% OF OWNERS SPEND MORE THAN SOK, THEIR INCOME ON HOUSING 50 Extremely Cost -Burdened Renters Demographic* TOTAL NUMBER OF RESIDENTS: 81,335 BELOW POVERTY LEVEL A TYPICAL RBI ENT LS EMPLOYED IN MANAGEMENT, SALE & O LDREN_ % OFFICE 1NOIriFRIFS WITH AVERAGE ANNUAL EARNINGS RANGING FROM WORKFORCE- 13% SENIORS: 18% $24,500, $121,600 ■ MW rwy lammelte ifsCLAN !Ma liorimilai Isom ok. Ira pbaa ■,rs.= naw erur. Pimp Existing Housing Demand and Supply The majority (60.8 percent/14,125 households) of District 2 renters fall within the "Extremely -Low" to "Moderate" household income categories. The "Existing Housing Demand and Supply Analysis" below shows a significant supply gap of 5,021 affordable renter units for households within the "Extremely -Low." "Very Low" and "Low" household income categories and substantial surplus in the "Moderate" household income category. District 2: Existing Renter Housing Demand and Suy Analysis HH Incom _= Category Number of Renter Househol (Demand) Affordable Rent Level Number of Renter Units ithin Affordable Price Range (Supply) Surplus/Ga -. within Affordable Price Range Extremely Low Income 0-30% Median 0% Median 30% Median 0-30% Median $0 - $18,855 3,658 $0 $464 713 2,945 Very Low Income 31-50% Median $18,556 - $30,925 2,859 31% Median $465 50% Median $773 31-50% Median 1,288 1,571 Low Income Renters 51-80% Median $30,926 - $49,480 3,483 51% Median $773 80% Median $1,237 51-80% Median 2,978 505 Moderate Income Renters 81-120% Median $49,480 - $74,220 4,125 81% Median $1,237 120% Median $1,856 81-120% Median 7,518 3,393 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. District 2 has relatively smaller owner affordable housing gaps in the "Low" and "Moderate" household income categories. The gap in these household income categories totals 612 units. However, when combined with potential buyers in the "Moderate" renter household category, there exists a gap of 4,319 affordable owner units in District 2. District 2: Existing Owner Housing Demand and Supply Analysis H Income Category I Total Householdbs (Demand) Home Purchase at Affordable Price Levels Number of Owner Units Within Affordable Price Ranee Su' 'I Surplus/Gap within Affordable Price Ran • e Low Income Owners Moderate Income Owners Moderate Income Owners and Renters 51-80% Median $38,084 - $59,740 81-120% Median $59,741 - $89,610 1,276 1,780 51% Median $114,253 81% Median $179,221 80% Median $179,220 120% Median $268,830 51-80% Median 889 81-120% Median 1,553 81-120% Median 81% Median 120% Median $59,741 - $89,610 5,872 $179,221 $268,830 81-120% Median 1,553 386 226 4,319 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. 51 District 2 - Vacant Parcels for Potential High Density Multifamily Development Qualified Opportunity Zones Extremely Cost -burdened Renters 0% - 30% 31% - 50% 51% - 100% Land Use 52 Vacant Residential Vacant Commercial Vacant Insitutional: Parking Lot Vacant Insitutional: Land Vacant Govt.: Municipal Vacant Govt.: Dade County Vacant Govt.: School Board Vacant Govt.: Parking Lot Vacant Govt.: Land Vacant Govt.: Federal Vacant Govt.: State District 3 Analysis Housing and Economic Characteristics There are 34,420 housing units in District 3, of which, 47.6 percent are in multi -family structures of 10 or more units. Single-family structures comprise 24.8 percent of units in the District. An estimated 60.6 percent of units (20,854 units) are in structures 50 years of age or older. The 81,002 residents of District 3 are primarily renters (83.9 percent/25,351 households) with a median household income of $22,760, compared to $28,650 for City renters, as a whole. With nearly 6 in 10 apartments unaffordable to District 3 residents, an estimated 70 percent of renters are cost -burdened and 38 percent "severely" cost -burdened. . Educational attainment in District 3 is among the lowest in the City with only 17.0 percent of the population age 25 years and older with a bachelor's degree or higher. An estimated 33.5 percent of the District's population are without a high school diploma. By comparison, 26.4 of the City's population age 25 years and over have a bachelor's degree or higher and 24.4 percent are without a high school diploma. The poverty rate in District 3 for families with children is 36 percent, compared to 31.8 percent for the City of Miami, as a whole. The labor force participation rate of 60.7 percent is among the lowest of City Districts. Most workers are employed in low -wage service sector occupations with average annual earnings of $21,600 to $32,400. 81400 NTALOUTS AR[ NEEDED TO MEET TIE DEMUR] OF RENTERS OF ALL 1NOSME LEVELS (EXTREMELY LOW • MODERATE ENCDM6) {6 in 10 REMAL (RIFTS ARE IJNAFFORW6LE TO LOW k MODERATE ENCORE RENTERS NEARLY 5 in 10 J A, Lt �•.'•A Ya MODERATE LNCC} E O NER_5 Cr rr NEARMw 600 HOMES ARE NEEDED TO MEET THE DEMAND OF LOW 11 MODERATE INCOME OWNERS 7in10AA 1 RENTERS IN DISTRICT 7 ARE COST -BURDENED 38% 11 AFFORDABLE HOUSING CHALLENGES OF RENTERS STENO MORE TIA SSV"I TIDA 1SCGME ON HOUSING 210/0 „4:NERs 9PB1D MORE TURN 5014 TWIR IPCOW ON HOUSING 4 in 10***** NOME Owr;-- E COST -BURDENED Extremely Cost -Burdened Renters Demographics TOTAL NUMER OF RESIDENTS 81,002 ME.CW POVERTY LEVEL: CHILDREN: WORKFORCE SEN1ORSI 36% 22% 38% A TYPICAL RSIOE1f7 IS EMPLOYED IN SERVICE, SALE S OFFICE ININISTRIES WIT)k AVFIiif !.,' 1 U4L EFStNINGS RANGING FROM $21,600 $32,400 I111.mt .1r 53 Existing Housing Demand and Supply The majority (57.7 percent/14,632 households) of District 3 renters fall within the "Extremely -Low" to "Moderate" household income categories. The "Existing Housing Demand and Supply Analysis" below shows a significant supply gap of 8,482 affordable units for renters in the four household income categories. District 3: Existing Renter Housing Demand and Supply Analysis HH Income Category Number of Renter Households Affordable Rent Levels 30% Median Number of Renter Units ithin Affordable Price Range (Supply) 0-30% Median Surplus/Gap within Affordable price Range Extremely Low Income 0-30% Median 0% Median $0 - $6,895 2,644 $0 $172 385 2,260 Very Low Income 31-50% Median $6,896 - $11,492 3,422 31% Median $172 50% Median $287 31-50% Median 2,115 1,307 Low Income Renters 51-80% Median $11,493 - $18,387 4,324 51% Median $287 80% Median $460 51-80% Median 1,183 3,141 Moderate Income Renters 81-120% Median $18,387 - $27,581 4,242 81% Median $460 120% Median $690 81-120% Median 2,468 1,774 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. In District 3, 5 in 10 owner properties are unaffordable to resident homebuyers. An estimated 40 percent of owners are cost -burdened and 21 percent "severely" cost- burdened." There exists a supply gap of 573 owner units for "Low" and "Moderate" income owner households. However, when combined with potential buyers in the "Moderate" renter household category, there exists a gap of 4,4,00 affordable owner units in District 3. District 3: Existing Owner Housing Demand and Supply Analysis HH Income Category Total dm .Househol (Demand) ome Purchase at Affordable Price Levels Number of Owner Units Within Affordable Price Ranee Su •I Surplus/Gap within Affordable Price Ran • e Low Income Owners Moderate Income Owners Moderate Income Owners and Renters 51-80% Median $13,009 - $20,406 81-120% Median $20,407 - $30,608 508 565 51% Median $39,026 81% Median $61,218 80% Median $61,217 120% Median $91,825 51-80% Median 204 81-120% Median 297 81-120% Median 81% Median 120% Median $20,407 - $30,608 4,717 $61,218 $91,825 81-120% Median 297 304 269 4,420 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. District 3 - Vacant Parcels for Potential High Density Multifamily Development Qualified Opportunity Zones Extremely Cost -burdened Renters 0% - 30% 31 % - 50% 51% - 100% Land Use Vacant Residential Vacant Commercial Vacant Insitutional: Parking Lot Vacant Insitutional: Land Vacant Govt.: Municipal Vacant Govt.: Dade County Vacant Govt.: School Board Vacant Govt.: Parking Lot Vacant Govt.: Land Vacant Govt.: Federal Vacant Govt.: State r • �� ti r7 T.� • l a155 f, ■ 5,1 MI V 0 1 .' 5i5 OM a aII NM . e *1 5 5' 55 District 4 Analysis Housing and Economic Characteristics There are 38,769 housing units in District 4, of which, 66.0 percent are single-family attached and detached structures. An estimated 66 percent of units (26,363 units) are in structures 50 years of age or older. The 104,688 residents of District 4 are primarily renters (53.0 percent/21,573 households) with a median household income of $31.828, compared to $28,650 for City renters, as a whole. With nearly 9 in 10 apartments unaffordable to District 4 residents, an estimated 67 percent of renters are cost -burdened and 38 percent "severely" cost -burdened. Educational attainment in District 3 is relatively low with 22.5 percent of the population age 25 years and older with a bachelor's degree or higher. An estimated 23.2 percent of the District's population are without a high school diploma. By comparison, 26.4 of the City's population age 25 years and over have a bachelor's degree or higher and 24.4 percent are without a high school diploma. The labor force participation rate in District 4 is 60.5 percent, compared to 61.8 percent for the City, as a whole. Workers are employed in a variety of industries and occupations including educational services and healthcare, retail and accommodation and food services. Average annual earnings range from $21,600 in low wage occupations to $101,000 in professional and management occupations. NEARLY Sr 500 RENTAL LNITS ARE NEEDED TO MEET THE FEMME, OF MITERS CF ALL INCOME LEVELS (E?'TREI-ELY LOW - MODERATE NICIOMES) 4in10 rr RENTAL UNITS. ARE UNAFFORDABLE TO L9N & MODERATE INCOME RENTERS re NEARLY 7in10 t HOMES ARE UNAFFORDABLE TO LOAN & MDDEFATE INCCFE OWNERS NEARLY 3,20O HOMES ARE NEEDED TO FEET THE DEMAND OF LOW & MODERATE INCOME OWNERS NEARLY 6in1O*CAI A RENTERS IN D[STRDCT 4 ARE COST -BURDENED SIERS (539 AFFORDABLE HOUSING CHALLENGES 0WyER5 (A10°l NEARLY 38% OF RENTERS SPEND MORE THAN SL�k THEIR INCOME ON HOUSING )) 22% OF OWNERS SPEND MORE THAN 5c' THEIR INCOME ON HOUSING 4 in 10***** HOME OWNERS IN DISTRICT 4 ARE COST -BURDENED 56 Extremely Cost -Burdened Renters llkniogrnplri w Tom_ weal OF RINI/MIS 11111 BELOW POVERTY LEVEL: CHILDREN: WORKFORCE: SENIOR.S_ A TYPICAL RESIDENT TS EMPLOYED jr MANAGEMENT. SALE & righ OFFICE 1147L5TRIE'S WITH AVERAGE ANNUAL EARNINGS RANGING FROM 17% 72% $21,600,0 $101,000 rVar Existing Housing Demand and Supply The majority (37.1 percent/7,496 households) of District 4 renters fall within the "Extremely -Low" to "Moderate" household income categories. The "Existing Housing Demand and Supply Analysis" below shows a significant supply gap of 5,856 affordable renter units for households in the "Extremely Low, "Very Low" and "Low" household income categories and a smaller gap of 246 units in the "Moderate" household income category. District 4: Existing Renter Housing Demand and Supply Analysis H Income Catego i Affordable Rent Levels 30% Median $239 Number of Renter Units ithin Affordable Price Range (Supply) 0-30% Median 385 Surplus/Gap within ffordable ice Range 1,703 ®um . er o Renter Households (Demand) Extremely Low Income 0-30% Median $0 - $9,548 2,088 0% Median $0 Very Low Income 31-50% Median 31% Median 50% Median 31-50% Median $9,549 - $15,914 2,196 $239 $398 445 1,750 Low Income Renters 51-80% Median 51% Median 80% Median 51-80% Median $15,915 - $25,462 3,212 $398 $637 809 2,403 Moderate Income Renters 81-120% Median $25,463 - $38,194 3,789 81% Median $637 120% Median $955 81-120% Median 4,035 246 Source: 2013-2017 American Community Survey, table and calculations by the FIU Metropolitan Center. An Existing Owner Housing Demand and Supply Analysis for District 4 shows a supply gap of 3,244 units in the "Low" and "Moderate" household income categories. When combined with potential buyers in the "Moderate" renter household category, there exists a gap of 5,056 affordable owner units in District 4. District 4: Existing Owner Housing Demand and Supply Analysis HH Incom = Category Total lumber of Owner Surplus/Gap Households (Demand) Home Purchase Price 51% Median $56,143 at Affordable Levels 80% Median $88,068 Units Within Affordable Price Ran • e (Su . s ) 51-80% Median 356 within Affordable Price Range 2,078 Low Income Owners 51-80% Median $18,714 - $29,356 2,434 Moderate Income Owners 81-120% Median 81% Median 120% Median 81-120% Median $29,356 - $44,034 2,124 $88,069 $132,102 958 1,166 Moderate Income Owners and Renters 81-120% Median 81% Median 120% Median 81-120% Median $29,356 - $44,034 6,014 $88,069 $132,102 958 5,056 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. J7 District 4 - Vacant Parcels for Potential High Density Multifamily Development 58 Qualified Opportunity Zones Extremely Cost -burdened Renters O% - 30% 31% - 50% I— 1 51% - 100% Land Use Vacant Residential Vacant Commercial Vacant Insitutional: Parking Lot 11 Vacant Insitutional: Land Vacant Govt.: Municipal Vacant Govt.: Dade County Vacant Govt.: School Board Vacant Govt.: Parking Lot Vacant Govt.: Land Vacant Govt.: Federal Vacant Govt.: State District 5 Analysis Housing and Economic Characteristics There are 41,525 housing units in District 5, of which, single-family detached/attached structures comprise 39.1 percent of all units in the District. An estimated 33.4 percent of units are in multi -family structures of 10 or more units. An estimated 60.6 percent of units (20,854 units) are in structures 50 years of age or older. The 89,862 residents of District 5 are primarily renters (74.4 percent/26,850 households) with a median household income of $22,760, compared to $28,650 for City renters, as a whole. With nearly 5 in 10 apartments unaffordable to District 3 residents, an estimated 60 percent of renters are cost -burdened and 34 percent "severely" cost -burdened. . Educational attainment in District 5 is among the lowest in the City with only 16.9 percent of the population age 25 years and older with a bachelor's degree or higher. An estimated 27.5 percent of the District's population are without a high school diploma. By comparison, 26.4 of the City's population age 25 years and over have a bachelor's degree or higher and 24.4 percent are without a high school diploma. The poverty rate in District 5 for families with children is 49 percent, compared to 31.8 percent for the City of Miami, as a whole. The labor force participation rate of 58.8 percent compared to 61.8 percent for the City, as a whole. Most workers are employed in low -wage service sector occupations with average annual earnings of $21,600 to $32,400. YEARLY $11Q141RENTAL UNITS ME NEEDED TO MEET THE CEMAM OF RBVTERS OF ALL ]NAME LEVELS (EaREMELY LOW - 'MODERATE INCOME) NEARLY 5 in 10 RENTAL [FLITS. ARE UNWTORDABLE TO LE/VP MECERATE INCOME RENTERS NEA31iY fin 10& HOMES ARE UPMFfoRD.AT]LE TO LOW INCOME OWNERS NEARL'+ ■ 6 in 1O**** RENTERS ]N DLS[WSCT 5 ARE COST-9URCENED s .WERS (7696) NEARLY 121 HOMES ARE NEEDED TO MEET THE DAD OF LOV! INCOME OWNER,` AFFORDABLE HOUSING CHALLENGES °WNER5 (.ZA NEARLY 2in1Ow ** 34' Io OF RENTERS SPEND MORE THAN 5VY T#1E[R ]NCOINE ON HOUSING )) 10% OF CMNERS 9P91D MORE THAN 50% THEIR ]NCOME ON HOUSING HOME OWNERS IN DNS[R]CT 5 ARE LOST-91R09]EO Extremely Cost -Burdened Renters Demographic* TOTAL NUMBER OF RESILIENfis. 