A new collaborative of local, state and national nonprofit institutions has unveiled an ambitious plan aimed at creating and preserving affordable housing along the rail path throughout Miami-Dade, Broward and Palm Beach counties.
The plan, titled “South Florida’s Housing Link Collaborative,” will use a three-year, $5 million investment by JPMorgan Chase & Co. to seed newly constructed rentals and upgrade existing units.
The $5 million investment is projected to leverage as much as $75 million of external capital from investors, lenders and government sources. Those may include the City of Miami’s $400 million Miami Forever resiliency bond, which has earmarked $100 million specifically towards housing, or the Miami-Dade County Affordable Housing Surtax.
The funds will be used to build 150 new affordable rental units and renovate another 150 existing affordable units. The money will also be used to buy vacant or underutilized land along the railway line. Also, 200 improvement loans will be granted to existing homeowners to upgrade their residences for energy efficiency and resiliency.
All of the new and renovated construction will feature climate-resistant design and materials.
The timeline for the plan allows for three years for land acquisition, with new construction completed in four to five years.
All will be located near current or future stations for Brightline express service, also known as Virgin Trains, and commuter Tri-Rail on the existing tracks owned by Florida East Coast Railway, which is built on some of the highest ground in South Florida.
The collaborative is a joint venture between the Broward-based South Florida Community Land Trust (SFCLT), the Community Land Trust of Palm Beach (CLTPBC), the Solar Energy Loan Fund (SELF), based in St. Lucie County; the national Enterprise Community Partners; and the state nonprofit Florida Community Loan Fund.
There are three criteria for any property or older buildings to qualify for the plan:
▪ A half-mile proximity to existing and future Brightline and Tri-Rail stations along the FEC, which would qualify the acquisition for transit-oriented development density and mixed-use bonuses;
▪ Proximity to Opportunity Zones, which are census-designated tracts designed to entice investors and developers with tax-gain deferrals to build in economically challenged areas;
▪ Proximity to Community Redevelopment Areas (CRA), or neighborhoods deemed by local government to be in dire need of adequate affordable housing and infrastructure improvements (water, plumbing, electricity).
Mandy Bartle, executive director of the SFCLT, said the group decided to focus on land and buildings along the rail because during more than a year of community outreach meetings, access to transit surfaced as the single biggest need of low-income households.
“Transport is the biggest expense after housing,” she said. “We decided to hone in on this corridor because the people who most need public transit are a lot of the folks who already live in these areas near the railway and are the most likely to get pushed out by gentrification.”
Bartle said the group used a study commissioned by the South Florida Regional Transit Authority to zero in on 27 proposed stops along the rail where its investment would have the biggest impact. The targeted locations are subject to change, depending on decisions by Virgin Trains or Miami-Dade County about future train stops.
A community land trust buys vacant land and retains ownership in perpetuity. Single-family homes or rental apartments built on the land can be sold or leased at prices lower than market-rate, because builders don’t have to factor in the added cost of the land purchase.
Home buyers in these areas pay lower deposits and monthly mortgage bills. When they decide to sell, they retain the equity generated by the price they initially paid. But the home returns to the market at an affordable price, because the value of the land itself is not a factor.
Another critical factor in this new plan: All the housing will be built or restored to be climate-change proof.
The Solar Energy Loan Fund (SELF), the St. Lucie-based community lender focused on sustainable home improvement, will administer the $5 million fund from JPMorgan.
SELF will also give out 200 loans to homeowners in the area looking to replace their roofs and air conditioners or even add solar to their homes.
The business model, explains SELF’s Chief Strategic and Financial Officer Duanne Andrade, is to offer loans to low and moderate-income people for upgrades like hurricane-resistant roofs, solar panels or efficient air-conditioning systems.
“Those are all expensive items that typically working-class people couldn’t afford easily,” she said. “It’s not fair for only the wealthy to be able to access those home improvements that would serve the low income the most and the best.”
Such improvements require a big upfront investment, but they save homeowners money over time in the form of lower electricity bills and cheaper home insurance.
The key to accessing these technologies, Andrade said, is affordable financing. Higher-income people can pay with cash or get a loan from a bank — an option often unavailable to those with lower income.
“Because they may not have great credit scores or high incomes, they’re going to be hit with high-interest rates,” she said. “Low-income populations pay much more, proportionally speaking, for housing costs and operating costs for their homes.”
Her organization fills the gap between banks and predatory lenders by lending to low and moderate-income homeowners and structuring the loan around what they can afford to pay.
Andrade said she’s “super proud” of her company’s 98.8 percent repayment rate. Since SELF started in 2010, it has loaned a total of $10 million to 1,300 people. The average loan is around $8,000, with an interest rate between 5% and 9%.
“The South Florida market is, first of all, probably the most vulnerable market, especially for moderate and low-income communities, for climate risks,” she said. “We know there is a huge need.”
Miami is one of the most vulnerable cities in the world to the impacts of climate change, and the highest elevation land is already being valued higher than low elevation land, studies have shown. As a result of racist redlining policies that helped shape the city’s neighborhoods decades ago, those high elevation communities in Miami are often historically black or Hispanic.
The location of those flood-proof areas, such as Little Haiti, has kicked off a fierce debate about climate gentrification, which activists say is why investors choose low-income neighborhoods for big developments. Developers say they choose these areas because of their proximity to other urban areas and plead a case of regular gentrification.
Either way, low and moderate-income homeowners are being priced out of the areas targeted by the JPMorgan Chase grant.
“The affordability of housing throughout our country is a huge problem,” said Mel Martinez, chairman of the Southeast U.S. and Latin America for JPMorgan Chase and former Florida senator and Secretary of Housing and Urban Development. “It’s particularly acute in certain parts of Florida because our economy is dependent on tourism, but that industry creates jobs that don’t keep up with the cost of living.”
Maria Escorcia, program officer for the JPMorgan Chase Foundation in Florida, said the banking giant allocates $350 million annually to promote neighborhood revitalization and small business expansion around the world.
“The other thing we are trying to tackle through this program is the impact of climate and what that does to the stock of housing that is available in Miami,” she said. “It has to be affordable to get in, but it also needs to be sustainable over time. Climate-related issues can be a setback to a family back trying to do repairs and keep their housing up to code. That’s particularly true in South Florida.”