Entire block of Coral Gables affordable apartments will be razed for luxury condos
Just three years ago, Lizette Gruma was forced out of her longtime home, a modest garden apartment building in the heart of tony Coral Gables that was torn down to make way for a swank high-rise where the cheap condominium units fetch $2 million.
That time, she got lucky. Gruma, who works in a legal office, found a one-bedroom place at a rent she could afford on a quiet, pleasant block of older duplexes and small apartment buildings just a half mile south, by the Gables Youth Center recreational complex. Gruma, 58, a member of the suburban city’s hidden low-wage workforce, walks to work in nearby downtown Coral Gables because she and her partner, Tito Plua, don’t own a car.
Now it’s happening to her again. A developer of luxury townhomes, MG Developer, is buying the entire block just west of downtown and plans to raze all 13 buildings on it. Taking its place: Gables Village, a $50 million development where condos are sure to go for substantially more than $1 million.
That means 52 affordable, centrally located and critically needed rental apartments will disappear at a bulldozer’s stroke. Dozens of working families, including children and elderly people, will be cast out of their homes amid a housing crisis so severe neighboring Miami’s usually fractious city commission unanimously declared a public emergency in late March.
For residents on this Gables’ block, a tight-knit community of neighbors who share barbecues and look after one another’s children and pets, the prospect is worrisome, even frightening. They know rents have been climbing into the stratosphere and the supply of apartments they can afford is shrinking fast — across Miami-Dade County. Those who have begun looking for a new place say they’ve found nothing even remotely comparable in terms of price or safety in surrounding areas, much less in Coral Gables.
“I love it. I love the city. I love the schools. I just love the area,” said Alina, a paralegal who has lived on the block for nine years and in the Gables for 30, always as a renter because she could not afford to buy. Alina asked that her last name not be published because she’s afraid of repercussions from speaking out.
“I’m very concerned,” she said. “In Coral Gables, even in its older garden apartments, the rents went up like crazy. I’m walking around blocks and blocks, trying to find something. As I’m seeing it right now, and I don’t want to be too negative, but it’s impossible.”
Gruma’s home sits amid one of the last remaining islands of affordability outside of the city’s North Ponce apartment district, which flanks Ponce de Leon Boulevard north of downtown. Her block, 2.6 acres in total, is bordered by Malaga Avenue and Santander Avenue on the north and south, and Segovia Street and Hernando Street on the west and east.
It’s part of a small district of about four large city blocks still largely occupied by affordable, well-kept apartments, but luxury townhomes already have made inroads. On a strip of rowhouses facing the Youth Center, the resale asking price for one of the condos is $2.2 million.
Gruma, Alina and their neighbors pay rents that range from $1,300 for a one-bedroom apartment to about $1,750 for a two-bedroom. And while advocates say that’s in the high range of what’s considered to be affordable workforce housing in Miami-Dade, it’s well below average rents in the Gables.
Older apartments dwindle in rich haven
In spite of Coral Gables’ well-deserved reputation as a haven for the rich and the super-rich, the city of about 50,000 people has long been home to hundreds of older apartment buildings. They were built mostly after World War II, and command lower-than-prevailing rents because of their age and typically small units. They provide quality housing thanks to the Gables’ famously strict code enforcement.
Those apartments are gradually disappearing, as they’re targeted by real-estate speculators and developers catering to an unrelenting demand for luxury condos and apartments. The trend is pushing out many longtime, middle-class and lower-income Gables residents — proof that no place is safe from gentrification in Greater Miami’s overheated, highly unequal real estate market.
The plight of Gruma and her neighbors also underscores an absence of safeguards and rights for renters under local and state laws, as well as a lack of policies that protect or encourage preservation and rehabilitation of already existing affordable housing — or what advocates call “naturally occurring” affordable housing.
Miami-Dade faces a shortage of 120,000 rental apartments affordable to people making low wages, according to Miami Homes for All, an advocacy and research group. Government housing policies largely focus on construction of costly and complex new building projects that require millions in public subsidies, or that depend on persuading developers to incorporate a limited number of units for low- and middle-income people, in exchange for zoning breaks. Yet production falls short of meeting the need, the group says.