89,R62 IIELDW POVERTY LEVEL. CHILDREN: WORKFORCE. SENIORS: 49% 31% 36D/ A TYPL &. RESIDENT IS EMPLOYED IN SERVICE, SALE a OFFICE IIPC}IISTRIES WITH AVERAGE ANNUAL EARNINGS RANGING FROM $21,600„ $32,400 OWN.. LEI+ I1 59 Existing Housing Demand and Supply An estimated 48.9 percent (13,141 households) of District 5 renters fall within the "Extremely -Low" to "Moderate" household income categories. The "Existing Housing Demand and Supply Analysis" below shows a significant supply gap of 8,100 affordable units for renters in the four household income categories. District 5: Existing Renter Housing Demand and Supply Analysis HH Income Catego _,.. Renter Households (Demand) ffordable Rent Levels Number of Renter Units ithin Affordable Price Range (Supply) Surplus/Gap within Affordable Price Range Extremely Low Income 0-30% Median $0 - $5,790 3,346 0% Median $0 30% Median $145 0-30% Median 435 2,911 Very Low Income 31-50% Median 31% Median 50% Median 31-50% Median $5,791 - $9,650 3,025 $145 $241 1,173 1,852 Low Income Renters 51-80% Median 51% Median 80% Median 51-80% Median $9,651 - $15,440 3,321 $241 $386 1,234 2,087 Moderate Income Renters 81-120% Median $15,441 - $23,160 3,449 81% Median $386 120% Median $579 81-120% Median 2,199 1,250 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. District 5 has a relatively smaller affordability need for owners. Only 1 in 10 owner properties are unaffordable to resident homebuyers. An estimated 20 percent of owners are cost -burdened and 10 percent "severely" cost -burdened." There exists a supply gap of 121 owner units in the "Low" household income category and a small surplus of 233 units in the "Moderate" household income category. However, when combined with potential buyers in the "Moderate" renter household category, there exists a gap of 3,512 affordable owner units in District 5. District 5: Existing Owner Housing Demand and Supply Analysis HH Income Category Total Households (Demand) 1 Number of Owner Home Purchase at Affordable Units Within price Levels j Affordable Price I. Range (Supply) Surplus/Gap within Affordable Price Range Low Income Owners 51-80% Median 51% Median 80% Median 51-80% Median $18,588 - $29,158 1,102 $55,765 $87,475 981 121 Moderate Income Owners 81-120% Median $29,159 - $43,738 1,059 81% Median $87,476 120% Median $131,213 81-120% Median 1,292 233 Moderate Income Owners and Renters 81-120% Median 81% Median 120% Median 81-120% Median $29,159 - $43,738 4,804 $87,476 $131,213 1,292 3,512 Source: 2013-2017 American Community Survey; table and calculations by the FIU Metropolitan Center. District 5 - Vacant Parcels for Potential High Density Multifamily Development Qualified Opportunity Zones Extremely Cost -burdened Renters 0% - 30% 31% - 50% 51% - 100% Land Use Vacant Residential Vacant Commercial Vacant Insitutional: Parking Lot Vacant Insitutional: Land Vacant Govt.: Municipal Vacant Govt.: Dade County Vacant Govt.: School Board Vacant Govt.: Parking Lot Vacant Govt.: Land Vacant Govt.: Federal Vacant Govt.: State 61 Targeting Affordable Housing Development Opportunity The Geography of Affordable Housing Opportunity Geographically targeting the City's future affordable housing development efforts will be crucial to its success. The conclusion from decades of affordable housing investment and development experience across the US is that geographically concentrating affordable housing investment 1) creates the highest level of impact, and leverages public dollars by generating spin-off investment and development resulting from improved housing, 2) insures greater project success, as an increasing density of improved housing conditions improves market conditions for successive projects, 3) is the only way to truly transform neighborhoods, and 4) is the best defense against large-scale gentrification and displacement. Selecting the geographic targets for future affordable housing preservation and development balances need with opportunity. Clearly, the City's greatest need is to rapidly increase its supply of multi -family rental units, balanced with creating opportunities for access to home -ownership. Both needs will require redevelopment and improvement, preservation, and development of new housing units. Taking into consideration the City's demand, supply, and policy framework, the factors considers to develop a short list of priority neighborhoods for affordable housing development efforts include: • Need, most specifically neighborhoods where incomes are lowest, cost burden is highest, and the threat of gentrification and displacement is highest; • Properties and neighborhoods both suitable for, and already zoned for residential development, especially high -density development zoning with density and parking bonuses available under the City's zoning code; • The availability of low-cost land, both with structures and vacant parcels. Specifically, neighborhoods where the inventory of available affordable housing units, and economically underperforming properties is highest, and coincides with need; • Proximity to existing County public housing projects targeted for redevelopment and expansion under the Federal Rental Assistance (RAD) program; • Proximity to existing and planned public transit, ideally within 1/2 mile of existing and future transit corridors; • The availability of larger vacant property parcels suitable for the development of affordable multi -family developments; and • Neighborhoods either already in economic development zones that include financial and development incentives, including Federal Opportunity Zones, and Census tracts qualified for the use of Federal and State tax credits, including New Markets Tax Credits. 62 to AFFORDABLE HOUSING MASTER -I PLAN FMetropolitan Center FLORIDA INTERNATIONAL UNIVERSITY INVESTING IN THE FUTURE i SOUL OF MIAMI DRAFT 00111. THE CITY OF MIAMI MAYOR FRANCIS SUAREZ COMMISSIONER ALEX DIAZ de la PORTILLA COMMISSIONER KEN RUSSELL COMMISSIONER JOE CAROLLO COMMISSIONER MANOLO REYEE COMMISSIONER KFON HARDEMON CITY MANAGER EMILIO T. GONZALEZ DEPUTY CITY MANAGER JOSEPH F NAPOLI ASSISTANT CITY MANAGER (CFO) SANDRA BRIDGEMAN HOUSING AND COMMUNITY DEVELOPMENT DIRECTOR GEORGE MENSAH HOUSING AND COMMUNITY DEVELOPMENT DEPUTY DIRECTORALFREDO J. DURAN FIU Jorge M. Perez Metropolitan Center Ned Murray, Ph.D., AICP Associate Director, FIU Metropolitan Center Principal Investigator, Contributing Author Kevin T. Greiner, MUP, JD Senior Fellow, FIU Metropolitan Center Principal Study Author Maria Ilcheva, Ph.D. Assistant Director of Planning & Operations, FIU Metropolitan Center Nika Langevin, MSIRE Research Specialist, FIU Metropolitan Center The Florida International University Jorge M. Perez Metropolitan CentE is Florida's leading urban policy think tank and solutions center. Established in 1997, the Center provides economic development, strategic planning, community revitalization, and performance improvement services to public, private and non-profit organizations in South Florida. Its staff and senior researchers are leaders in their respective fields, and bring extensive research, practical, and professional experience to each project. The Center's research has catalyzed major policy initiatives and projects in housing, economic redevelopment, transportation, social services, and health services throughout South Florida. -REPORT DESIGN PREPARED BY: 14k-, ,LAN EVINL8,-11:1N - A N PARKER TheAffordable Housing Master Plan is crucial to the City's future — creating opportunity for City residents and re -developing communities suffering from persistent poverty, underinvestment, and rapid gentrification. Greater housing affordability is a fight for the soul of Miami — enhancing, protecting, and preserving the neighborhoods that make Miami the most diverse and dynamic City in North America. Image Source: Midtown Miami Magazine A FIGHT FOR THE SOUL OF MIAMI Miami, the Magic City, faces an existential threat — the rapid loss of affordable housing is steadily eviscerating the essence of what makes Miami magical. Great cities are comprised of great neighborhoods that must be vigilantly nurtured and preserved, and Miami is fortunate to have some of the most culturally diverse and vibrant neighborhoods in the U.S., including Allapattah, Coconut Grove, Little Haiti, Little Havana, Model City, Overtown and Wynwood. Yet Miami is the nation's most unaffordable large City in the nation — 57 percent of its households (94,638) pay more than 30 percent of their income on housing costs, and more 32.3 percent (39,112 households) of renter households pay in excess of 50 percent of their income on rent. Housing affordability has reached crisis levels in Miami, threatening its economy, businesses, and neighborhoods. Recognizing the need to preserve and positively impact our neighborhoods, the goal of the City of Miami Affordable Housing Master Plan (The Plan) is to ensure the values that are central to the City and its neighborhoods —diversity, inclusivity, sustainability — are supported by a spectrum of housing choice and opportunity and a substantial increase in the quantity and quality of affordable owner and rental housing to all who want to live in Miami. The Plan provides a bold action agenda to address the City's current and future supply and demand of affordable housing. The Plan offers solutions at scale with the City's unprecedented affordable housing need, delivering large-scale production, speed and flexibility. The Plan builds on well -established housing development practices and financing, leveragesthe region's highlytalented and productive development industries, expands the participation of individual homeowners in solving housing affordability, and is in concert with the City's land use, transportation and climate change policies. The Plan was built out of an extensive analytical and review process, contained in the Affordable Housing Master Plan Needs Assessment and Technical Compendium. The Plan also benefitted from an extensive public engagement process involving residents across every City Commission District and focus groups involving over 100 lenders, builders, developers, managers and designers of affordable housing in the Greater Miami area. The Plan is crucial to the City's future — creating opportunity for City residents and re -developing communities suffering from persistent poverty, underinvestment, and rapid gentrification. Greater housing affordability is a fight for the soul of Miami — enhancing, protecting, and preserving the neighborhoods that make Miami the most diverse and dynamic City in North America. .w. ..... . .*WIADPLAN A partnership led by the Mayor's Office, City Commissioners, Department Heads, and the FIU Jorge M. Perez Metropolitan Center has produced a bold and innovative 5-point Miami Affordable Housing Master Plan that after extensive review from citizens and businesses, promises to dramatically improve housing affordability in Miami. The primary goal of the Plan is to increase the spectrum of choice, opportunity, and quality of affordable owner and rental housing to all who want to live in Miami. The objective is to grow the supply of affordable housing from 20 to 25 percent of all housing units in the City by 2030. Since Miami's population will continue to grow, this will require the preservation or development of 32,000 units over the next ten years. The Plan offers solutions at scale with the City's unprecedented affordable housing need, delivering large-scale production, speed and flexibility. The Plan builds on well -established housing development practices and financing, leveragesthe region's highlytalented and productive development industries, expands the participation of individual homeowners in solving housing affordability, and is in concert with the City's land use,transportation and climate change policies. m CARIBBEAN MARKET DAY MIAMI'S FIVE POINT AFFORDABLE HOUSING MASTER PLAN I. AFFORDABLE HOUSINC.; DEVELOPMEN I FOCUS The Plan can't rely on large mega -projects. Instead, the bulk of affordable housing developed over the next ten years will come from improving, protecting and developing single family and multi -family homes from 5 to 50 units. The plan will require focused, smart, and creative development of: 1) small and mid - scale multi -family housing in the City's T-5 and T-6 high density corridors, 2) the rehabilitation of existing single-family and multi -family homes throughout the City, 3) new multi -family housing on vacant residential properties, 4) conversion and expansion of Miami -Dade County's Public Housing Communities to include middle -income housing, 5) the rehabilitation and improvement of accessory dwelling units on existing single-family lots, 6) converting commercial properties and retail plazas to mixed -use, mixed income residential developments, and 7) multi -family housing built around future transportation hubs with an emphasis on equitable transportation oriented developments (ETODs). II. 1 rIE MIAMI AFFORDABLE HOUSING FINA NC P CORPORATIC>N To drive this unprecedented scale of housing development, the City plans to create the Miami Affordable Housing Finance Corporation. The Affordable Housing Finance Corporation will focus on providing low cost loans, grants, and tax incentives to anyone seeking to develop, acquire or rehabilitate affordable housing, and rely on the talent and skills of the area's builders, developers, realtors, managers, owners and non -profits to increase the supply of affordable housing in the City. Under close City oversight, the Affordable Housing Finance Corporation will be an independent City development organization, so that it can operate and grow funding sources quickly and efficiently. Image Source: Greater Miami and The Beaches III. THE MIAMI AFFORDABLE HOUSING INNOVATION FUND (A PRIVATELY FUNDED PLAN PROVIDING AFFORDABLE HOUSING FINANCE FOR ALL) The Miami Affordable Housing Finance Corporation will createthe Miami Housing Innovation Fund. $85 Million dollars of the City Forever Bond will be used to leverage, over ten years, a pool of $1 Billion in state and Federal incentives and tax credits, with the rest provided by private financing, including low interest loans from area banks, real estate investment trust funding, Opportunity Zone funds, shared equity investment programs, Florida Housing Finance and Economic Development loans, grants, and philanthropic donations. Achieving the City's affordable housing goal could require $4 to $6 Billion dollars in total investment over ten years. Though the Innovation Fund, the Miami Affordable Housing Finance Corporation will offer a wide variety of funding assistance and low-cost financing including acquisition, purchase and rehab loans, access to Federal affordable housing programs, loan guarantees, interest -rate write -downs, down payment assistance, and grants. Funding and financing assistance provided through the Housing Innovation Fund is open to anyone, including single family homeowners, to support their efforts to re -build Miami's affordable housing stock and protect its unique neighborhoods. IV. STREAMLINING AFFORDABLE HOUSING DEVELOPMENT FOR ALL RESIDENTS The City will launch programs that make affordable housing development faster and less costly, including 1) selective, careful zoning changes that make review easier, and protect its historic neighborhood fabric, 2) completing an overhaul of its building and construction permitting process to make it faster, easier, and more transparent, 3) fast -tracking zoning and permit review for