A CRISIS BUILDS

Miami-Dade's housing crunch

Low wages, combined with the ever-rising cost of housing, have spawned a massive affordable-housing crisis in Miami-Dade County. Consider:

• From 2000 to 2004, prices for new homes and condominiums increased by 30 percent. The cost of used homes grew more than 70 percent. The costs place Miami---Dade among the top 100 most expen- sive homeownership mar- kets in the nation.

• Incomes not keeping pace. Average wages in Miami-Dade rose just 6.1 percent between 2000 and 2004, one of the lower growth rates in the state. Meanwhile, the county ranks next to last in job creation.

• A first-time homebuyer now needs an income of $109,560 to buy a medi- an-pricesd single-family home in Miami-Dade County. In 2004, 90 per- cent of households were not earning that much money. According to fed- eral affordability guide- lines, a full-time elemen- tary school teacher in Miami-Dade County can afford only a two-bed- room apartment.

• The market is even tighter for low-income earners, who make up about 45 percent of Miami-Dade families. A resident earning minimum wage in 2004, or $6.15 an hour, could afford a monthly rent of no more than $320. A two-bed- room, however, costs an average of $929 a month.

SOURCE: Miami-Dade County Manager's Office.

Dollars flow

In 1983, Miami-Dade County became the first in Florida to pledge lucrative construction loans to developers willing to build homes for the poor. More than two decades later, the surtax program, fueled by taxes generated from commercial property sales, has become one of the most widely used affordable-housing subsidies in the county.

Combined with money from the state, the program is flush with cash.

But it's riddled with construction delays, dead projects and questionable spending -- even while thousands of families search for an affordable place to live.

Money Trail

The Miami Herald spent seven months investigating the Miami-Dade Housing Agency, responsible for overseeing building projects in a community with the nation's greatest need for affordable housing.

From the start, The Miami Herald found that even as the agency cut checks for millions of dollars, it struggled to track the flow of money to its own housing projects.

The Housing Agency's computer programs are unreliable, and its paper files often have been destroyed. Tracking reports are inconsistent, with projects and money disappearing from one report to the next.

Using original contracts, construction correspondence, corporate records and other documents, the newspaper built a database that tracked every new construction project funded by the agency between 2003 and 2005. The newspaper pieced together the life of more than 70 projects and the track record of the developers who promised them.

The Miami Herald studied, among other things, contract extensions, construction draws, and project completion dates.

The newspaper tracked down the buyers, too, only to find that in more than a dozen cases, affordable homes were sold to real estate investors, wealthy buyers or families who reaped a quick profit.

The newspaper studied only projects that produced new housing, eliminating rehabilitation projects. The newspaper looked only at allocations made from local and state funds, which the Housing Agency controls.

Included were projects originally funded through the Housing Agency with a federal loan -- the Housing Agency later paid back the loan with local dollars on behalf of the developers.

Some affordable housing projects also receive money from the county's Office of Community and Economic Development, among other places; those allocations were not included in The Miami Herald's study.

The newspaper reviewed hundreds of construction reports, internal e-mails, property records, lawsuits, invoices, contracts and budgets to analyze every major building project at the Housing Agency in recent years.

Reporters visited dozens of vacant lots and interviewed families from Little Havana to Liberty City to Opa-locka.