Some leading local housing advocates have long urged incentives such as tax breaks to encourage preservation of “naturally existing” affordable homes, but no local government in the region has fully embraced that tack.
As a consequence, many tenants are left to the often brutal forces of a private development market increasingly geared to luxury housing, in part due to an influx of foreign capital and technology and hedge-fund fortunes from New York and elsewhere.
Even in this environment, the impending demolition of Gruma’s block in the Gables is unusual in its size, scope and impact — and in the city’s hands-off attitude toward the fate of the people who will be displaced.
Interviews with residents, many of them immigrants, reveal a wide range of occupations and backgrounds. There are: office workers and paralegals; a warehouse worker; a beauty salon stylist; a real estate agent catering to working-class families; even a young lawyer trying to launch a legal career while paying off student loans. There are also students who attend Coral Gables public schools — and who might have to change schools if their parents have no choice but to move away.
In recent years, the city has seen construction of hundreds of rental apartments in and around its downtown and in its old, rezoned industrial district. But living in them doesn’t come cheap. According to zumper.com, the average rent for a one-bedroom Coral Gables apartment is now $2,225, a 36% increase from last year.
The rental market is so tight that finding any apartments for rent in the Gables or the immediate vicinity for less is difficult. Online apartment rental sites list only a handful of options, and a drive through several blocks in the North Ponce district finds nary a “for rent” sign.
The affordability picture is no better across the rest of the county.
In a new report, Realtor.com said home rents in the Miami metropolitan area had climbed more than 55% year-over-year as of February, the biggest spike for any U.S. city. Given its relatively low median household income, Miami now ranks as the least affordable region in the country, the report said. One major driver of higher rents, the report concluded, is “an increasing proportion of luxury rental properties.”
Timing of developer’s wrecking ball unclear
In interviews, Gruma, Alina and more than a dozen other residents complained they have received little to no definitive information — including when they will need to move out — from the current landlords, an overlapping group of partners who gradually acquired virtually all the lots on the block over decades. One principal owner, Ernesto Fabre, said he extended leases for six months, through summer and fall, with no increase in rent. But it will be up to MG Developer to decide when residents must be out. MG officials say they expect to close on the purchase of the properties within days and then will make a decision.
The residents also say no one representing the city of Coral Gables has reached out to them, either with guidance or offers of assistance of any kind.
In two public hearings last year, city commissioners voted unanimously to approve the Gables Village plan, lavishing praise on the planned development’s high Mediterranean-style architectural quality, but making not a single mention of the current residents living on the block. When an activist, preservationist Karelia Carbonell, raised concerns at one hearing over the city’s continuing loss of affordable housing and its workforce, commissioners brushed her off, citing property owners’ rights and the improvements the new condo project would bring to the neighborhood.
Gruma said she can’t understand the indifference to the plight of residents like herself, or the lack of discussion over any measures to control rents, preserve affordable housing, protect renters or render basic orientation or assistance.
“Here are 50-some families that will be displaced. It’s getting out of control,” she said on a recent early evening as she sat on her stoop with Plua and their gray, friendly cat. “I don’t understand the government. Why isn’t there a cap? The rents are ridiculous. But they don’t care. At the end of the day, they don’t care about the families here. I think there’s too much greed.”
Another resident of the block, arriving from downtown Coral Gables on a Freebee shuttle, was equally caustic. Elizabeth, an older woman who declined to give her last name because of fear of repercussions, said she and her husband don’t know where they’ll end up.
“We are very disappointed,” she said. “They are kicking us out. It’s very worrisome for us. But it’s money that counts.”
Carlos Mejia, out for a stroll and a smoke, was scrolling apartment rental listings on his phone when approached by a reporter. It wasn’t looking good. He’s a real estate agent, specializing in working-class buyers, and he was having trouble finding anything for him and his partner, Antonia Rosa Canuto, who has lived on the block for seven years, and their big terrier, Oreo.