affordable housing projects, 4) waiving impact and inspection fees for affordable housing, and 5) increasing zoning and permit staff and creating a special unit to review affordable housing projects. V. CREATING NEW BUSINESSES AND JOB' The Miami Affordable Housing Master Plan is also the State's largest economic development initiative. The Master Plan will create over 14,000 new jobs and create a total of over $11 billion in total investment. The Plan is an opportunity to create new businesses and good -paying jobs. A portion of the Miami Affordable Housing Innovation Fund will be invested in 1) Skilled trade training, mentorship, licensing and certification, 2) Equipment grants for small design & construction firms, 3) Construction & Development business incubators, 4) a Community Benefits Agreement with local hiring preferences, 5) A local hiring information and assistance network, 6) Incentives for small, minority, and women- owned businesses, 7) a Housing Technology Innovation Fund, and 8) Climate change resiliency support. *4. MIAMI'SHOUSING AFFORDABILITY PROBLEM WHY HOUSING AFFORDABILITY MATTERS Solving housing affordability is a key investment in the City's economic competitiveness and the quality of life for its residents. Housing is one of the fundamental building blocks of wealth building and is one of the keys to upward economic mobility — a home represents the largest single asset for 98 percent of the nation's families. Keeping housing costs as a reasonable percentage of family income promotes higher educational attainment and improves family health outcomes, as families have more money to spend on education and health costs. Affordable housing has broad -based economic growth impacts. As families keep more of their income, they drive greater local spending which in turn stimulates high -wage job creation, increased tax revenue, and lower public costs for health, human services and policing. Improved affordability promotes inclusive economic growth, where families at the bottom and middle share in expanding regional economic opportunity. Housing affordability can be a potent tool for improving economic performance, driving employment growth, productivity, wages, business development, and retaining and attracting high -skilled, educated workers to the region. The cumulative economic impacts of greater, more widespread housing affordability would be a major boost to developing a more diversified, higher income City economy. VVLCEl PA PI'REZS .SA ZVI if) fA SAratti:14„.1 J SPEED LIMIT Image Source: Courtesy HistoryMiami WHAT'S DRIVING MIAMI'S UNAFFORDABILITY? Housing affordability is balance between income and housing costs. While Miami isn't the most expensive housing market in the nation, it is the most unaffordable because it's housing costs are high and incomes are lower than comparable cities. The dynamics of Miami's affordability crisis is driven by the following fundamental issues: LOW SKILL OCCUPATIONS AND EARNINGS While jobs created in the City are balanced between high- and low -skill industries, City residents largely work in lower income, lower -skilled occupations. Adjusted for inflation, City resident wages have grown 11 percent since 2013. However, with annual median resident worker earnings at $24,931, Miami ranks 3rd to last among 25 comparable cities. 52 percent of City residents work in occupations with median annual earnings less than $35,000. An estimated 45 percent of the jobs created in the City from now through 2024 will be in occupations with a median annual income less than $35,000 per year. The City creates higher paying jobs at a much slower rate than comparable cities. It's 75/50 ratio — the ratio of workers earning $75,000 or more per year versus those earning less than $50,000 per year — is near the bottom of comparable large cities. An estimated 72 percent of the City's resident workers earn less than $75,000 per year. HIGH INCOME DISPARITY At $33,999, the City of Miami's median household income is only 59 percent of the U.S. median household income, and only 73 percent of Miami- Dade's median household income. Adjusted for inflation, the City's median household income has grown by just over 6 percent since 2013. Further, Miami has one of the highest income gaps between households at the top and bottom of all cities in the U.S. The mean income of households in the top 5 percent of income in the City is more than 52 times the mean income of households in the lowest 20 percent of income. The City's poverty rate, hovering between 22 and 26 percent over the last decade, is also one of the highest among comparable cities in the U.S. The City's economic growth continues to be geographically uneven. Across the City's neighborhoods, increasing levels of gentrification has occurred with rising rents and home prices threatening longtime residents and businesses, alike. rAPIDLY RISING HOME VALUES, SALE PRICES & RENTS Miami's December 2018 median single-family home price at $350,000 is near the middle of comparable cities. Miami condominium sale prices since 2013 have actually run below prices across the rest of the US and Miami -Dade County. However, the City's median condominium sale price has increased 59 percent since 2013, more than double the rate of increase for the County. Unlike condo prices, median single-family home sale prices in the City are higher than the US and the County, and from 2013 to 2019 have also increased considerably faster. Miami's median single-family home price has increased over 83 percent since 2013, compared to 50 percent for the US. Miami's multi -family rents have consistently been 20 percent higher than the County and 44 percent higher than the rest of the US. Rents reached their highest point in 2016, declined through 2018, but have increased rapidly since. Rents for new construction consistently run considerably higher than for existing units. COMPETING IN A GLOBAL RESIDENTIAL REAL ESTATE MARKET Miami's popularity as a destination for global real estate investment plays a large role in driving demand and rising real estate prices, particularly for condominiums. However, resident home buyers increasingly compete in an international market against better funded buyers who often pay cash to purchase homes. A significant portion of the City's housing stock is owned as investor units, rather than as primary domiciles. The majority — over 62 percent — of all single-family and condominium units in the City are owned as non -primary units, compared to 47 percent for the County as a whole. Miami's overwhelming international demand drives housing prices that are out of touch with local incomes. The volume of international and non -local sales are driving a growing inventory of units being taken off the rental „ market. wow Image Source: Unsplash GROWING AFFORDABILITY GAPS The City of Miami's housing affordability issues are part of a longer term trend that crested during the previous decade. The share of cost -burdened renters in the City grew from 48.7 percent (42,551 renters) in 2000 to 64.3 percent (62,935 renters) in 2010 as rents and household incomes steadily diverged. Adjusting for inflation, the median rent gross rent rose 15 percent annually between 2012-2017, while the median renter income has grown by less than 1 percent. The gap between incomes and home purchase price has also accelerated. In Miami, the median home sale price is 9 times the median household income — nearly double the ratio for comparable cities. The ideal ratio, based on standard lending underwriting guidelines, is 3:1. The median home sale price for all unit types in Miami is unaffordable to 90 percent of all workers in the County and 81 percent of all households in the City. 32 percent of all renter households are "Severely" cost - burdened —paying in excess of 50% of their incomes on housing costs. LAND AND REDEVELOPMENT CAPACITY Vacant properties available and suitable for new housing development are in short supply within the City. Out ofatotal of 193 Million square feet of vacant property in the City, only 43.7 Million square feet (1,000 acres) are zoned and suitable for residential uses. Of this inventory, only 5.1 Million square feet of vacant property (119 acres) are owned by government entities. As of September 2019, the City's land inventory is insufficient to support the scale required of this plan. The City owns 35 acres of property zoned and suitable for residential development, which under current zoning could support the development of just over 3,100 new units. RAPID DECLINE IN THE SUPPLY OF AFFORDABLY PRICED HOUSING UNITS As housing prices and rents have increased in Miami, the supply of affordable housing units has dropped precipitously, hollowing out both owner and renter units at the middle and bottom of the price scale over the last 5 years. Owner and rental units affordable to households earning up to 80 percent of the City median income - owner units priced under $100,000 and rental units priced at $800 per month - have been decimated since 2013. The City has lost an average of 1,286 affordable housing units each year over the last five years to rising market price pressure. From 2013 to 2017 units affordable to households earning 80 percent of median income or less dropped from 24 to 20 percent of all housing units. Today, the national average of similarly affordable units is 37 percent of renter units, 22 percent of owner units, and 24 percent of all housing units. Over the same period the numbers and relative portion of units priced over $250,000 and $900 per month has increased rapidly. Without intervention, there is no expectation that this situation will change. RAPIDLY DECLINING HOME OWNERSHIn' The City of Miami's population has increased by 25.8 percent (90,943 persons) since 2007. Significantly, the number of renter households has increased by 28,536 (33 percent) during this period, while owners have decreased by 10,333 (17 percent). Miami's current homeownership rate is only 30 percent, lowest among similar size cities and comparable to New York City's low rate of homeownership. Driven by rising housing prices, low relative incomes, shifts in preference and tighter debt financing, the City's percentage of renters continues to rise. Miami has become a City of renters. The City's homeownership rate, at 30%, is the lowest among large cities in the U.S. Owner Occupied Unit Supply Change by Value, 2013-2017 $1,000,000 or more S750,000 to $999,999 $500,000 to $749,999 $400,000 to $499,999 $300,000 to $399,000 $250,000 to $299,999 $200,000 to $249,999 $175,000 to $199,999 $150,000 to $174,999 $100,000 to $124,999 S90,000 to $99,999 S80,000 to $89,999 S70,000 to $79,999 S60,000 to $69,999 S50,000 to $59,999 S40,000 to $49,999 S35,000 to $39,999 S30,000 to $34,999 S25,000 to $29,999 S15,000 to $19,999 S10,000 to $14,999 Less than $10,000 1 Net Units Lost $15,000 - $249,000 7,439 -1,600 -1,200 -800 -400 0 400 8001 ,200 1,6002 ,000 Rental Unit Supply Change by Unit Value, 2013-2017 $2,000 or more $1,500 to $1,999 $1,250 to $1,499 $1,000 to $1,249 $900 to $999 $800 to $899 $750 to $799 $700 to $749 $650 to $699 $600 to $649 $550 to $599 $500 to $549 $450 to $499 $400 to $449 $350 to $399 $300 to $349 $250 to $299 $200 to $249 $150 to $199 $100 to $149 Less than $100 Net Units Lost 1 Less than $1,000/mcntfi II 3,405 • 1 (1,100)(600)( 100)4 00 9001 ,400 1,9002 ,400 2,9003 ,400 3,9004 ,400 4,900 5,400 The City has lost an average of 1,286 affordable housing units each year over the last five years due to rising market price pressure. Image Source: Unsplash P... •••• MIAMIAFFORDABLE HOUSING MASTER • :• PLAN: STRATEGIES & • •• PROGRAMS GROWING THE SHARE OF AFFORDABLE HOUSING The City's best development target is to improve the market share of housing units affordable to households earning 80 percent of median income and below. To significantly reduce its growing housing affordability gap, the City needs to rebuild the share of these units to at least 25 percent of all housing units by 2030. If conditions remain the same — household incomes, the loss of affordable units and expected population increases — the City may need to create as many as 32,000 units affordable to households earning 80 percent of the median income over the next decade. Focusing on the market share of affordable units avoids creating oversupply conditions which would be damaging to the City economy and provides a benchmark against which policy and programs can be adjusted to respond flexibly to market changes. Four principles will be key to the success of the Plan: OSCALE: Strategies and programs that deliver the scale of production required to address the unprecedented scale of the City's affordable housing crisis; ®SPEED: Strategies and programs that can be executed quickly; OFLEXIBILITY: Strategies and programs that can be implemented equitably with a minimum of red tape; and CI INTELLIGENCE: Smart, targeted affordable housing development based on the City's needs and its best housing redevelopment opportunities. San Francisco, California: Permanent Supportive Housing for Former Chronically Homeless Persons at Drs. Julian and Raye Richardson Apartments Formerly a parking lot, this five -story building provides permanent supportive housing for a very -low-income, formerly homeless population. The project is part of the Market + Octavia Neighborhood Plan, which aimsto createa densetransit-oriented neighborhood with housing over retail and streets that are friendly to pedestrians and bicyclists. Source: David Baker Architects. Image Source: David Baker Architects GROW THE PERMANENT SUPPLY OF AFFORDABLE HOUSING Because of its economic structure, Miami's affordable housing needs will continue well into the future. Projects and programs providing permanently affordable housing should take priority in the implementation of the City's Affordable Housing Master Plan. All financing, incentives, and cost support applied to affordable housing development should be conditioned on maintaining affordability for a minimum of 25 years. Maintaining affordability is achieved through a wide range of simple, proven techniques. Strategies that develop or improve housing units without insuring that they remain affordable long-term are ultimately self-defeating — they merely kick the City's affordability problem into the future. The City's immediate and most important strategic priority is to stem the loss of multi -family rental housing affordable to households earning 80 percent of median income using two strategies: 1) preserving existing affordable housing units by providing financing for housing improvements in exchange for extended affordability provisions; 2) preserving existing affordable housing through acquisition. Building new units will play an important part of the plan, but the availability of vacant land for new residential development is in short supply and new units take longer to deliver. AGGI:31 M\sI A. Nin RA IiViNG Rebuilding the City's supply of affordable housing will require a focus on immediate opportunities to finance the acquisition and rehabilitation of existing multi -and single-family propertiesto preserve or convertthemto long- term affordable housing units. Aggressive land banking — the acquisition of vacant, underutilized, or below -market economically underperforming properties — will be needed to build an adequate supply of properties for new construction and expansion