How do we address Miami’s housing crisis?
Curated by Miami Homes For All, Opportunity Miami
It’s 2040, and all Miamians live in safe, quality homes that they can afford, paying no more than 30% of their income on the rent or mortgage. These apartments or houses are close to jobs, schools, grocery stores, and places for the community to gather and recreate. Parents can get home in time to make and enjoy dinner with their families or take part in restorative activities like exercise and recreation. Black and Hispanic residents have equitable access to these homes.
The homes are resilient to flooding, strong storms, and extreme heat.
Families have a choice in what neighborhoods they can live in depending on what they value, whether it is proximity to loved ones, their community, or certain opportunities for economic mobility.
Families are able to keep their kids in the same school if they choose because they are not being displaced from their neighborhoods due to rising rents or landlord decisions to renovate and rent to a higher-income market.
In 2023, Miami is in the adolescence of its growth and development. Compared to many other cities across the country, we are still defining what we will be, and Miami has ample resources to make this vision a reality.
Why does it matter?
Having housing that is affordable to residents of all income levels is critical to Miami’s growth, prosperity, and social stability.
The economy: Our economy depends on our workforce being stably housed. Miami has experienced a “brain drain” for decades. More recently, labor of all incomes have fled for neighboring counties or even other states to be able to make ends meet. The pandemic exacerbated the labor shortage until wage corrections eased the trend. Yet attracting and retaining labor has emerged as a prime concern among employers large and small across the county.
At a tipping point: Miami-Dade is on the cusp of a major homelessness crisis such as those afflicting cities across the country. The needs and gaps analysis conducted by the Homeless Trust of Miami-Dade County revealed that the main factor contributing to homelessness is primarily economic, attributed to the increasing housing costs and stagnant wages. Miami has been here before; in the 1980s, 8,000 of our residents were experiencing unsheltered homelessness. Our community came together to address this crisis back then and reduced the number by 88%. It’s time to rally again to prevent a return to that past.
Quality of life: The lack of affordable homes hurts residents’ quality of life in many ways. It forces them to spend hours driving to and from work each day instead of with their loved ones; to live in buildings that need serious rehab or air conditioning; to suffer regular flooding in their homes; to accept a job that limits their opportunities. It also hurts business owners who cannot fill open positions, and it hurts consumers who cannot access needed services, such as child and elder care, medical services, or education.
Where are we now?
Current housing shortage:
According to the University of Florida, Miami-Dade has a current shortage of about 175,000 homes that are affordable to households earning up to about $75,000 per year (80% of the area median income or AMI for a family of three). The need is largest among lower-income renter households, with over 135,000 rental units needed for families earning up to $46,000 (50% AMI). The shortage drops sharply to 16,970 units for renter households earning up to 111,000 per year (120% AMI).
Housing cost burden: 1 in 3 families earn less than $35,000 per year, and 85% of these families are “housing cost burdened,” or paying more than they can afford on housing. Racial and ethnic minorities are disproportionately affected, with 60% of all Hispanic renters and 58% of all Black, non-Hispanic renters being cost-burdened, compared to 54% of their White, non-Hispanic counterparts. Affordable housing that is far from jobs and schools can quickly turn unaffordable due to high transportation costs. In fact, Miamians spend an average of 56% of their income on housing and transportation costs together. Other costs are rising, too. Most recently, property insurance costs in Florida are expected to increase 40% in 2023, directly impacting the finances of both homeowners and renters.
According to the Shimberg Center for Housing Studies at the University of Florida, in Miami-Dade County:
122,070 cost-burdened households earn less than $20,000 per year.
107,193 cost-burdened households earn between $20,000 and $34,999 per year.
90,125 cost-burdened households earn $35,000 to $49,999 per year.
Wages vs. rents: Miami is the least affordable city in the country, a state that only worsened in the last two years. Rents increased 24% on average between 2021 to 2022. The median single-family home sales price in South Florida went up 8.8% in 2023 compared to 2022. The condo/townhome median sales price went up 22% in 2023 from last year. Meanwhile, wages in the Miami metro area increased only 6.3% on average over the course of 2022. 42% of Miami-Dade residents make less than $50,000 per year.
Future job growth will mostly be low-wage: Even considering recent growth in the tech industry, Miami’s economy continues to be driven by low-wage sectors, including health, hospitality and services. According to the Florida Department of Economic Opportunity, seven out of the ten occupations expected to create the most jobs between 2022 and 2030, or 17,315 out of 23,944 new jobs, will earn less than $18 per hour. These equate to extremely low- and very low-income salaries that can only afford less than $1,000 per month in rent. When Miami becomes unlivable for these workers, they will increasingly decide not to fill these positions and take their labor somewhere else. The flight of our workforce to other counties or states is already a trend, with a net 27,925 residents having left Miami-Dade from 2020 to 2022, according to FIU’s Perez Metropolitan Center.
Missing middle: Nearly all affordable housing developments and rehabs are in the form of large-scale multi-family buildings funded by Low-Income Housing Tax Credits, with about 500 units coming online in Miami per year. Meanwhile, most affordable housing existing today in Miami takes the form of smaller multifamily properties with fewer than 50 units. By and large, this housing stock is decades old and badly in need of repair. Smaller multifamily is also extremely difficult to develop or rehab due to policy and financing challenges.
