While Miami’s residential market is just beginning to emerge from a construction standstill caused by the condominium bust, the city’s affordable housing sector has seen a relative boom. The sea of foreclosures in Miami has actually been a positive for affordable housing developers, who have been able to scoop up blighted or distressed properties and restore them into functioning housing, sometimes with government funds like the Neighborhood Stabilization Program, according to Stephanie Berman, the director of non-profit developer Carrfour Supportive Housing. The Real Deal talked to Berman about the state of affordable housing in Miami, green affordable housing and her organization’s recent $5.6 million purchase of North Miami Beach’s Harvard House distressed complex.
What is the climate right now for affordable housing in Miami?
I think we’re seeing a kind of stabilization of the market. There’s been a lot of construction of affordable housing in Miami over the past year-and-a-half, two years. We’re seeing all of these projects near completion now, and [the city has] a large number of affordable housing developments coming online in South Florida.
What’s driving all of the growth in the affordable market, when residential development largely has been at a standstill?
I think end users have always been there, and there’s always been a need. What we’ve seen in the last few years is that some of the tax credit projects that were stalled during the downturn in the economy — when there weren’t investors to purchase the tax credits — have gotten stimulus funding. We got [$17 million in] stimulus funding on one of our tax credit projects and because of stimulus funding, we’re able to continue it and start construction.
Which project is that?
We have a project in Liberty City, which is one of Miami’s communities that is in the most need of affordable housing. It’s a project we had been working on for several years, and had been awarded tax credits, and because of the economy, we couldn’t find an investor to purchase the tax credits. We were in the same boat as a lot of other tax credit projects. The federal government created a program where, instead of having to find an investor, they gave us stimulus money.
How much money remains of the $17 million grant — and how do you plan to spend it?
The cost of Harvard House was $5.6 million. It’s fully funded. It’s part of what’s called Neighborhood Stabilization Program funding, although it gives us some tight time constraints. We need to spend half of the funding we receive by February 2012, and we need to spend all of it by 2013.
What’s the plan for the rest?
We still have an allocation of 240 units that we’re going to rehab. Harvard House is 56 of those units, and we have another project that we’re working on that’s 100 units.
What’s that project?
It’s called Tequesta Knoll [in southern Miami-Dade]. It’s also going to be a rehabilitated project.
Another developer, Carlisle, has been building a series of green and LEED affordable projects in South Florida. Does green have an impact on the financial bottom line of a project?
It does — and actually, the Neighborhood Stabilization funding has some green requirements that we need to follow, so all of our [Neighborhood Stabilization Program] units will have many green features.
Harvard House is a distressed property and you mentioned rehabilitation. Is the impact on affordable housing a kind of silver lining to the massive foreclosure inventory?
Well the [Neighborhood Stabilization Program] funding — that’s the purpose of it — to turn around neighborhoods that were becoming a problem for the community. The purpose is to go in and purchase properties and foreclosures and in default and rent them out.
What are the biggest challenges to developing affordable housing at this point?
Finding the appropriate site is always a challenge. And I think we’re a little different than your typical development because we’re a non-profit. We always have a hard time competing with the for-profit developers. We’re competing with them for the same [money] pot, but we really don’t have the same resources to put in as many applications into the lottery.