Miami Beach wants builders to help pay the costs of dealing with climate change and reducing the city’s carbon footprint.
A new law requires builders of structures bigger than 7,000 square feet either to meet certain green building standards or pay a fee equal to 5 percent of construction costs.
That’s a big chunk of money. If the city had been collecting that fee for the last six years, it would have about $60 million to spend on green projects like water quality monitoring, cleanup of contamination and charging stations for electric vehicles.
It’s not a new idea, but it goes further than any other jurisdiction in South Florida.
As of April 1, builders in Miami Beach must either erect structures that use less energy and water or pay the city 5 percent of the total construction cost. At a typical cost of about $250 per square foot to build a new home in Miami-Dade, the 5 percent fee for a 7,000 square foot house would be $87,500.
In the face of a changing climate and rising sea levels — and in a state where it’s difficult to get legislative funding for public projects to deal with these looming issues — the new mandate is a novel shift that places part of the burden of paying for long-term planning on the private sector.
This new rule reaches farther than similar ordinances in other jurisdictions by requiring all new construction larger than 7,000 square feet be certified LEED gold or better in order to avoid a fee. Builders can also pursue two other top-tier green standards. By contrast, in the city of Miami, a LEED silver certification — a step down from gold certification — is required for new buildings only when they are larger than 50,000 square feet. Miami-Dade requires all new county-owned buildings to be LEED silver.
Planning officials in South Florida said they are watching to see if the new ordinance gets the private and public sectors on the same wavelength for fostering sustainable growth.
“I’m hoping it’s beneficial for Miami Beach,” said Jim Murley, Miami-Dade’s chief resilience officer. “And if it is, I’m sure our county commissioners will be telling us to start looking at it.”
Not everyone is thrilled. Some in the development community are concerned it will further cool a market that is already slowing down, particularly in a hot spot like Miami Beach.
“I think this is going to surprise the commercial and residential community like a ton of bricks,” said Todd Glaser, a developer and major player in Beach real estate.
Upfront costs are higher for these types of buildings, which can have solar panels, wind turbines and sophisticated air conditioning and rainwater harvesting systems. But advocates argue that the payoff can be seen in the long term because the materials last longer, require less maintenance and the buildings save energy and water.
LEED, or Leadership in Energy and Environmental Design, is a designation given by the U.S. Green Building Council that requires paid inspectors to examine homes through the construction process. The fee was set at 5 percent based on estimates of how much it typically costs builders to achieve a LEED certification. Under the new law, there’s no fee for LEED gold or platinum buildings, and the fee for LEED silver structures is about 3 percent. The most basic LEED buildings would pay about 2.5 percent.
Betsy Wheaton, the city’s environment and sustainability director, told the Miami Herald the city wants to build a fund specifically for sustainability projects like building permeable pavements and improving the Beach’s tree canopy. As the city continues an ambitious, $400 million anti-flooding pump program to combat rising tides, she also envisions incorporating green elements, like reintroduction of mangroves, into seawall projects for stemming sea level rise.
That’s if developers choose to pay instead of building green-certified buildings.
“We also want to improve the building stock which is being built in Miami Beach,” Wheaton said. “It was a way for us to create incentives for the development community to look at the way they’re constructing — looking at their means and methods, if they’re using recycled material, looking at how they’re designing buildings, how they can be more creative with including energy and water conservation elements.”
The Beach’s new “green building” ordinance took effect April 1. It will take a few years to see the impact of the new fee: Do more developers go green, or do they choose to pay up?
Before the City Commission approved the new rule, spearheaded by Commissioner Micky Steinberg, City Hall analyzed the previous six years worth of building permits to get a sense of how many projects might be subject to the fee.
Between 2010 and 2014, an average of about 150 permits were issued each year for buildings greater than 7,000 square feet — some of them mansions, some commercial buildings. The numbers dipped in 2015, when 64 such permits given. Taking 5 percent of the total construction value for all of these buildings, none of them LEED gold, the city would have brought in about $60 million over those six years.
The expectation, Wheaton said, is that the city will collect enough money for innovative projects, such as public parks that can take on water and double as storage during floods. She cites such a public space in Rotterdam, The Netherlands, where a recreational area during dry weather can collect water that will drain back into the ground during heavy rain.
This philosophy comes at a cost, and private builders in the Beach will now be shouldering some of that. Glaser said he thinks the Beach should have done more to give the real estate community a heads-up that it was considering this fee.
He thinks the green building fee will shock others who weren’t looped in, and residential owners may push back.
“The costs are just going up on everything,” he said. “And things are slowing down. And [the city is] not taking that into consideration.”
Whether the fees come as a surprise or not, they’re the law now, and other regional planners say the ordinance could drive a conversation about expanding the role the private sector plays in reducing carbon emissions, conserving energy and developing a community that can adjust to cope with climate change.
“When we think about the role of private industry, we do want to help ensure that more and more infrastructure in our community is going to be energy efficient,” said Jennifer Jurado, director of Broward County’s division of Natural Resources Planning and Management. She is eager to see how the Beach’s new law plays out during the next several years.
In the Keys, another flood-prone area that will likely have large planning expenses as it prepares for the future, limited development opportunities could make a green building ordinance less useful.
Still, it is an avenue leaders might have to explore soon.
“We’re always looking at the limited options,” said Rhonda Haag, climate and sustainability director for Monroe County. “We’ll probably be going down that road sooner or later. In a county that has 75,000 residents, hundred of miles of shoreline, we’re going to have to make very large expenditures.”