The city of Miami has responded to build more affordable housing to ensure the future of its workers with an ambitious plan. An example to follow in the United States!
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Affordable housing, a growing and global concern in the United States:
Like many American real estate professionals, we believe in the future of middle-income housing in the United States as a safe and efficient long-term investment solution. Indeed, it is the only market segment that meets the local demand of the majority of the population (+50%) in a sustainable context of an increase in the proportion of renters among workers.
Between 1990 and 2017, the share of affordable rental housing fell from 46% of the stock in 1990 to just 25% in 2017. In addition, affordable rental units represented a declining share of the housing stock in all states, and the fact that affordable units are too poorly represented in new construction only makes the situation worse.
In response to the national need for affordable housing, the market is evolving and real estate industry players are realizing the importance of meeting people's demands first. The issue of affordable housing is such a big deal for local communities that even major tech giants, such as Google and Microsoft, have pledged millions of dollars to help fund affordable options. Candidates running for office are waking up to this demand, making housing a bigger issue than it has ever been in the country.
This is truly the new direction for real estate investment in the future, and that's good news for both investors and people.
How the City of Miami become a national example of affordable housing policy? policy?
This affordable housing crisis is strongly affecting the Miami metropolitan area, which has attracted a large number of workers, companies, researchers and start-ups in recent years. The demographics have increased dramatically, but the affordable housing stock (mostly older because new construction is generally expensive) has remained the same. As a result, the declining proportion of affordable housing, coupled with rising real estate prices and rents, has made it difficult for a predominantly renter population to access affordable rentals.
In light of this, Miami's political leaders are Miami's political leaders are seriously planning to address this growing affordability crisis in the city locally. accessibility crisis in the city. To do so, they have created a new action plan to allow workers to find housing in line with their income. their income.
The project is divided into 3 key points:
- Create a bank to finance the construction and renovation of affordable housing
- Streamline permits and change zoning
- Ensure that small and medium-sized developers produce 3,200 units of affordable housing each year for 10 years
If that sounds ambitious, a city with an economy as large as Miami's really needs a plan to not only to improve the living standards of its middle class, but also to strengthen the local strengthen the local economy by increasing the purchasing power of households. For political leaders of the city of Miami, a long-term plan is essential for the future viability of the for the future viability of the city to remain primarily an international destination for for businesses, researchers and workers from around the world. from around the world.
The plan addresses the needs of City of Miami residents who earn less than 80% of the area's median household income of $33,999. (The median household income for Miami-Dade County residents being $49,930).
A project based on a public/private partnership:
Under this innovative plan, the effort would be largely private, with the city providing seed money in the form of $85 million. That money, according to the plan, could be turned into $1 billion over 10 years through bank financing, tax incentives and investments from philanthropic and corporate groups.
The project would be led not by the large developers or builders who currently provide the bulk of affordable housing in Miami-Dade County today, but by small and medium-sized Miami-Dade County, but by small and medium-sized contractors on small and medium-sized lots. small and medium size lots.
The primary focus would be on rehabilitating the existing stock, and supplemented by new multi-family buildings of modest size, ranging from 5 to 50 units.
What are the future future ambitions of this project?
▪ Create an affordable housing affordable housing finance company in Miami that would work as an independent to coordinate and provide loans and financing to developers and homeowners
▪ Form a fund Housing Innovation Fund in Miami to create a $1 billion dollar pool through a combination of investments and loans from the public, private and philanthropic sectors
▪ Focus on the renovation of existing housing and construction of new small and medium-sized small and medium-sized housing complexes near transportation corridors
▪ Streamline the permit and zoning review process for housing developers affordable
With these guidelines, the city will be able to address this cyclical problem by building small projects at the same time as larger ones. In Miami, many small lots or buildings have been vacant for years, and the larger developers are not interested in them. The point of this comprehensive infill plan is to attract small developers to these small lots or buildings and make the administrative process easier and less expensive for them.
The plan also aims to stimulate local workers and entrepreneurs. More than 14,000 new jobs could be created by investing a portion of the Innovation Fund in skilled trades training, equipment grants for small contractors, etc.
This housing plan is among the largest in the country. It is achievable thanks to the skills and experience that local developers, real estate investors and the city's banks have acquired over the past decade of growth in the city.
Sources: Jorge M. Pérez Metropolitan Center at Florida International University, Miami Herald.
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