projects over the long term. Land banking can be used strategically to protect neighborhoods from rapid displacement and gentrification, and properties acquired in the early years of the plan will provide a hedge against future land price increases, especially focusing on: OEarly opportunities including single-family properties valued at 100,000 or less, and vacant properties valued at $20,000 per permitted unit or less; OConsidering commercial, retail, and occupied rental properties for re -purposing or expansion, especially within the T-6 corridors; OContracting with experienced, third -party non-profit housing organizations to acquire and obtain suitable properties on the City's behalf; and ODeveloping loan products to finance the purchase of properties by for -profit and non-profit builder/developers, with a deed restriction guaranteeing a negotiated supply of affordable housing units subject to obtaining final permits. TAP THE STRENGTH OF THE CITY'S REAL ESTATE DEVELOPMENT INDUSTRY One of the region's leading strengths isthat its real estate development cluster of industries, including development, construction, sales, management and finance is one of the most productive and experienced in the world. Harnessing the talents of the area's real estate development community is probably the only way build at the scale and pace required to change Miami's affordability problem. To attempt to create or re-create public agencies capable of carrying out this plan would be duplicative and probably unsuccessful. LO C A ' ' R O F IT D' 'ILOPnAI k'T r'APAC'Tv Given local land availability, financial resources and the scale at which the Plan needs to function, relying on private, for -profit development of affordable housing won't be enough. The Plan will actively build the capacity of non- profits to partner and work with the City to re -build its supply of affordable housing. The following strategies can be employed to build local non-profit development and management capacity: OConduct a search through an RFP to invite and pre -approve non- profit housing developers with proven records of developing, owning and managing affordable housing at scale. The short list of pre -vetted non -profits selected through this process would be considered "preferred vendors" for working with the City; pj Sponsor and fund rapid expansion and formation of local housing development non -profits, organizing technical assistance, training, and operating funding and improved creditworthiness. Agencies created through this process would also be considered preferred housing development vendors to work with the City; and OOrganize and sponsor the creation of housing development hybrids — partnerships between for -profit and non-profit development companies and agents in which private developers bring their expertise and experience to bear on difficult development challenges on a fee basis. Non-profit partners will bring the experience of building affordable housing at the smaller scale (5-50 units) anticipated in the Plan, and in keeping with the needs of neighborhood residents. The non- profit partner could also focus on long-term ownership and management. LEVERAGE HOUSING INVC"MENT TO REB. "' COMMUNITIES Miami's affordable housing crisis is part of its larger problem of highly concentrated and persistent neighborhood distress. Housing investments anchor and stimulate broader community development. The success of the Plan depends on 1) focusing and targeting affordable housing investments in tightly targeted geographies dramatically improves the chances of programmatic success and return on investment, which delivers a greater return in investment; and 2) leveraging affordable housing development with other community building investment. Affordable housing investment must be coordinated with simultaneous investments in infrastructure, streets, public space schools and commercial development requiring coordinating development spending with other levels of local and state government and the private sector. FOCUS ON MIXED -USE MIXED -INCOME DEVELOPMENT Close to 4.69 Million households live in or receive Federal affordable housing subsidies in the US. The Nation's history of developing single -income public housing has been a success in that has provided Millions of families in need and working households with shelter that may have otherwise been beyond reach. However, the development of single -use, single -income affordable housing development has created communities that concentrate social problems and experience continuing distress. Over the last 30 years affordable housing development has slowly embraced the development of affordable housing as part of mixed -use, mixed income communities. Mounting evidence shows that affordable housing within mixed -use, mixed income developments provides better quality housing, higher safety and lower crime rates, less tenant turnover, lower maintenance costs, significantly higher tax revenues and greater access to private financing. TARGETING THE CITY'S BEST AFFORDA RI F HOUSING OPPORTUNITIES SMALL & MID -SCALE MULTI -FAMILY HOUSING DEVELOPMENT Large housing development projects —100 units or more, will bethe exception, rather than the rule in the City's future housing market. The City's affordable housing market will grow through the development, redevelopment and re - purposing of small and mid -size residential projects from 5 to 50 units in size. PRESERVING THE CITY'S EXISTING AFFORDABLE HOUSING STOCK Targeting existing housing for redevelopment and/or conversion to affordable housing can be the fastest and most cost-efficient means of building an affordable housing inventory. Economically underperforming properties are undervalued relative to the rest of the market, usually due to disrepair, foreclosure, extended vacancy, or a homeowner falling behind on maintenance. Based on the City median assessed value of non -vacant properties, economically underperforming residential properties are those whose per -unit value is less than $150,000. Of the City's over 192,000 existing housing units, over 85,000 (44 percent) are economically underperforming. FOCUS ON MIAMI 21'S T-5 AND T-6 CORRIDORS The City's greatest opportunity to preserve and develop affordable housing lies in its T-6 and T-5 corridors west of 1-95. The City's major T-6 corridors, interspersed with T-5 zoned segments, have high density zoning (up to 150 units per acre), significant existing affordable multi -family housing, a large number of properties with land values equal $20,000 per potential housing unit or less, and have can take advantage of affordable and workforce housing development incentives in the Miami-21 City Zoning Code. The T-5 and T-6 corridors include over 98,000 existing housing units, over 42,000 of which are affordable. Maximum development potential of the vacant properties in the T-5 and T-6 Corridors, based on existing permitted density, is almost 73,000 total housing units. MIAMI-DADE COUNTY PUBLIC HOUSING COMMUNITIES Miami -Dade County's Public Housing and Community Development (PHCD) Division oversees approximately 9,000 public housing units serving mostly low and very -low income households. Over one-third of PHCD's units are in the City. Under the US Department of Housing and Urban Development (HUD) Rental Assistance Demonstration Program (RAD), PHCD is seeking to re -structure 6,246 of its public housing units into mixed -use, mixed -income communities. The RAD program allows for the third -party acquisition of ageing Federally funded housing. The new owners then finance improvements and maintain the housing for families in need. Current residents are given accommodation for housing off -site during construction but are guaranteed to re -lease their units after the improvements are completed. New ownership has the option of increasing the density of the existing development, adding both more below - market and market -rate units to the community. Benefits of the program include better quality housing stock; improved living conditions and health outcomes for residents; removal of the stigma of public housing through more attractive architectural designs; reduced resident utility expenses through increased energy efficiency; expanded housing options; additional job opportunities for tenants and other area residents, reduced crime rates and reduced transportation costs. SINGLE FAMILY NEIGHBORHOODS & SCATTERED SITE DEVELOPMENT An estimated 9,500 of the City's 34,000 single-family homes are affordable to households earning 80 percent of the City median income, concentrated in Little Havana, West Flagler, Liberty City, Little Haiti, Little River, and Allapattah. Targeting these units for financing, acquisition or improvement that converts them into affordable units represent an opportunity to stabilize neighborhoods, assist homeowners challenged with property maintenance, build family wealth. Just over 8.4 Million square feet of vacant properties larger than 5,000 square feet are zoned T-3 under Miami 21. The City's T-3 zoning allows for densities from 9 to 18 units, which represent an opportunity to increase units on properties larger than 5,000 square feet. However, only 399,000 square feet of that inventory is publicly owned. The primary affordable single-family supply building opportunities are: 1) preservation and conversion of exiting units, and 2) development of new units on vacant property large enough to accommodate multiple homes. Investment in single family homes, through important, is incremental in scale. The maximum increase in supply of affordable units through single family preservation and new development is expected to be from 2,000 to 5,000 units. SINGLE FAMILY ACCESSORY DWELLING UNITS Accessory Dwelling Units (ADU's) are small-scale homes (350 to 500 square feet), built on single family lots in addition to the existing single-family home. ADU programs have been launched in a number of cities with much fanfare, but the results have been disappointing. The experience with ADU's is that they are difficult to permit and approve, cost hundreds of thousands to build, are an investment that most families can't afford, and end up being rented at market or above rates. Most of the City's 34,000 single family properties in the City have enough excess space to construct a 400 square foot ADU plus a parking space, but less than 5,000 households have sufficient income to build them. The City estimates that there are currently almost 9,000 ADU's City-wide, but the vast majority are illegal rentals, and many are not built to code. Rehabilitating and improving existing ADU's to safe dwelling standards could be a real winning strategy — providing both affordable housing units and boosting family net worth. However, ADU's won't provide a significant supply of affordable housing in the City's moderate -and low-income neighborhoods without using prefabricated construction technology, financing and permitting changes. Opportunities to build new ADU's are considerably more limited. CAUTIOUS DEVELOPMENT OF MICRO -UNITS Micro -dwelling units — apartments as small as 275 square feet — have been promoted as an affordable housing solution. Miami 21 permits micro - dwelling units (275-399 square feet) for developments in dense Urban Center (T5) and Urban Core (T6) areas served by transit. Micro units, as a large-scale affordable housing solution, may not be the answer to Miami's affordable housing needs. Micro -units serve a small slice of the affordable housing market — 2-person or less households, rely on relaxing occupancy standards (square feet per person) developed over decades of experience, and in Miami thus far, charge rents on a per square foot basis that are at or above market rate. Much has been made of building micro -homes on "left- over" lots. The potential supply of new micro -homes built on leftover lots in the City is actually quite limited — just over 960 units. RE -PURPOSING & CONVERSION OF COMMERCIAL PROPERTIES The shift of retail sales from brick and mortar locations to on-line has dramatically reduced the demand and supply of retail space across the County. The City has a significant inventory of underperforming shopping malls and plazas that would otherwise be suitable for re -purposing as mixed - use, mixed income developments with existing infrastructure, served by mass transit, and accessible from nearby residential neighborhoods. The City's T-6 corridors contain the bulk of the City's inventory of low -density underperforming retail plazas. Although existing zoning supports residential development and affordable housing incentives, additional financial solutions may be needed to deliver affordable housing development on these TRANSIT ORIENTED DEVELOPMENT SITES The City's Master plan incorporates Transit Oriented Development (TOD) — high density mixed -use communities built around transit nodes that maximize ridership on the City's existing and future mass -transit systems. The Miami-21 Zoning code regulations for TOD developments incorporates affordable housing incentives in the form of density bonuses, reduced parking, height additions, and reduced setback requirements. The City's best opportunity for the development of affordable housing within TOD projects will be in the designated TOD sites north of SW 8th Street and West of 1-95, but will need to overcome considerable land assembly challenges. RESIDENTIAL DENSITY INCREASE AREAS Miami-21 provides significant density increases in the neighborhoods east of 1-95 adjacent to the Central Business District. The density increases — up to 1,000 units per acre and building heights up to 80 stories, would otherwise be useful to convert or provide new affordable units. However, even with a mandatory inclusionary zoning policy, expecting any units to be provided in this part of the City is unrealistic due to high land costs, development costs, and prevailing rents. Equitable TOD - Quality of Life = (e)Quality Place Equitable transit -oriented development (TOD) is development that provides access to housing, jobs, and transportation for all members of the community. TOD is uniquely positioned to positively impact low -and moderate -income (LMI) communities by creating affordable housing and economic opportunities where people actually live while connecting workers to other employment centers. Source: Ellinwood + Machado 2079; Images of New Bern ETOD, Charlotte, North Carolina. Lmi r11 'Na Image Source: Ellinwood + Machado The City's best opportunity for the development of affordable housing within TOD projects will be in the designated TOD sites north of SW 8th Street and West of 1-95, but will need to overcome considerable land assembly challenges. . . i a •-.4110 111 *tttt. DISTRICTS The Master Plan provides specific affordable housing opportunities in each Commission District. The affordable housing target areas represent each Commission District's best development opportunities in neighborhoods of greatest need. The following section summarizes the current affordable housing supply and demand conditions in each Commission District and the focus of affordable housing development opportunities. -rs 57, Image Source: Navarro Little Havana • There are 30,524 housing units in District 1, of which, 35.8 percent are in multi -family structures of 20 units or more. Single-family structures comprise 24.8 percent of units in the District. An estimated 54 percent of units (16,485 units) are in structures 50 years of age or older. The majority (60.8 percent/13,113 households) of District 1 renters fall within the "Extremely -Low" to "Moderate" household income categories. District 1 has a supply gap of 7,827 affordable units for renters and 512affordable owner units. NEARLY 4,500 RENTAL UNITS ARE NEEDED TO MEET THE DEMAND OF LOW & MODERATE INCOME RENTERS NEARLY 9in10 RENTAL UNITS ARE UNAFFORDABLE TO LOW & MODERATE INCOME RENTERS NEARLY 8in10 l' HOMES ARE UNAFFORDABLE TO LOW & MODERATE INCOME OWNERS NEARLY 4,200 HOMES ARE NEEDED TO MEET THE DEMAND OF LOW & MODERATE INCOME OWNERS NEARLY 7in10 *it* RENTERS IN DISTRICT 1 ARE COST -BURDENED RENTERS (74%) AFFORDABLE HOUSING CHALLENGES °WNERs (26°°) NEARLY 37% 1� OF RENTERS SPEND MORE THAN 50% THEIR INCOME ON HOUSING 23% OF OWNERS SPEND MORE THAN 50% THEIR INCOME ON HOUSING 5in10 *w'it*^w, HOME OWNERS IN DISTRICT 1 ARE COST -BURDENED Cost -Burdened Renters ono o\, ono h ono \0 0\0 h West Flavler Sonth Cocon 4 Coral Little Havana Upper Eastside Little Haiti ) ntnwn Islands Islands AFFORDABLE HOUSING TARGET AREAS T-6 and T-5 Corridors Public Housing Communities TOD Sites Single Family Neighborhoods Properties with unit value less or equal to $100,000 Image Source: Diario las Americas DISTRICT 2 There are 53,580 housing units in District 2, of which, 72 percent are in multi -family structures of 20 units or more. Single-family structures are 24.8 percent of units in the District. 