How long does it take Miami-Dade County to put an affordable housing fund to work? Ten years, and counting.
Created at the end of an overheated housing boom, the Affordable Housing Trust Fund launched in 2007 as a new source of public dollars to subsidize the building of low-rent apartments and houses and preserve existing ones. But it was another nine years before a board was appointed to oversee it, and the fund is still waiting for rules, procedures and an outside administrator to govern how money should be distributed. After a decade, the fund has accumulated a relatively paltry $5.7 million.
The fund’s modest, untapped coffers have been a source of consternation for the county commissioners who want credit for tackling Miami-Dade’s chronic gap between housing prices and local incomes. In 2016, the commission voted to reserve up to $10 million from any end-of-year budget surpluses and shift the money to the affordable housing fund. But in early 2017, the administration of Mayor Carlos Gimenez announced there was only $387,000 left over for the housing fund.
“It’s embarrassing,” said Commissioner Xavier Suarez, an advocate for the $10 million allocation proposal. “It hasn’t had any money. We couldn’t really build anything.”
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But despite a languid pace that has seen the fund remain dormant through a real estate bust and a second boom, there are signs of hope that have advocates predicting action in 2018.
Obviously, the challenge has been having sufficient funds to work with.
Shekeria Brown, vice board chair for Miami-Dade’s Affordable Housing Trust Fund.
After attracting little interest in nine years, a builder this fall took advantage of a revised county law offering developers the ability to expand projects in exchange for contributions to the housing fund. The $2.1 million check from Pasadena Homes accounts for nearly 40 cents of every dollar in the fund today.
More money appears to be on the way. In the last two years, commissioners adopted a series of rules set to divert streams of money into the fund. Those include 25 percent of proceeds from certain land sales by Miami-Dade, and more than $1 million from a pending settlement of unpaid fines from Uber drivers.
“Obviously, the challenge has been having sufficient funds to work with,” said Shekeria Brown, vice chair of the board that oversees the housing fund. The current balance is short of the $10 million that Brown said board members see as needed to start a sustainable loan fund for small-scale housing developers.
“But it’s money,” she said. “It could be loaned. We think we could do something with it.”
The housing fund is just a tiny part of Miami-Dade’s funding landscape for affordable housing. This year, the county plans to collect about $37 million in real estate taxes that are earmarked for low-interest loans to affordable-housing developers. The county administers another $240 million in federal housing funds, which pay for rent vouchers, development aid and other programs aimed at boosting housing options in Miami-Dade.
But study after study of Miami’s prosperity gaps amplify the fact that existing programs haven’t turned around the community’s need for more housing within reach of working-class families. In April, Florida International University posted a paper showing Miami-Dade finishing fourth on the list of U.S. counties with the most renters paying at least 30 percent of their income toward housing. The same study named Miami-Dade the second least-affordable U.S. county for renters.
You can’t build much for $6 million.
Michael Liu, housing director for Miami-Dade County
In 2007, county commissioners created the housing fund — the same year they launched a voluntary program designed to encourage builders to create housing units for people who couldn’t afford market prices. In exchange for building “workforce” units — targeting buyers who earn too much to qualify for housing subsidies but not enough to live comfortably in most neighborhoods — builders could obtain zoning waivers allowing for larger projects.
Available for properties outside of city limits and governed by county zoning rules, the program offered an alternative route to actually building units for workforce buyers. Instead of creating the units themselves, builders could pay the county in exchange for the density bonuses. That money then would go into the affordable-housing fund to create below-market units elsewhere.
With developers largely shunning the 2007 voluntary program, its author, Commissioner Barbara Jordan, last year tried to impose mandatory requirements for developers to either build below-market units or pay into the housing fund to avoid the restrictions. Builders would still get density bonuses allowing for larger projects. But the developer industry blocked Jordan’s legislation while branding it as a route to higher prices for all home buyers.
While Jordan’s mandatory rules failed, she did pass an ordinance modifying the 2007 legislation with changes to calculations for how developers qualify for density bonuses by reserving units for “workforce” buyers.
Miami-Dade law defines workforce buyers by income range, and a 2016 county analysis said the proposed workforce set asides targeted a family of four earning between $43,000 and $99,000.
At the time, Jordan predicted the tweaks on density bonuses would entice developers to start building workforce housing units or pay into the fund. “I think,” she said after the vote in December 2016, “that the development community probably will be a little more energetic.”
Eric Miller, an owner of Pasadena, said the rewrite did prompt his firm to change course — from building workforce units to paying Miami-Dade outright for more density. Pasadena paid $2.1 million into the housing fund this fall in order to qualify for about 200 more units at its new Mila apartment complex outside North Miami Beach. Instead of 965 units, Mila will have 1,170.
Miller said Jordan’s revisions made it slightly more challenging for Mila to qualify its units for workforce designations, since the county toughened some income rules on buyers. That made paying into the fund much more attractive.
“It was feasible to do it,” Miller said of building the workforce units. “But ‘buying it out’ made more sense. Because the next owner [won’t] have any restrictions” on the income levels of future renters.
Pasadena is the largest contributor to the trust fund’s current $5.7 million balance, with Lennar holding the second-place slot with a $1.75 million contribution that the county’s housing department said was made before the Jordan revisions took place. With money building up, Miami-Dade has been plotting the next step: actually distributing it.
The commission-appointed board to oversee the money wasn’t named until last year and convened its first meeting in November 2016. Its main mission has been to hire an outside group to oversee construction loans made out of the fund. The board also needs to agree on guidelines for who should qualify for the money and how — rules that the outside administrator could help draft.
Brown, the fund board’s vice chair and executive director of the South Florida Community Development Coalition, said a lack of funds has made it hard to find an administrator for the money. The process is complicated by internal rules that designate only a tiny portion of the fund’s balance for construction loans, though proposed legislation would remove that barrier.
Michael Liu, Gimenez’s housing director, said he sees the fund as eventually creating a useful option for developers not interested in pursuing the highly competitive county program for affordable-housing projects. The fund, he said, could act more like a bank, offering construction loans as projects become eligible at a time when the balance is large enough to provide short-term funds.
But he said the fund has a while to go before it can even get started.
“That’s not a lot of money,” Liu said. “You can’t build much for $6 million.”