Mejia said he and Canuto were able to get a lease extension for six months, until July. They don’t know if they’ll be allowed to stay even that long. But they do know not to expect any help from owners, developers, or the city, Mejia said.
“They’re not going to give us anything, and we don’t know where we’re going to. The prices are crazy,” Mejia said in an interview in the couple’s apartment, which boasts oak wood floors and has been beautifully decorated by Canuto.
For people like them who don’t have high incomes, he said, the choice is increasingly stark: “Either we produce more, or we have to go. In five, six years, the middle class will disappear from this place. This is a little time bomb. It will touch everyone.”
Canuto, who works in a salon in Key Biscayne, added plaintively in Portuguese-accented Spanish: “What can we do? It’s absurd. I like it here. It’s close to everything.”
’Where are the worker bees going to go?’
Bob Barth has lived with his wife in a one-bedroom apartment on the block since September 2018. Barth, 72, who works in a Little Haiti warehouse, said if they’re forced out, he and his wife probably can’t afford to stay in Miami, where their adult daughter lives.
“I’ll probably have to leave Miami. That’s it. I understand why the owners have sold. In their shoes, I would have done the same. It’s a business proposition. Oh, well,” Barth said.
“But I feel so terribly sorry for all these people here. They’re the worker bees. You’re basically displacing the worker bees. Where are the worker bees going to go?”
That’s a question city leaders appear unwilling or unprepared to consider.
Coral Gables has no policies or programs on preservation or development of affordable housing, and no specific protections for renters. The Florida Legislature has essentially barred enactment of local rent controls or requirements that real estate developers include affordable housing in projects without compensation.
In interviews, two commissioners who responded to a reporter’s queries restated positions outlined during the Gables Village hearings: The city should not intervene in private enterprise or the housing market to mitigate loss of affordable housing or assist renters.
Commissioner Rhonda Anderson said no affected tenants had reached out to her, and noted none attended the hearings. She scoffed at claims from residents that they had not been told what’s happening, saying that signs advertising the Gables Village hearings were posted around the entire block. She also suggested tenants are not the city’s responsibility, and that any attempts to enhance their rights — such as rent controls — would run into preemption by an unsympathetic state Legislature.
“Not a single one has contacted me to say they are having a problem,” Anderson said of the tenants. “We can’t create what doesn’t exist. Call your state legislators.”
Gables leaders: tenants no guarantees
Commissioner Michael Mena said all tenants should understand that they have no guarantees and few rights once their leases run out.
“These are private contracts they negotiated,” Mena said. “To pick one project, which is private property, and suggest that the city should get involved in a private matter, I don’t believe in that.
“There are a lot of apartment buildings still of this age and style in the city, whether there is something available to them at the same price or not. Private property rights are fundamental to a free society. And it’s not government’s province to come into a private relationship between a landlord and tenant and try to intervene. The idea that local government is responsible for this, I don’t agree with.”
The city has tried to wield its planning and zoning powers to encourage residential development that would, in theory, be more affordable, Mena said. Special zoning rules approved five years ago for the North Ponce area allow developers to apply for additional density to encourage construction of more and smaller units that could rent for less — though the rules don’t specify rent amounts, leaving that up to the free market to determine.
But only one project, on Madeira Avenue, has been submitted under the new North Ponce rules. The proposal would entail demolition of six existing, older apartment buildings with a total of 38 units. A new nine-story building would provide 143 rentals, including 54 studio apartments and nine “live-work” units on the ground floor. But the plan, approved by city commissioners Tuesday in the first of two votes, has no stipulations on what rents would be charged.
Counter to egalitarian view of Gables founder
Carbonell, the activist and preservationist, called commissioners’ position shortsighted. She noted city founder George Merrick — whose vision of a Mediterranean suburb MG Developer said it’s emulating in Gables Village — planned an egalitarian city with sections of apartments and smaller houses for middle-class people alongside mansions and estates for the wealthy.
“We’re losing that neighborhood diversity,” Carbonell said. “This is nothing against MG and their craftsmanship, but the fact they’re using George Merrick to sell this is disingenuous. He wanted everybody to afford his beautiful city. We’re losing that.