47.2 percent of units (25,291 units) in the District have been built since 2000. Highest vacancy rate in the City (29.2percent/15,742units), due to the large share of "seasonal" vacancies (9,638 units). The 81,355 residents are primarily renters (23,514 households) with a median household income of $61,850 compared to $28,650 for City renters. 50 percent of District 2 renters are cost -burdened and 26 percent "severely" cost -burdened. The majority (60.8percent/14,125 households) of District 2 renters fall within the "Extremely -Low" to "Moderate" household income categories. District 2 has a supply gap of 5,021 affordable renter units for households within the "Extremely -Low." "Very Low" and "Low" household income categories and owner 612 units. NEARLY 5,000 RENTAL UNITS ARE NEEDED TO MEET THE DEMAND OF RENTERS OF ALL INCOME LEVELS (EXTREMELY LOW - LOW INCOMES) NEARLY 2 in 10 RENTAL UNITS ARE UNAFFORDABLE TO LOW INCOME RENTERS NEARLY 2 in 10 lb HOMES ARE UNAFFORDABLE TO LOW & MODERATE INCOME OWNERS NEARLY 610 HOMES ARE NEEDED TO MEET THE DEMAND OF LOW & MODERATE INCOME OWNERS NEARLY 5in10 ***** RENTERS IN DISTRICT 2 ARE COST -BURDENED RENTERS (63%) AFFORDABLE HOUSING CHALLENGES OWNERS (3D°0 26% OF RENTERS SPEND MORE THAN 50%THEIR INCOME ON HOUSING 18% OF OWNERS SPEND MORE THAN 50% THEIR INCOME ON HOUSING NEARLY A A' 3in10 ***** HOME OWNERS IN DISTRICT 2ARE COST -BURDENED 1 Cost -Burdened Renters o\o ono South Coconut Grove Upper Eastside Little Haiti AFFORDABLE HOUSING TARGET AREAS TOD Sites Properties with unit value less or equal to $100,000 vertowii Image Source: Greater Miami and The Beaches a 1 Cost -Burdened Renters There are 34,420 housing units in District 3, of which, 47.6 percent are in multi -family structures of 10 or more units. Single-family structures ono ono ono compromise 24.8 percent of units in the District. An estimated 60.6 `'° '�° 0 percent of units (20,854 units) are in structures 50 years of age or older. o�° 3`\ <ON The 81,002 residents of District 3 are primarily renters (83.9 percent/25,351 households) with median household income of $22,760, compared to $28,650 for City renters. With nearly 6 in 10 apartments unaffordable to District 3 residents, an estimated 70 percent of renters are cost -burdened and 38 percent "severely" cost -burdened. District 3 has a supply gap of 8,482 affordable units for renters and 573 owner units for "Low" and "Moderate" income owner households. NEARLY 8,400 RENTAL UNITS ARE NEEDED TO MEET THE DEMAND OF RENTERS OF ALL INCOME LEVELS (EXTREMELY LOW - MODERATE INCOMES) NEARLY 6in10 RENTAL UNITS ARE UNAFFORDABLE TO LOW & MODERATE INCOME RENTERS ff NEARLY 5in10 l� HOMES ARE UNAFFORDABLE TO LOW & MODERATE INCOME OWNERS NEARLY 600 HOMES ARE NEEDED TO MEET THE DEMAND OF LOW & MODERATE INCOME OWNERS NEARLY 7in10 RENTERS IN DISTRICT 3 ARE COST -BURDENED ENTERS (83%) AFFORDABLE HOUSING CHALLENGES OWNERS (11°/i NEARLY 38% OF RENTERS SPEND MORE THAN 50%THEIR INCOME ON HOUSING 21 % OF OWNERS SPEND MORE THAN 50%THEIR INCOME ON HOUSING A 4 in 10 **it** HOME OWNERS IN DISTRICT 3 ARE COST -BURDENED Up,, Little Haiti AFFORDABLE HOUSING TARGET AREAS O T-6 and T-5 Corridors Public Housing Communities TOD Sites Single Family Neighborhoods Properties with unit value less or equal to $100,000 Overtown Density Increase Area L % ' . r .y. • .. • . • • .4_,... ...... all 111‘.11.11 r .1 :.1' 1 1 1 ■ 1 1 • •• 1 ' i 1 11 1 ■ •r 1 • 1 1 - ''�r- rr•r•m` '►1 !- -11 1� 1 • r,1. J'-''▪ 3 rton�r� • ilia Ilr .9rwm .1i urir.ui. WIN; •.1i-1r111 '1'_II 1 ' !It l'ITia r.-a.., •1■ ' . y-.Irttl.er ,'va�na ..... �' .'r 1 aka • 62 1 . •9'6.m. 1L1'11I�IT. '1L=�i■9'-'1ii.'-J1. 5: "- r 'ti; J.• 1 1 ',■f1r■�F�r■ 14TkrIIV'.� 7,_•11-JS-, + _• T ■'e, _ 1 ... -.• 7 ma■ r 11- 1 I w 1 ■ ■ 1 . r •-1 1 ■ . 1'. L. I - •1■ _-,'.Jr'I✓y I■ - .11 . _'; ..■ .., , • 1 111 : - 1 .1 _ - - - 1i136 • 11 . 11■ 111 _ ' 11 • I ,. 1 ■ ' ✓ 1 r1 ■ 611 Image Source: Unsplash 1 DISTRICT 4 There are 38,769 housing units in District 4, of which, 66.0 percent are single-family attached and detached structures. An estimated 66 percent of units (26,363 units) are in structures 50 years of age or older. The 104,688 residents of District 4 are primarily renters (53.0 percent/21,573 households) with median household income of $31,828, compared to $28,650 for City renters. With nearly 9 in 10 apartments unaffordable to District 4 residents, an estimated 67 percent of renters are cost -burdened and 38 percent "severely" cost burdened. District 4 has a supply gap of 5,856 affordable renter units for "Extremely low, "Very Low" and "Low" income households and 2,078 owner units. NEARLY 5,500 RENTAL UNITS ARE NEEDED TO MEET THE DEMAND OF RENTERS OF ALL INCOME LEVELS (EXTREMELY LOW - MODERATE INCOMES) NEARLY 4 in 10 RENTAL UNITS ARE UNAFFORDABLE TO LOW & MODERATE INCOME RENTERS NEARLY 7in10 l� HOMES ARE UNAFFORDABLE TO LOW & MODERATE INCOME OWNERS NEARLY 3,200 HOMES ARE NEEDED TO MEET THE DEMAND OF LOW & MODERATE INCOME OWNERS NEARLY 6 in 10 **it* RENTERS IN DISTRICT 4 ARE COST -BURDENED ENTERS (53%) AFFORDABLE HOUSING CHALLENGES °WNERs (41°/) NEARLY 38% OF RENTERS SPEND MORE THAN 50% THEIR INCOME ON HOUSING 22% OF OWNERS SPEND MORE THAN 50% THEIR INCOME ON HOUSING A' 4 in 10 Mt*** HOME OWNERS IN DISTRICT ARE COST -BURDENED st-Burdened Renters 3 o\° o\° o\° o ,�o Upper E,astside Little Haiti ) AFFORDABLE HOUSING TARGET AREAS T-6 and T-5 Corridors Public Housing Communities TOD Sites Single Family Neighborhoods Properties with unit value less or equal to $100,000 West Flagler Coral Way North Coconut Grove Image Source: Unsplash DISTRICT 5 There are 41,525 housing units in District 5, single family detached/ attached structures compromise 39.1 percent of all units in the District. 33.4 percent of units are in multifamily structures of 10 or more units. 60.6 percent (20,854 units) are in structures 50 years of age or older. The 89,862 residents of District 5 are primarily renters (74.4 percent/26,850 households) with a median household income of $22,760, compared to $28,650 for City renters. With nearly 5 in 10 apartments unaffordable to District 5 residents, an estimated 60 percent of renters are cost -burdened and 34 percent "severely" cost - burdened. An estimated 48.9 percent (13,141 households) of District 5 renters fall within the "Extremely -Low" to "Moderate" household income categories. District 5 has a supply gap of 6,850 affordable units for renters in the four household income categories, and 121 owner units in the "Low" household income category. NEARLY 8,100 RENTAL UNITS ARE NEEDED TO MEET THE DEMAND OF RENTERS OF ALL INCOME LEVELS (EXTREMELY LOW - MODERATE INCOMES NEARLY 5in10 RENTAL UNITS ARE UNAFFORDABLE TO LOW & MODERATE INCOME RENTERS NEARLY f 1 in 10 l' HOMES ARE UNAFFORDABLE TO LOW INCOME OWNERS NEARLY 121 HOMES ARE NEEDED TO MEET THE DEMAND OF LOW INCOME OWNERS NEARLY 6 in 10 ^w' * * * RENTERS IN DISTRICTS ARE COST -BURDENED 1ERS (53%) AFFORDABLE HOUSING CHALLENGES OWNERS (4-7°/i NEARLY 34% 1� OF RENTERS SPEND MORE THAN 5O%THEIR INCOME ON HOUSING 10% OF OWNERS SPEND MORE THAN 5O%THEIR INCOME ON HOUSING *It* A 2in10 ***** HOME OWNERS IN DISTRICT 5ARE COST -BURDENED Cost -Burdened Renters o\° 3 o\o AFFORDABLE HOUSING TARGET AREAS T-6 and T-5 Corridors Public Housing Communities TOD Sites Single Family Neighborhoods Properties with unit value less- or equal to $100,000 Overtown Density Increase Area • Io-RCvm, ra ryW. - - - ' • ' •r rI - -.I._• �• ' - •- r. R9rTh= • -_• lie .L,1..��i-.'■ 7FTellfcr. ;..m . ..�•,-L-�ittlerHZavana „ter n Downtown Islands Image Source: Miami Today AFFOKDABLE HOUSING OPPORTUNITIES CITYWIDE MAP O O O O O T-6 and T-5 Corridors Public Housing Communities TOD Sites Single Family Neighborhoods Properties with unit value less or equal to $100,000 Overtown Density Increase Area Flagami West Flagler 1 0 Model City O 0 80 6) 8 0 All pattah 0 0 0 0 Upper Eastside Little Haiti I ) Wynwood 0 vertown 0 0 Downtown 4 Coral Way Little Havana 0 3 North Coconut Grove South Coconut Grove Islands 2 Islands AFFORDABLE HOUSING OPPORTUNITIES CIT Vacant Property Analysis Vacant Property Potential New Units (Market & Lots Acres Affordable) Privately Owned City Owned Other Govt. Owned Undersized Buildable Lots TOTAL 3,501 97 232 884 35 84 77,202 3,108 9,277 3,830 1,003 967 88 89,587 967 4,797 1,091 90,554 The City's Affordable Housing Development Opportunities Total Existing Units Existing Affordable Units Potential New Units on Vacant Property (Market & Affordable) T5 and T6 Corridors 98,954 42,256 Single Family Homes 34,172 4,234 Miami -Dade County Public Housing Communities (RAD Program) Transportation Oriented Development Sites Re -Purposing & Conversion of Commercial Properties Single Family Accessory Dwelling 9,000+ Units 2,035 2,035 13,176 4,743 72,962 3,289 5,433 8,870 5,500 8,000+ 967 I.. POMIAMI AFFORDABLE ••••••• • 41L HOUSING INNOVATION FUND To successfully implement the Master Plan, the City will create a Miami Affordable Housing Innovation Fund — a single, tightly organized, professionally managed Fund that will finance the City's affordable housing development. The Fund will be managed by a "Miami Affordable Housing Finance Corporation," using the following strategies. OReaching scale quickly followed by continuous fundraising: Providing resources to implement the Master Plan will require reaching significant scale as quickly as possible. However, creating a financing structure at this scale won't happen all at once, and will need to be grown continuously over the next decade; OA local, privately funded plan: Shrinking federal and state funding sources means $85 million dollars of the City Forever Bond will be used to leverage, over ten years, a pool of $1 billion in corporate and philanthropic investment supplemented with various state and federal incentives and tax credits. 0 0 Flexibility: Financing provided by the Fund will be flexibly applied, providing speed to the development process. Growing the Fund would be specifically open-ended, built through direct cash investments, partnerships, and long-term commitments to use funding and resources from lenders (for and non-profit), institutional investors, philanthropic donors and granting institutions. Investors and partners of the Fund would have the option of directing how their funds are used within the Fund — as a for -profit (below -market returns), non-profit, philanthropic donation, grant, or funding commitment. Investor -partners could also direct specific uses of their funds or commitments (i.e. rental unit, owner -occupied, acquisition, preservation, new construction, loan guarantees, etc.); Replenishment: The Fund will avoid one-time giveaways by structuring funding as much as possible as revolving sources that return value and cash back to the affordable housing funding pool. The Plan needs to be self-sustaining over at least the next decade; 0 0 Partnerships and Tong -term commitments: Leveraging public dollars in the Fund is crucial, and will require partnerships with banks, lenders and investors making long-term commitments to the City's Master Plan; and Funding under one roof: Home buyers, developers, owners, renters and builders of affordable housing need access to a wide range of financial products and programs. A major aspect of the Fund will be its focus, commitment and single, transparent point of entry with funding and financial assistance open to anyone, including single-family homeowners, to support their efforts to re -build Miami's affordable housing stock and protect its unique neighborhoods. Developing the financing engine to drive the implementation of the Master Plan will be is a daunting challenge. As such, the development and management of the Fund will require full adherence to the four operational principles of the Master Plan — Scale, Speed, Flexibility and Intelligence. The total investment required to reach the 25 percent affordable unit market share target will require somewhere between $4 and $6 billion of total investment over ten years. The City of Miami is fortunateto havethe real estate development and finance expertise, major national and international corporations and large and active philanthropic institutions to provide the investment platform on which the Master Plan's financing requirements can be built. Capitalization of the Fund will be served by Miami's considerable financial investment capacity. MIAMI AFFORDABLE HOUSING INNOVATION FUND The Master Plan's Affordable Housing Innovation Fund is a "layered" fund, which combines multiple sources of capital from across different sectors — public, private, and philanthropic (social impact investment) —into a single revolving loan fund for nonprofit and private affordable housing developers. Such funds vary in terms of their "capital stack." What share of the capital in the fund will come from the public, private, and philanthropic sectors will be determined by need and investment capacity. Importantly, combining different sources of funding - private capital, public subsidy, corporate and philanthropic investment - will help overcome the limitations of each. Examples of affordable housing funds include the NYC Acquisition Fund, the San Francisco Housing Accelerator Fund, the LA MATCH Fund and the Washington D.C. Affordable Housing Preservation Fund. The funds provide for a wide range a wide range of investment types including acquisition, pre -development, secured and unsecured debt, rehabilitation and program related investments (PRIs). Miami's Affordable Housing Innovation Fund will include a variety of investment resources as part of a 10-Year Capitalization Plan. The table below provides an overview of potential sources, investment activities and target amount. ") 11/ ./ •kx., t' —4 .r.'4e..17, -1V',‘4, '1. ^J`v bush a—=iJ—= MIAMI AFFORDABLE HOUSI►IG INNOVATION FUND - 10-YEAR CAPITALIZATION PLAN PRIMARY SOURCE` The City of Miami Forever Bond Commercial Loans (Private Loan