Marcia Fudge, U.S. Secretary for Housing and Urban Development, swooped into Miami on Tuesday, and declared the city ground zero of the nation’s housing crisis. Local residential real estate experts somewhat agreed.
“I decided I was going to Miami, to the epicenter of the housing crisis in this country,” Fudge said during a tour of Related Group’s Liberty Square redevelopment project in Liberty City, according to the Miami Herald.
Some recent data backs up Fudge’s assertion. The city led the country in rent hikes, with Miami renters paying 45.8 percent more in May compared to the same month last year, a report from Realtor.com showed. It’s a trend that’s turned Miami into the most rent-burdened city in America at a time when rents across the U.S. have surged by double digits, year-over-year, Realtor.com found.
Victor Ballestas, a principal with Miami-based developer Integra Investments, said his firm is planning to focus more on affordable housing projects in the future because of demand. “There does appear to be a massive need,” he said. “We have been one of the markets where pricing has gone up a lot. I can see where [Fudge’s] comment is coming from.”
Integra and its partner, Elderly Housing Development & Operations Corporation, recently completed Mosaico, a 271-unit elderly affordable housing apartment building in Miami’s Allapattah neighborhood. Integra also recently broke ground on Wrecker’s Cay Apartments, a 280-unit affordable and workforce housing rental project in Key West.
“The problem is that, along with inflation and everything else, land prices have gotten crazy and construction costs have gotten crazy,” Ballestas said. “It becomes harder for developers to deliver workforce housing because those issues have gotten worse.”
One solution involves elected officials in the city of Miami and Miami-Dade County changing the zoning on city and county-owned sites that can be redeveloped into affordable and workforce housing, Ballestas said.
Christina Pappas, vice president of The Keyes Companies and current president of the Florida Realtors Association, said Fudge’s statement was not entirely off the mark. “The entire country is seeing the highest level of inflation,” Pappas said. “Due to our population growth and the growth of out-of-state companies relocating here, I do believe we are seeing it more so here than in any other locations.”
Zoning is key to dealing with the crisis, she said. The real estate industry has to push local governments to consider zoning changes that would allow developers to build at a higher density that would make affordable housing and workforce housing units feasible.
“It’s not just about funding projects and giving developers incentives,” Pappas said. “It should also involve planning and zoning on how we are allowed to do affordable housing.”
[The Miami Herald] — Francisco Alvarado