“This is a whole block just destroyed, just a whole block razed. Developers are picking off these small multifamily buildings. The renters are also being kind of shunned. It’s a human issue more than anything. That’s something that needs to be addressed.”
Sabrina Velarde, policy director at nonprofit advocacy group Miami Homes for All, said the loss of such a chunk of quality affordable housing is just the latest example of a dynamic that has led to an unprecedented housing crisis in Miami-Dade. Solving it will require commitment — and financial investments in affordable housing — from local governments, she said.
“Moments like this are definitely concerning. You continue to decrease the number of available units at that price point, and you are pricing out a majority of our workforce,” Velarde said. “The priority should be to preserve and rehabilitate the units we do have to ensure you are preventing displacement. Anything that is affordable, where people can remain without massive rent increases, Is something we should hold dear.”
Those involved in the Gables Village plan say ensuring affordability is out of their hands. Market and economic forces make it increasingly lucrative to redevelop older, outdated apartment buildings, which in some cases don’t generate enough rent revenue to justify renovation to current codes, they say.
Fabre, one of the principals in a series of corporate entities that have long owned all but one property on this Gables block, said they’re selling not only because of an attractive offer, but because he and his partners, including his brothers, have been managing the buildings for 30 years and are at retirement age — and so, he said, are the apartments.
“This style of apartment in the heart of Coral Gables is finished,” he said. “There’s not much to be done about it. This is what they call gentrification in other places, only this (city) is already gentrified. This is urban infill development. It’s better to knock down this typology of building. It’s obsolete.”
Developer to help displaced tenants find homes
In an interview, MG CEO Alirio Torrealba said renters displaced by his projects, until the recent past, had little trouble finding comparable places to live in the Gables. He acknowledged that’s now changed dramatically.
“There is incredible demand at this moment,” he said. “It’s clear that at these prices they’re paying it’s very difficult, and rents are all going to go up.”
Torrealba said he is hiring a brokerage group with knowledge of the local rental market to help tenants displaced by the Gables Village project find new places to live that they can afford.
He said there may be a greater supply of affordable apartments remaining that many assume, and he insisted they’re unlikely to disappear anytime soon. In fact, he said, he’s finding it difficult to buy properties to redevelop. Owners are now hanging on to the small apartment buildings because they provide a dependable income stream, Torrealba said.
That’s small consolation to renters like Giancarlo Messina, who has lived in a building slated to come down for Gables Village for eight of his 14 years as a Coral Gables resident. Messina pays $1,350 for a one-bedroom he shares with his Irish setter, Simona, while he pays off University of Miami law school loans.
Messina went looking for an apartment in the neighborhood the other day, and stopped at a two-bedroom duplex under renovation a short walk away. The asking price, he said, was $4,500 a month.
The young attorney said he fears losing not only his home, but the network of local clients he has built for his budding career as a tax attorney, and the sense of community he shares with his neighbors.
“I get it. It’s capitalism. It’s America,” Messina said. “But this is my community here. I have friends here. I walk everywhere. I walk my dog here. I love this community. I’d like to think it’s an inclusive community. But is it? I guess, unless you’re not one of the wealthy or have had property for a long time. I don’t, so it sucks. I’m not entitled to anything. It’s a form of gentrification. It’s a question of what kind of identity Coral Gables wants to have.
“I decided to lay down roots here. But now it’s being ripped away from me.”
A few residents on the block are sanguine, however.
Monica Pelaez, a four-year resident, works with kids with disabilities and goes on home visits or conducts virtual consultations from a home office in her two-bedroom apartment, for which she pays $1,475 a month.
“I love it there,” Pelaez said. “The quality of life is really good. I like that the apartment is not super-modern. I like that it has wood floors and the old Miami feel and the nice gardens.”
She said she’s not sure she’ll find another place with the same appeal, but she’s confident something will turn up. She’s hoping the Gables Village deal falls through.
“I’ll stay in Coral Gables. One way or another,” she said. “Right now it looks to me that everything is very volatile. Real estate deals in the area are iffy. So who knows?”
This story was originally published April 3, 2022 at 6:30 AM.