Pool) Philanthropy (Impact Investing) Real Estate Investment Trusts (REITs) OTHER POTENTIAL SOURCES New Market Tax Credits (NMTC) Proposed Empty Home (Vacancy) Tax Affordable Housing Linkage Fees (1)Total potential revenue over 10 years POTENTIAL ACTIVITIES Acquisition & pre -development loans, first time homebuyer and rehabilitation grants & low-cost loans, shared equity investment, accessory dwelling unit (ADU) construction Senior debt, mezzanine debt ADU financing, mortgage loans, home repair loans Start-up grants, subordinate debt Equity investments in acquisitions, affordable housing development and preservation Mixed -use, mixed -income project financing Acquisition & pre -development loans, affordable housing development, rehabilitation financing, shared equity investment, accessory dwelling unit (ADU) construction Acquisition & pre -development loans, affordable housing development and rehabilitation financing, shared equity investment, accessory dwelling unit (ADU) construction TARGETED AMOUNT $85 M $400 - $500 M $300 M - $500 M $100 M $75 M - $200 M $200 M - $800 M (1) $200 M - $800 M (1) RESOURCES COMPRISING THE MIAMI AFFORDABLE HOUSING INNOVATION FUND The core investment vehicles that will drive and sustain the Miami Affordable Housing Innovation Fund for the full 10-year duration of the Master Plan include, but not limited, to the following: THE MIAMI FOREVER BOND The Miami Forever Bond Fund represents the most important seed funding to implement the full scope of this Plan. The first $15 Million of the $100 Million Forever Fund affordable housing commitment has been dedicated to multi- and single-family affordable housing project scattered across the City. The remaining $85 Million is the platform on which the City leverages the total funding needed to drive the Housing Innovation Fund concept. There are two keys to successful use of the Forever Bond: OUse the Forever Bond to leverage third -party debt and commitments from other sources; and Oj Insure Forever Bond funds are utilized as a revolving and replenishing source of funding, not grants. The best uses of the Forever Bond are: OSeed funding on which to build additional cash reserves, from other sources; O Equity applied to the finance and debt product listed below, most importantly, acquisition and pre -development loans, equity mortgages, down payment assistance, land purchase loans, and a small reserve set aside to back-up loan guarantees. COMMERCIAL BANK LOAN FUNDS Lending institutions are incentivized to lend to affordable housing developers in order to meet their commitment under the federal Community Reinvestment Act (CRA), which requires commercial banks to serve the credit needs of low - and moderate -income communities and to take steps to provide equal access to responsible financial products and services to traditionally underserved populations. Commercial lending investment in the Miami affordable Housing innovation Fund will provide the "senior" debt required for affordable housing projects. Senior debt refersto debt that must be paid off first. This usuallytakesthe form of traditional, commercial loans from private lenders. New affordable housing projects are typically first financed with an acquisition and construction loan. These are short-term loans that mature in 12 to 36 months. They are sized based on a percentage of the total development cost (TDC) and typically include reserves, developer guarantees, and other additional security for the lender. Once a project is fully constructed and has been occupied at a certain level and for a certain period of time ("stabilized"), the construction loan is typically paid off from a combination of sources, including some or all of the following: a senior permanent loan, typically with a maturity of 15-30 years, one or more subordinate loans, and tax credit equity. PHILANTHROPY: SOCIAL IMPACT INVESTORS The Miami Affordable Housing Innovation Fund is expected to generate considerable interest from social impact investors. The need for affordable housing in the U.S. is growing, and with it, opportunities to invest for impact. Social impact investments are investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return. Impact investments can be made in both emerging and developed markets and target a range of returns from below market to market rate depending on investors' strategic goals. This is a growing impact investment market providing capital to address major social issues such as affordable housing, healthcare and education. Social impact investment funds will enable the Affordable Housing Finance Corporation to lend, on an unsecured basis, to nonprofit developers flexible, responsive capital so they can compete with market -rate developers and fill in the financing gaps that arise before they secure long-term, secured capital solutions. Social impact investment will also take the form of "start-up" grants for the corporation. REAL ESTATE INVESTMENT TRUSTS (REITs) A real estate investment trust ("REIT") is a company that owns, operates or finances income -producing real estate. REITs sell on the major stock market exchanges just like common stock. REITs raise money from a collection of investors and provide them with access to real estate. With the growth of affordable housing needs nationwide, a number of REITS are specializing in, and moving investments into affordable housing. REITS focused on long term investing in affordable housing could be an important vehicle for preserving and converting affordable housing in Miami. While most REITs focus on market -rate housing, a social -purpose REIT that partners with nonprofits to acquire affordable and sustainable rental housing can be an effective funding source. Examples include the New York -based Community Development Trust (CDT), a hybrid REIT and a designated community development financial institution (CDFI), and the Housing Partnership Equity Trust (HPET) who distinguish themselves as "the only social -purpose real estate investment trust created by nonprofits to raise capital for affordable housing". CDT provides long-term capital for the preservation and development of affordable rental housing in 44 states. A critical part of their work lies in filling in the gaps, providing capital for predevelopment-stage activities, and offering flexible financing products that traditional sources of capital can't or won't provide. CDTtakes a hybrid approach —making both equity investments in acquisitions or developments and making or buying mortgages used for the same purposes. Both HPET and CDT partner with for -profit and nonprofit groups that have extensive experience in affordable housing. NEW MARKETS TAX CREDITS (NMTC) Federal New Market Tax Credits (NMTC) are one of the most successful community development programs in Federal history, and Florida has emulated the program with its own state New Markets Tax Credits. The NMTC attracts private capital investment in areas where the poverty rate is at least 20 percent or where the median income of the community is at or below 80 percent of the broader area median income. While the credit is not available for investments in projects that involve solely residential rental housing, the credit is available for investments and loans for certain mixed -use projects and certain other types of housing development, as long as at least 20 percent of the gross rental income from the building is from non-residential rentals. NMTCs are allocated annually and can be used by non-profit or for -profit. Investors purchase the tax credits though a syndication process, and the cash they use to buy the tax credits goes toward a development project as an equity contribution. The equity contribution is paid back to the investor through annual tax credits, taken over seven years on their Federal tax return. At the end of seven years, the investor retires from the project, and their equity stake is relinquished — providing up to 20% of a project's cost for free. NMTCs can be used for mixed -use projects, as long as housing revenue is 80 percent or less of total annual project revenue. NMTCs are awarded annually through a competitive process offered through the US Department of the Treasury. Three Florida Banks and one community development institution regularly secure between $250 and $350 Million each year for use across the State, but NMTC financing is rarely utilized in Miami -Dade County. LEVERAGING CITY PROPERTY FOR AFFORDABLE HOUSING The City currently owns just over 35 acres of property, valued at $171.1 Million, that is suitable for affordable housing. The best uses of City -owned properties are: 1) aggressively pursue intergovernmental transfers of vacant and underutilized property from the County, State and Federal governments, 2) seek donation of properties from philanthropic donors, 3) at the outset of implementation of the Master Plan, adopt a single policy for the use of property it owns or acquires for affordable housing, and 4) utilize its properties as equity contributions to affordable housing projects. By agreement, the City could choose to receive a cash payment on sale of the property, hold the property under a long-term lease, or structure a low-cost repayment of the property value. In all cases, deed restrictions can be used to insure the development and preservation of affordable housing units. PROPOSED EMPTY HOME (VACANCY) TAX Miami's residents compete against international investors for housing, and while demand for housing is a crucial part of the local economy, the global demand for vacation units that remain empty and are never placed into the rental market has been growing steadily since 2009. The City of Vancouver, faced with an affordable housing climate rivaling Miami's, enacted the Vacancy Tax By-law (No. 11674), or Empty Homes Tax (EHT) program in November 2016. The EHT charges homes that are empty for more than six months out of any year an annual tax of 1 percent of the property's assessed value. Funds collected from the EHT are applied to develop affordable housing throughout the City. Most residential properties are not subject to the tax, including homes that are principal residences for at least six months of the year; homes that are rented out for at least six months of the year; or homes that are eligible for one of eight exemptions as set out in the EHT by- law. Vancouver property owners submit a declaration each year confirming the status of their property as vacant or occupied. Penalties accrue for not paying the tax, and the City conducts a survey each year to determine compliance. Currently, 2,538 homes out of the City's total of 186,043 qualified as vacant and eligible for the EHT. As of November 2018, the EHT has raised a total of $38 Million for Vancouver's affordable housing programs. In addition to funds raised, an additional impact of the EHT is that a large number of formerly vacant units have been put into the rental market, increasing supply. Miami's Planning Department tested the revenue generating potential of an EHT program in the City. Miami's vacation rental supply is over 12 percent of the total housing supply. Ion the City's estimate, a similar 1 percent of property value tax could raise as much as $100 Million annually. Given the scale of Miami's affordability crisis, and the relatively low financial impact of the EHT on second -unit homeowners, the City should consider an EHT as a vehicle to implement the full extent of this Plan. PROPOSED AFFORDABLE HOUSING LINKAGE FEE PROGRAM Hundreds of housing linkage fee programs exist across the country, and they are most prevalent in California, Massachusetts and Washington. Under a linkage fee program, a property developer pays a dollar fee per square foot of development. The fee is a sliding fee based on land use type, specifically the occupations and wages of the employees who will be employed at the property when completed. Land uses creating predominantly low -wage jobs pay a higher linkage fee because they create more demand for affordable housing. Proceeds from the Linkage Fee are then applied to the development of affordable housing. Another type of linkage regulation charges a fee to industrial, commercial, and office developments to help pay for the costs of new housing that these developments will require because of the workers they attract or bring with them. In some cases,these developers are directly required to supply a certain amount of housing, often at affordable rates. These linkage requirements may come with incentives as well in order to make it easier for a developer to comply. Broward County has studied and is currently considering applying a linkage fee across the County. The City should also consider studying the application of a linkage fee, as lower wage serve sector employment will remain as a OPPORTUNITY ZONES AND OPPORTUNITY ZONE FUNDS Opportunity Zones were created as part of the Tax Cuts and Jobs Act of 2017 to incentivize investment in targeted distressed census tracts designated by local governments. Individual and institutional investors can transfer a capital gain from selling assets including real estate or stocks into an Opportunity Fund that in turn invests in housing, commercial development and infrastructure in Opportunity Zone communities. Opportunity Funds allow investors to defer federal taxes on any recent capital gains until December 31, 2026, reduce that tax payment by up to 15%, and pay as little as zero taxes on potential profits from an Opportunity Fund if the investment is held for 10 years. Similar to REITS, with advent of the Federal Opportunity Zone Program, Opportunity Zone Funds have grown in number, size, and sophistication across the US. Partnering with, sponsoring or forming Opportunity Funds to invest in affordable housing in the City's Opportunity Zones could provide a significant source of low-cost equity funding. The City's current Opportunity Zones cover Little River, Little Haiti, Liberty City, Allapattah, Grapeland Heights, Coral Gate, Overtown, and small parts of Flagami and Coconut Grove. STATE OF FLORIDA ECONOMIC DEVELOPMENT FUNDING PROGRAMS The State of Florida has multiple "Urban" and economic development incentives that may not directly fund housing development but can be crucial components of overall project financing to lower project development costs, operating costs, and fund infrastructure. The State's Urban Incentives programs that "offer increased incentive awards and lower wage qualification thresholds for businesses locating in many urban core/inner city areas that are experiencing conditions affecting the economic viability of the community and hampering the self-sufficiency of the residents." State funding that can be applied to affordable housing development, especially mixed -use, mixed income projects include: V The Economic Development Transportation Fund; OLocal Government Distressed Area Matching Grant Program (LDMG); OState of Florida Brownfield Program; O State and FPL Energy Efficiency Grants; O Building Better Communities (BBC); OThe Quality Neighborhood Improvement Program; and O The State Private Activity Bond AFFORDABLE HOUSING INNOVATION FUND FINANCING PRODUCTS The following are the range of financing products to be made available for nonprofit and private developers, builders sand homeowners through the Affordable Housing Innovation Fund: SHARED EQUITY INVESTMENT Shared equity investment lowers housing