Progress being made: Our elected leaders are taking meaningful steps to address this crisis. In 2022, Mayor Levine Cava launched the HOMES plan - a comprehensive approach to address the county’s housing needs - and funded it with $85 million from general revenue, the largest amount of such investment in our county’s history. This was the latest initiative of her Building Blocks Program, which also includes a consortium of private investment in affordable housing totalling over $75 million. In March 2023, the Florida legislature passed the Live Local Act - the largest housing package in state history, which includes nearly $800 million in funding and incentives for workforce housing mostly targeted to households earning between 80-120% of area median income. Other recent, local interventions have been made, and much more is needed, but these are critical steps forward that demonstrate growing consensus about the affordable housing issue and what should be done about it.
Occupations Ranked by Projected Job Growth
Solutions
According to the Greater Miami Housing Alliance, there are four major strategies to address our affordable and workforce housing needs. PALM:
Preservation
Assistance
Land
Money
I. Preserve the housing we have
Most affordable and workforce housing exists in Miami today as smaller multifamily apartment buildings. They charge lower rents in part because they are in need of significant repair. Unfortunately, we are losing these properties rapidly to market conversion or, increasingly, to code violations and failure to pass 40-year inspections. Zoning in most of our municipalities is restricted to low-rise buildings, while the financial feasibility of building them is a major hurdle. Rehabbing these units, improving their resilience to climate hazards like storms and extreme heat, and preserving them as more affordable could be more cost-effective than replacing the units wholesale. Recently, a few programs were launched to support this, including a preservation loan program by the County, a resilience assessment by Enterprise Community Partners, and support for small-scale developers of color funded by JPMorgan Chase. These programs should be supported, improved upon, and scaled following their pilot stages.
A significant proportion of Miami’s single-family homes are also older and in need of updating to extend their life and make them climate resilient through reliable air conditioning, weatherization, increasing the tree canopy, and other repairs. It is also where many vulnerable residents live, including lower-income elderly and multigenerational families. Rising insurance costs and a hot real estate market can make it unaffordable for many to hang onto their property at a time when there is nowhere else to go if they must sell. An option that promotes the safety of these families in their current location is the provision of accessory dwelling units (ADUs) or grandparent's quarters. These units can be rented and bring additional income to support the household. Miami-Dade recently approved this policy, but it only applies to the unincorporated portion of the county.
II. Assist renters and owners to stay in place
The pandemic exacerbated and accelerated the risk of displacement from rental and owned homes, making the prospect of a street homelessness crisis a real danger. Ultimately, Miami-Dade, its municipalities (including Hialeah, the City of Miami, and the City of Miami Beach), and the State of Florida distributed over $138 million in rental assistance from 2020-2022 to over 21,000 Miami-Dade residents. Some measures of this program may be important to maintain over time. In 2022, the County also created a new Office of Housing Advocacy to support residents as they navigate resources to remain in or identify affordable housing. This Office should be supported and built out to coordinate the efforts of multiple agencies and municipalities.
Assistance for homeowners as property insurance increases drastically is also needed. Beyond legal reform, the State legislature needs to consider additional ways to help keep insurance costs down and insurance options afloat so people can remain in their homes.
III. Use land more effectively
Public land: Land costs represent one of the biggest barriers to creating more affordable housing. Miami-Dade and even some municipalities have a significant amount of publicly-owned land that is greatly underutilized. Yet there is no policy that makes affordable housing a priority for this land’s redevelopment, resulting in many missed opportunities. Fortunately, some opportunities still exist on both large and small parcels. A more strategic approach, such as that proposed by the Public Land for Public Good Coalition, could leverage this land with existing subsidies to create thousands of units of affordable housing.
Increase allowable units: Most of Miami-Dade is zoned for single-family housing. To accommodate population growth, we must identify sites along mass transit lines and high-traffic corridors that are viable for more units, ensuring that they are resilient and allow people to get to jobs and other opportunities efficiently. It is essential that increases in density rights come with the obligation to build a proportion of affordable units in addition to workforce housing. Some policies are beginning to take shape across the county (County’s Rapid Transit Zones, North Bay Village’s Workforce Housing Program, and Omni CRA’s Opportunity Zone Housing). These will require several years of analysis and tweaking as lessons learned play out.
Support small-scale multifamily: Currently, some zoning laws make it especially difficult to build or rehab small multifamily properties. These buildings should be encouraged as a staple of the housing development pipeline, with parking and setback requirements, impact fees, and infrastructure fees differentiated from larger buildings. Further fee reductions should be offered in exchange for affordability.
IV. Money invested at scale
Capital is the biggest barrier to creating and preserving affordable housing in our community. We need subordinate and inexpensive capital - the kind only the public sector can provide. Our county will be unable to make the kind of progress we need without it. Miami-Dade is overdue for a major, local source of public capital - at least $500 million for housing alone. This level of commitment will require substantial community dialogue to identify the pipeline of deals - both large-scale and small - and how the money will be stewarded to ensure transparency, accountability, and quick, impactful investment. We know that this is possible through these local (City of Miami Beach’s General Obligation Bond and Palm Beach’s $200 M Affordable Housing Bond) and nationwide examples (San Francisco Accelerator Fund, San Antonio’s bond package, and Portland’s Housing Bond).