The Real Deal Miami

Property taxes drive efforts to upzone neighborhoods for new condo towers

Peter Zalewski tackles reader questions and opinions about the SoFla market

October 03, 2014 09:45AM
By Peter Zalewski

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Peter Zalewski

Peter Zalewski

Question: Municipalities like Bay Harbor Islands and Boca Raton are considering raising building size limits for residential towers. Are these municipalities simply reacting to a hot residential development market at the expense of long-term zoning and land-use governance? Will other municipalities follow suit?

A drive along State Road A1A in South Florida clearly shows that every municipality along the coast has a different perspective about what constitutes an acceptable height and density for residential towers in each of their respective communities.

The contrasts can often be startling in areas like Northeast Miami-Dade County, where Sunny Isles Beach developers are building towers more than 40 stories tall immediately south of single-family houses and mansions fronting the Atlantic Ocean in Golden Beach.

The increasing talk of upzoning various neighborhoods in South Florida suggests that many municipalities appear to realize – due in large part to the last condo boom-and-bust cycle – that property taxes generated from residential real estate are a crucial source of revenue needed to keep the coffers full in order to pay for city employees, services and pensions.

With the painful budget cuts caused by the Great Recession still on the minds of elected officials and residents, an increasing number of municipalities, including Bay Harbor Islands, Boca Raton and North Miami Beach, are reviewing their current zoning policies in hopes of making revisions to attract more investment dollars for new residential developments during this real estate cycle.

The reality is, the steps being taken today by various municipalities are more likely to shape the next South Florida real estate cycle than the one underway with more than 280 new condo towers totaling nearly 38,500 units already announced, according to the preconstruction condo projects website CraneSpotters.com.

(For disclosure purposes, my firm operates the website.)

The unanswered question going forward is whether today’s willingness by elected officials and residents to welcome high-rise residential towers into their neighborhoods will still exist in the future if the city coffers are full.

Thought Of The Week: Developers Try To Drive Condo Presales With Incentives

As the competition intensifies in the Greater Downtown Miami preconstruction condo market, some developers are beginning to offer unique incentives to drive sales with those buyers and brokers who want to make deals for presale units.

Besides offering the usual incentives of maintenance fee credits for buyers and cash bonuses for brokers, some projects are taking the giveaway approach a step further by focusing on every South Floridian’s need for wheels.

Beginning this month, the planned 39-story Centro condominium with 352 units in the Central Business District of Greater Downtown Miami is offering buyers the free use of vehicles in the Car2Go fleet for up to a year.

For anyone unfamiliar with Car2Go, the system uses state-of-the-art technology that charges members by the minute to drive fleet vehicles that can be picked up and dropped off at any location within designated boundaries.

Buyers who purchase units in the Centro condo tower, which will not offer residents parking once constructed, during October will be granted 1,000 minutes of monthly drive time – or a total of 12,000 minutes for a year – with Car2Go.

As of Thursday, Car2Go charges a state fee of 41 cents per minute to members to drive its vehicles with no “running fixed costs or deposits, parking charges, fuel costs, or recurring annual fees,” according to the company’s website.

If two wheels are preferable, the LeParc At Brickell condo tower under construction in the Brickell Avenue Area of Greater Downtown Miami is offering brokers a chance to win a free Vespa motor scooter.

The retail price of a 2014 Vespa starts at about $3,400, according to Motorcycle.com

Real estate brokers who can sell at least four units by Dec. 15 in the planned 12-story, 128-unit Le Parc At Brickell project will have their names entered into a “drawing” to win a trendy Italian scooter, according to marketing literature.

Peter Zalewski is a real estate market consultant, non-practicing licensed real estate broker and columnist for The Real Deal who now answers reader questions about the South Florida real estate market in a new weekly Friday column. Questions and comments can be sent to southfloridanews@therealdeal.com. The TRD editors will choose which submissions will be addressed.

  • Glenn E. Gromann

    Boca Raton already has tall buildings which date back to the 1970’s. With berms an elevations they are over 200′ The Boca Resort (300′) is right next to the premier Royal Palm SFR area and the consensus is that if nothing more the value and p.s.f. pricing of such buildings and Ocean condo’s has helped INCREASE the value single family homes. Expect 10-15% appreciation for any home near Downtown in the next 3-5 years. Case in point was One Thousand Ocean a luxury low rise that in the depth of the recession was pulling in $1000+ p.s.f. buyers. Further the 33486 zip code which includes modest SFR near Town Center area just broke into the top 25 in per capital home values in South Florida being right on top of Tall Class “A” office space. With zero new inventory in the past 7 years and extremely limited redevelopment land available Downtown, coupled with low taxes and top City services Boca is the best kept secret in South Florida for stable sales volume. Expect instant sellout of the Tower 155 project near Mizner Park. There is a mini condo boom coming to Boca with boutique pricing, the multi-family run is about over but provides an excellent feeder system for purchasers. Slightly taller buildings (and the ability to build the same has been on the books for 7+ years) provide views and hurt no one. This is one area where places like Delray Beach cannot compete.

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