Marcia Fudge, US Secretary of Housing and Urban Development, rushed to Miami on Tuesday, declaring the city ground zero of the national housing crisis. Local residential real estate experts somewhat agreed.
“I decided to go to Miami, to the epicenter of the real estate crisis in this country,” Fudge said during a tour of Related Group’s Liberty Square redevelopment project in Liberty City, according to the Miami Herald.
Some recent data supports Fudge’s claim. The city led the country in rent increases, with renters in Miami paying 45.8 percent more in May than in the same month last year, a Realtor.com report showed. It’s a trend that has made Miami one of the highest renting cities in America at a time when US rents have been growing at double-digit rates year on year, Realtor.com noted.
Victor Ballestas, a director at Miami-based developer Integra Investments, said his firm plans to focus more on affordable housing projects in the future due to demand. “There seems to be a massive need,” he said. “We were one of the markets where prices rose sharply. i can see where [Fudge’s] Comment comes from.”
Integra and its partner, Elderly Housing Development & Operations Corporation, recently completed Mosaico, a 271-unit multi-family building for the elderly with affordable housing in Miami’s Allapatah neighborhood. Integra also recently broke ground on Wrecker’s Cay Apartments, a development of 280 affordable rental apartments for workers in Key West.
“The problem is that along with inflation and everything else, land prices have gone crazy and construction costs have gone crazy,” Ballestas said. “It’s becoming harder for developers to provide worker housing because these issues have gotten worse.”
One solution is for elected officials in the City of Miami and Miami-Dade County to change zoning on city- and county-owned land that can be converted into affordable housing for workers, Ballestas said.
Christina Pappas, vice president of The Keyes Companies and current president of the Florida Realtors Association, said Fudge’s testimony wasn’t completely off the mark. “The whole country is experiencing the highest rate of inflation,” said Pappas. “Because of our population growth and the increase in foreign companies relocating here, I think we’re seeing it here more than anywhere else.”
Zoning is key to managing the crisis, she said. The real estate industry must urge local governments to consider zoning changes that would allow developers to build at a higher density that would make affordable housing and workers’ housing viable.
“It’s not just about funding projects and incentivizing developers,” Pappas said. “It should also include the planning and zoning of how we’re allowed to create affordable housing.”
[The Miami Herald] – Francisco Alvarado