UPDATED, Oct. 30, 1:30 p.m.: Areas near the Virgin Trains USA stations in Overtown and Fort Lauderdale could see a wave of new affordable housing.
JPMorgan Chase announced on Wednesday it plans to invest $5 million to develop affordable housing in South Florida in areas near the Florida East Coast Railway transit stations and in Opportunity Zones. The total investment is expected to generate $75 million in affordable and resilient housing investments, according to the financial institution.
The bank announced the investment at a press conference in Overtown. It’s part of JPMorgan’s $125 million, five-year national commitment to neighborhood revitalization.
“We have major challenges in Miami-Dade County, one of the least affordable places in the nation,” said Miami-Dade County Commissioner Daniella Levine Cava at the press conference. “Because of the investment made today… we are going to be more resilient, more sustainable, more affordable.”
The funds will be directed through the South Florida Housing Link Collaborative to build 150 new permanently affordable rental units. The investment will also be used to acquire and renovate 150 existing affordable rental units and provide 200 energy and resiliency home improvement loans.
South Florida consistently ranks as one of the least affordable places to live. Nearly 60 percent of employed adults in South Florida are spending more than 30 percent of their income on rent, according to the South Florida Housing Link Collaborative. South Florida was one of seven U.S. communities selected out of 75 applications from 49 U.S. cities.
As part of the process, JPMorgan looked at access to transit, proximity to Opportunity Zones and Community Reinvestment Areas along the FEC rail line in Miami-Dade, Broward and Palm Beach counties.
It created a ranking of locations where the investment will be likely directed. The Miami Government Center and Overtown area, Fort Lauderdale and Hollywood, were ranked in the highest tier. Delray Beach, North Miami Beach, and Dania Beach were in the second tier. The projects will be owned by South Florida Community Land Trust or the Community Land Trust of Palm Beach County.
Virgin Trains USA, formerly known as Brightline, runs on the FEC rail line and stations in Miami, Fort Lauderdale and West Palm Beach. The company has built a number of commercial and residential buildings at its stations, which has spurred nearby investment from other developers. MiamiCentral opened last year, and includes the office buildings 2 MiamiCentral and 3 MiamiCentral, and an apartment component that’s under construction.
The Miami station is in a federally designated Opportunity Zone. The Opportunity Zones program gives investors and developers a tax incentive if they develop or invest in one of the 8,700 distressed areas throughout the country. The program has come under scrutiny, however, since it does not require developers to build affordable housing and has been seen as a tax break for the wealthy.
Developers in South Florida have also struggled to deploy capital into the Opportunity Zones due to delays from the U.S. Treasury and the IRS on the program’s rules. Land costs in some Opportunity Zones in the tri-county have skyrocketed, which has added to the complexities of building zones, according to industry experts.
As a way to incentivize affordable housing development in Opportunity Zones, Housing and Urban Development Sec. Ben Carson told The Real Deal earlier this year that the agency will give preference to developers who build affordable housing in Opportunity Zones through certain grants.
South Florida’s need for affordable housing comes at a time when some affordable housing developers have been accused of violating or defrauding a federal low-income housing program known as LIHTC. In one case, former low-income housing developer Michael Cox of Miami-based Biscayne Housing Group was sentenced in 2016 for his role in a $36 million affordable scheme.