costs by either removing a portion of a property's cost (land cost), reducing debt repayment cost by lowering a borrower's mortgage equity requirement, or allowing homeowners to make partial payments to build the equity to purchase a home over an extended period. Shared equity investments can help provide a permanent affordable housing supply, and a source of revolving funds that can be re -invested in new properties. Shared -equity ownership, investment, and financing can be applied across a wide range of housing types including single- and multi- family owner and multi -family rental properties. Shared equity investment is especially useful for non -profits and small project developers and homeowners, who will be key stakeholders in the Master Plan. Shared equity investment is an excellent way to expand homeownership opportunities and help stabilize existing owners with challenging maintenance costs. It can be applied to existing owner rehabilitation programs, in exchange for long-term affordability, and leverages the City's funds when the debt is provided by third -party lenders, and funding can come from any source — public, private, or philanthropic. It also manages risk and can provide a soft cushion for renters and owners in financial difficulty with longer grace periods or restructuring loans and/or leases to assist families in need. PROPERTY ACQUISITION AND PRE -DEVELOPMENT LOANS Property Acquisition Loans will provide developers of affordable housing with the financing to act quickly to acquire land and buildings as they become available. Affordable housing developers will be able to acquire properties directly using up -front financing provided through the fund. Property acquisition loans are typically issued on a short-term basis (flexible bridge loans) at below -market interest rates and replaced by permanent financing once it is arranged. Related pre -development costs are also an allowable expense, including costs associated with conducting appraisals and environmental assessments, demolition and site clearance and securing title and zoning approvals. TRADITIONAL DOWN PAYMENT ASSISTANCE Down payment assistance to home buyers to help them qualify for mortgages and reduce the cost of homeownership debt is an established practice across the US. The Fund will provide a portion of the mortgage equity requirement for a qualifying buyer as a grant, a zero -interest loan, or below market rate interest loan. Some loan products forgo loan repayment until future sale of the home. Even small amounts spent increasing equity on lower cost homes can significantly reduce the cost of debt, extending ownership opportunities to low-income families. SHARED -EQUITY MORTGAGE LOANS Private investors have moved into the shared equity market, developing privately funded mortgage products in which the Fund can either provide or arrange private debt, and also provide a portion of the equity required of the borrower/homeowner. The shared -equity investor does not take any repayment of their equity contribution until the sale of the home, and then at an agreed upon rate of return. The borrower/homeowner gains access to ownership at a reduced debt repayment schedule and builds equity. The shared -equity investor receives a return on its equity share. LEASE -PURCHASE AGREEMENTS Lease -purchase agreements are also a time -tested form of improving access to ownership on which a prospective buyer rents a home with a portion of the lease payment applied to an equity account that is used, when it reaches a required level, to purchase the home. Lease -purchase agreements work well for households who may not be ready to purchase a home but can save money toward its eventual purchase. The model also provides stability and predictability for the renter/buyer, in that 1) they can commit to living in a unit knowing that they will eventually own it and not have to move when ready to buy, and 2) the renter/buyer gets to keep the value of any improvements they make to the home, rather than lose them by moving elsewhere. HOUSING CO-OPS Housing co-ops havefallen out of favor in Miami with the growth and increasing ease of use to provide multi -family units for short-term and vacation rentals. In a housing cooperative (Co-ops), buyers technically don't own their own unit, but shares in the entire building. Ownership shares grant exclusive use of a specific apartment unit and voting rights in the co-op's governing board. Co-ops traditionally have much more stringent use, occupancy, and rental rules than do condominiums. Co-ops are making a return to popularity as an affordable housing solution. Shared equity investing can reduce ownership and debt costs, and in creative co-ops, members can trade professional skills and services for maintenance and operation to reduce overall building occupancy costs. CUSTOMIZED LOAN PRODUCTS LOCAL AFFORDABLE HOUSING LOANS The Fund needs large pools of inexpensive third -party debt committed on a long-term basis by partnering with local banks and lenders to offer customized loans to households, developers and builders for affordable housing. The borrowing terms would include lower equity requirements, simpler application standards and forms, below market interest rates, and extend loan terms. The custom loan program could offer preferred, first -look status to lenders who compete to offer favorable below market construction financing and mortgages. AFFORDABLE HOUSING LAND PURCHASE LOAN A loan product to finance the purchase of property by for -profit and non-profit builder/developers with a deed restriction guaranteeing a negotiated supply of affordable housing units, subject to obtaining final permits. The loan would be repaid upon the borrower obtaining construction financing for the proposed project. This loan product could 1) introduce tremendous speed into the preservation and development process, utilizing the capabilities of the region's builders and developers to obtain property, 2) allow funds to be recycled for new use within a year or less, and 3) have low risk — in the worst -case scenario the borrower defaults and the City owns a property it can redevelop, sell, or transfer to another party for redevelopment. FEDERAL HOME LOAN AFFORDABLE HOUSING & COMMUNITY INVESTMENT PROGRAM Under the Federal Home Loan Bank Act (FHL Bank Act), each FHL Bank must establish an Affordable Housing Program (AHP), contributing 10 percent of its earnings to its AHP. AHP Funds can be used to finance the purchase, construction, or rehabilitation of owner -occupied housing for households with incomes at 80 percent or less of the area median income, and the purchase, construction, or rehabilitation of rental housing where at least 20 percent of the units are affordable for and occupied by very low-income households (with incomes at 50 percent or less of the area median income). The AHP leverages other types of financing and supports affordable housing for special needs and homeless families, among other groups. AHP funds are offered on a competitive basis to non-profit or for -profit sponsors. FHLBanks also make grants available to their financial institution members, who providethe funds as down payment, closing cost, or counseling assistance to homebuyers, or as rehabilitation assistance to homeowners. Establishment of homeownership set -aside programs is elective for each FHLBank. FHFA's regulation limits the amount of funds that a FHLBank may allocate annually to its set -aside program. PROPERTY TAX ABATEMENTS Although commonplace in many states, property tax abatements offered by municipalities in Florida requires approval by the state legislature. The City needs to explore developing a disciplined property tax abatement program for affordable housing. In the short term, it could explore the possibilities of rebates paid from a housing development fund as an alternative, of other transfers of value in -lieu of abatements. The Community Investment Program offers discounted advances to members, which are priced below standard advance offerings for a wide variety of qualified community development activities, including but not limited to those enhancing access to mortgage credit. Image Source: Fotoluminate LLC/Shutterstock MIAMI AFFORDABLE ••••••• HOUSING MASTER •: •• PLAN: MANAGEMENT • W..I. ••:IMPLEMENTATION To drive this unprecedented scale of affordable housing development in the City, the Master Plan provides for the creation of a Miami Affordable Housing Finance Corporation (the Corporation). The Corporation will be responsible for managing the Affordable Housing Innovation Fund and providing low cost loans, grants, and tax incentives and expert assistance to anyone seeking to develop, acquire or rehabilitate affordable housing in the City of Miami. Under close City oversight, the Corporation will be an independent corporation so that it can operate and grow funding sources quickly and efficiently. The Corporation will focus on financing affordable housing development and rehabilitation, relying on the talent and skills of the area's builders, developers, realtors, managers, owners and non -profits to build and re- build affordable housing in the City. The Corporation's core functions are to: OContinuously pool funding from a wide variety sources, including public funds, private equity, tax credits, philanthropic donations and other resources to build a "capital stack" of financing resources; 0 0 Finance property acquisition, pre -development, development, land banking, property re -purposing and home ownership through loans, grants, guarantees, interest -rate write -downs, down payment assistance and other vehicles to for -profit and non-profit developers, builders and lenders; Coordinate third -party funding to grow and develop local non- profit affordable housing capacity; and 0 Participate as an equity investor in select development and redevelopment projects. Partnering and managing a large network of providers is crucial to the success of the Master Plan. The City will ensure the Corporation prudently manages its financial resources, direct policies, strategies, priorities and provide continuous oversight and adherence to the City's performance standards for the Master Plan. CITY OF MIAMI DEPARTMENT OF HOUSING & COMMUNITY DEVELOPMENT The newly formed Miami Affordable Housing Finance Corporation will work in tandem with the City of Miami Department of Housing & Community Development in providing affordable housing funding assistance to City homeowners, renters and builders. The Department of Housing & Community Development (HUD) coordinates programs funded through federal and state grants to assist Miami's economically disadvantaged residents and neighborhoods The department administers various HUD programs including the Community Development Block Grant (CDBG); Home Investment Partnership (HOME); Emergency Solutions Grant (ESG), and Housing Opportunities for People with AIDS (HOPWA) programs. In recent years, federal allocations to all local and state governments have been deeply affected by federal budget cuts. In 2002, the City of Miami was receiving over $12 million dollars under the CDBG. In Fiscal Year 2017-2018, the City received approximately $4.7 million, a decrease of close to 61% of the allocation of FY2002. In addition to CDBG funds, in FY 2017-2018 the City received $2,554,653 in HOME funds, $11,672,111 in HOPWA funds and $424,243 in ESG funds. Through cooperative partnerships with the public and private sectors, the Department oversees the divisions of Housing and Administrative Services, which are dedicated to giving low-income residents access to the City's economic growth and prosperity. The Department of Housing & Community Development's programs include: pj First -Time Homebuyer Program The City of Miami's First Time Homebuyer Program provides zero percent (0%) deferred loans to first-time homebuyers purchasing a property in the City of Miami if they qualify based on their income category. Eligible Properties include single family residences; townhomes and condominiums. Properties must meet Housing Quality Standards as per HUD requirements. 0 0 0 Eligible buyers must not have owned a home in the past 3 years with household income less than or equal to 80% of the area median income adjusted for family size. Eligible buyers must be able to afford a monthly payment based on income and debt and contribute at least $500 of personal funds towards down payment/closing costs. The maximum sales price is $261,000 for existing homes and $276,000 for new construction. Single -Family Rehabilitation/Replacement (Low -Income) Program Through the Single -Family Rehabilitation/Replacement (Low - Income) Program, the City of Miami provides funding for low- income homeowners for the rehabilitation (including emergency or replacement) of their owner -occupied properties to achieve decent, safe, and sanitary conditions. Homeowners must own their home (single family residence, townhomes, and condominiums only) and be residing in this home to be eligible. Only households with income less than or equal to 80% of the area median income adjusted for family size are eligible. The assessed value must be equal to or less than $300,000. City of Miami Senior Rental Assistance Pilot Program The City of Miami Senior Rental Assistance Pilot Program offers assistance to income -eligible (40% Area Median Income) senior households (ages 62 and up) in the City who spend more than 50% of their household income on housing costs AND who live in City assisted rental housing or subsidized buildings within City of Miami limits. The program provides up to $100 a month towards rental housing assistance at eligible properties, for up to a year, for qualifying households Housing Opportunities for Persons with AIDS (HOPWA) The City of Miami is Local Administrator of HOPWA Funds. Pursuant to federal regulations implementing the AIDS Housing Opportunity Act of 1 990, the City of Miami, as the municipality with the largest population, serves as the grantee for HOPWA funds, on behalf of the Miami -Miami Beach -Kendall, FL Metropolitan Image Source: Greater Miami and The Beaches 0 Division covering Miami -Dade County (Miami -Dade EMD) of the Miami -Fort Lauderdale -Miami Beach, FL Metropolitan Statistical Area (EMSA). The HOPWA Program administered by the City of Miami serves all residents of Miami -Dade County. The City works with all levels of government, service providers, consumers and the private sector in developing resources and services, particularly housing and social services for persons living with HIV/AIDS (PWAs). Local HOPWA funds are directed towards assisting eligible clients with housing designed to prevent homelessness, including emergency short-term rental, mortgage and utility assistance, long-term rental assistance, project -based rental assistance, operating assistance for project -based housing and community residences; and, when funds allow, capital funding for rehabilitation or new construction (new construction limited to single -room occupancy units and community residences). HOPWA funds also are directed towards housing information, referral and advocacy services. Emergency Solutions Grant (ESG) The Emergency Shelter/Solutions Grant program is a formula program that allocates monies to improve the quality and number of emergency homeless shelters and/ or related social services for the homeless. ESG provides a foundation for homeless people to begin moving toward independent living. The current level of funding is based on the yearly homeless assistance appropriation, as well as the demand of HUD's other McKinney-Vento Act programs. The City of Miami does not provide homeless shelters as this is a Miami -Dade County function. The city uses ESG funds to provide outreach services for the homeless. AFFORDABLE HOUSING DEVELOPMENT FOR ALL MIAMI RESIDENTS STREAMLINE ZONING AND PERMIT REVIEW In focus groups conducted for the Master Plan, the builder and development community shared a clear consensus on the need to accelerate the City's reform of its zoning and permit review process. Currently, zoning and building approvals can take up to a year for large and small projects alike, the code is difficult to understand, often requiring dedicated expediters to complete, and relies on too few staffers within City Hall to administer. Extended and complex permitting adds real costs to affordable housing projects and especially hurts small property owners and builders as they do not have the resources to hire dedicated permit expediters. If the Master Plan is to succeed at producing housing at the speed and scale required, immediate changes are needed, including: 0 0 0 0 0 Fast -tracking zoning and permit review for projects containing affordable housing; Review and revise Miami-21 to move as many items as deemed practical and appropriate (those not affecting safety and health) to "as -right," rather than special permit review status; Waiving impact and inspection fees for projects containing affordable housing; Complete the City's move to fully digital zoning and permitting submissions and review; and Increase zoning and permit review staff and creating a new staff unit that is dedicated solely to reviewing projects incorporating affordable housing. SIMPLIFY AND CENTRALIZE ACCESS TO AFFORDABLE HOUSING DEVELOPMENT & FINANCE PROGRAMS In addition to streamlining the application, review and permitting process, access to simplified, centralized information is a crucial element in the success of the Master Plan's affordable housing agenda. The development community, especially mid- and small -size builders and developers spoke clearly on the need to provide easier access to the affordable housing system. Seeking financing, understanding regulations and requirements, and obtaining approvals is currently a highly complicated process involving multiple agencies, governments, City Departments, and funding sources. Microsoft has begun working with the City to develop a centralized affordable housing information portal. Its key functions should include: 1) a central clearinghouse and repository of affordable housing development, construction information, 2) best practices examples from across the US, 3) information sharing and direct contact between developers, architects, builders, and policy makers to share ideas and experience, and 4) a marketplace for businesses and professionals to advertise and procure services. u3t AFFORDABLE HOUSING INVESTMENT TO DRIVE SMALL BUSINESS CREATION AND NEW SKILLED EMPLOYMENT The Miami Affordable Housing Master Plan is currently the State of Florida's largest economic development initiative. The Master Plan will create over 14,000 new jobs and create over $11 billion in total investment. Miami is extremely reliant on the growth and development of small businesses for new job creation, and the Master Plan is a major opportunity to create new businesses, skilled jobs and raise household and family incomes. A portion of the Miami Affordable Housing Innovation Fund will be invested in: 0 0 0 0 A skilled trade contractor education, job training, mentorship, licensing, certification and on -site training program assistance program to expand the pool of local skilled trades contractors. Graduates of the program would receive hiring preference on projects financed by the City; Equipment grants and loans for small women and minority architecture, design, and construction firms; New construction and development business incubators and accelerators. Graduating entrepreneurs will be eligible to compete for construction jobs in City -financed housing projects; Adopting a single, unified Community Benefits Agreement (CBA) that will be applied to development projects receiving benefits, financing or incentives under the City's affordable housing programs. A clear and aggressive CBA should set definitive local hiring standards, cash equivalent provisions, and other benefits from owner -developers. Setting clear standards up front, rather than negotiating on a case -by -case basis, benefits all parties; OStrengthening and expanding incentives and priorities for small, minority, and women -owned businesses in all aspects of the Master Plan; ODeveloping a local hiring information and assistance network to benefit local businesses, ease the local hiring requirements of the CBA, and provide special assistance to small builders and developers who don't have the resources to conduct extensive job searches for contractors; and OPreferred access to the City's affordable housing programs to the employees of business owners who create a minimum of three new full-time jobs that pay salaries above the City median income, especially homeownership programs. Housing support for employees for is a powerful incentive to invest and hire local residents. THE HOUSING TECHNOLOGY CONSTRUCTION INNOVATIONF FUND Reducing the cost of housing construction is a crucial element of affordable housing delivery. However, construction technology has adapted slowly to new techniques and technologies that significantly reduce cost. New construction technologies including modular construction, factory -built construction, new materials, prefabricated building systems, autonomous and robotic machine tools, and advanced materials purchasing, and procurement could offer important solutions to the implementation of the Master Plan. Supporting the development and adoption of new cost -saving construction technologies is a crucial part of the Master Plan. This will be accomplished by fostering innovation and commercialization of new products, materials, and building systems as quickly as possiblethat can be applied tothe Master Plan's implementation. The City will partner with Miami's colleges and universities, the Beacon Council, construction companies and construction trades business councils to quickly develop construction technology accelerators and new technology financing. Building on Miami's growing entrepreneurial ecosystem, and partnering with the area's colleges, universities and the construction industry, a network of accelerators would have immediate and far-reaching economic value. In addition to providing new, more efficient and lower cost solutions for affordable housing, an aggressive commercialization effort could build Miami's construction industry sector into a global leader in advanced, resilient and energy efficient building technologies. DRIVE THE CITY'S CLIMATE CHANGE AGENDA Miami is at the front line of the response to global climate change, with more at stake than any metropolitan area on the planet. The City's investment in affordable housing, in addition to its economic development impacts, represents an opportunity to significantly change the City's resilience capacity, energy consumption and carbon footprint. Miami-21 currently incorporates incentives for green building design. Given the City's climate change risk profile, the Affordable Housing Master Plan is an opportunity for the City to lead on issues of resilient and sustainable development. Rather than incentives, mandatory green energy, resilient and high -efficiency design, and carbon neutral building should be mandatory for structures developed using the City's affordable housing financing. Image Source: Dezeen Magazine 75 TIMETABLE: THE CRITICAL FIRST YEAR The Master Plan lays out an ambitious agenda for change. The Master Plan will require an unprecedented scale of organization and mobilization, demanding careful planning to build the foundation for a sustainable affordable housing institutional and financial structure. • Given the accelerating loss of affordable housing in Miami it would be folly, however, to wait to begin preserving critically needed homes and apartments throughout the City. This Master Plan recommends immediately launching the process to finalize the organization and institutional relationships needed to implement the Master Plan and launch the crucial effort to start preserving as many existing affordable housing units as possible in the first year of implementation. • As such, the Master Plan will launch the Forever Bond Phase II Acquisition and Rehab Finance Program — carving out an additional tranche of $15 Million from the Forever Bond to finance the rehabilitation and/or acquisition of existing owner and rental housing to help preserve, grow and maintain the City's affordable housing supply. Priority properties for this program would include distressed property owners at risk of losing their home, rehab financing and acquisition financing for qualified buyers to purchase and maintain affordable housing units. All properties using the program's financing would be subject to a 30-year affordable pricing deed restriction. Using the Forever Bond funding as equity as recommended within the Plan (see Funding Sources) could leverage as much as $90M to $150M in loan commitments and debt financing, preserving as many as 1,500 affordable units in the Master Plan's first 18 months. Image Source: Bret Boardman MIAMI AFFORDABLE HOUSING PLAN: THE CRITICAL FIRST YEAR SONDJFMAMJJA Finalize and Approve the Affordable Housing Master Plan Finalize and Approve Year 1 District Priorities Finalize and Approve the Structure of the Affordable Housing Investment Bank (AHIB) Finalize and Approve AHIB Governance & By -Laws Complete AHIB Staffing Plan, Start Recruiting Executive Staff Complete & Release Contingent RFP for Lender Commitments Select Phase II Partner Lenders Complete Forever Bond Phase II Underwriting Complete Bond Offering FORE . = OND PHASE II REHAB & ACQUISITION IMPLEMENTA11 Finalize Terms of the Phase II Rehab & Acquisition Program Market the Forever Bond Affordable Rehab & Acquisition Program Launch the Rehab & Acquisition Program Application Intake and Close Contracts PERFORMANCE MANAGEMENT The City of Miami Affordable Housing Master Plan will require professional management with the organizational support and capacity to effectively implement the plan upon adoption for the full 10-year duration. The performance management system will operate within the framework of the Municipal Scorecard for Affordable Housing Delivery© (MS -AHD) Model. The MS -AHD model was devised by the FIU Metropolitan Center to provide a systematic and comprehensive approach toward policy development, implementation and performance evaluation of affordable housing initiatives at the local level. The expectation is that for local governments to address the urgency, complexities and long-term commitment to affordable housing issues, there needs to be a systematic, comprehensive and performance - based approach in place. The MS-AHD's approach is linked to a set of objectives (processes) and measures to evaluate performance (outcomes). The initial application of the model identifies and maps the lead indicators (processes) and guideposts to determine the extent to which the City of Miami has successfully adopted systematic and comprehensive approaches and solutions to implement the Affordable Housing Master Plan. The identification and mapping of lead indicators that serve as the "drivers" of performance is the critical first step in performance evaluation as lead indicators are predictive in nature. The next step in the implementation of the model is the incorporation of "lag indicators" which focus on "results" at the end of a specified time periods. While the aforementioned lead indicators identify the "how" and "why" of City performance in terms of affordable housing delivery, lag indicators will quantify the actual number of affordable housing units produced or preserved as a result of implementing the performance model. The MS -AHD model consists of four (4) interrelated and mutually supportive affordable housing delivery "process criteria." The four processes provide the basis of a systematic and comprehensive affordable housing delivery system. Together these processes provide the essential policy skills and leadership, management commitment, dedicated funding and on -going institutional capacity -building to enable the successful development and implementation of the Affordable Housing Master Plan. POLICY AND MANAGEMENT PROCESS Organizational and professional management capacity are important requisitesfortheeffective planning and implementation oftheCity'sAffordable Housing Master Plan as effective policy and professional management are inseparable in an effective affordable housing delivery system. Clear policy direction will include a commitment to professional management capacity and resources. This will require a commitment by the City of the necessary resources to the Office of Housing and Community Development and the proposed Miami Affordable Housing Finance Corporation as the primary managers of the Affordable Housing Master Plan. PLANNING AND LAND USE PROCESS Effective planning and land use will need to augment the implementation of the Affordable Housing Master Plan. Planning will inform policy and recommend appropriate land use changes to promote affordable housing development opportunities. The MS -AHD model will determine the extent to which planning is a vehicle for informing affordable housing policy decisions and a means for implementing affordable policy strategies. An effective planning and land use process for affordable housing delivery will also integrate affordable housing with related planning initiatives involving economic development, transportation and capital improvements. DEDICATED FUNDING PROCESS The MS -AHD model includes a process for developing and sustaining a local, dedicated funding source for affordable housing. Affordable housing policies and strategies must be supported by a long-term dedicated funding stream. A local dedicated funding source shows government commitment and an assurance that planned affordable housing opportunities are realized. The proposed "Affordable Housing Innovation Fund" will provide the necessary capital growth mechanism and dedicated funding source to advance the implementation of the City of Miami Affordable Housing Master. INSTITUTION BUILDING PROCESS Institution building is seen as an important long-term process for addressing the City's affordable housing needs. Sustainable affordable housing policies and strategies will include on -going institutional capacity -building among City government, business and industry, philanthropy and community -based organization (CBOs). An institution building process for the City's Affordable Housing Master Plan will include development, investment and leveraging of the proposed "Affordable Housing Innovation Fund" during the 10-year duration of the plan and beyond. Image Source: Getty Images INSTITUTION BUILDING POLICY & MANAGEMENT THE MUNICIPAL SCORECARD FOR AFFORDABLE HOUSING DELIVERY DEDICATED FUNDING PLANNING & LAND USE SUBSTITUTED. TOBE SUB ITUTED [MASTER PLAN]