Tackling Housing Affordability in Miami: Practical Solutions in an Impractical Environment

by Jeffrey Watson for MDEAT

Article republished from MDEAT Annual Magazine: Urgency of Now https://issuu.com/mdeat/docs/mdeat_2020_annual_magazine

What is the anti-gentrification solution for communities in Miami that have become more attractive to investors and affluent residents? That was the thesis to a virtual town hall hosted in September 2020 by MDEAT discussing the State of Black Homeownership. With a panel of non-profit developers, real estate experts, and economic leaders and nearly 100 members of the community tuning in via Zoom, the town hall was presented to discuss practical solutions in an impractical environment. Dr. Ned Murray, Associate Director at FIU Metropolitan Center, paralleled the impact of gentrification to a cancer.

“Starting with the first wave of investment that comes into the community from the outside — it does not belong there just like a tumor does not belong in the body. It [gentrification] then begins to metastasize, which happens very quickly in Miami,” explained Murray. “In dealing with cancer, we know that in some cases there are pre-existing conditions, for instance, environment and diet, and we also know some of it is preventable and curable. The same is the case with gentrification.”

Miami is no different than historically Black communities around the country that have seen a surge in investment activity resulting in increased property values and long time residents being priced out. While each community’s response to gentrification is different, there are best practices around the
country where some sort of intervention has helped to either stop the cancer or atleast boost resident’s ability to participate in the process. And that was the premise of the town hall — what can we learn as a community from other metropolitan cities with similar challenges that have created solutions to increase Black homeownership and address gentrification?

Authorizing the formation of community land trusts is one possible solution. Nehemiah Davis oversees affordable housing development for Neighbors And Neighbors Association (NANA) and has been developing infill housing, which caps sales price for a property at $205,000. Davis commented that land trusts would preserve more infi ll lots and properties for affordable housing development.

I also agree with the idea of land trusts and that some form of government intervention and unique programs are critical. I compare Miami to other large cities that have a higher Black homeownership rate but without the housing programs that we have. The biggest difference is that homeownership in those cities is largely driven by higher incomes, education, and stronger employment. In Miami, where the average median household income of $41,000 fails to match our high cost of living, land trusts can work to boost the affordability gap.

However, it has to be said that we have one of the best programs in the country for delivering affordable housing. It is called a surtax program and is the source of funding for MDEAT HAP. Our surtax program is probably the best in the country and has produced thousands of housing units in the last 28 years. The issue is not the absence of programs but the need to do a better job of executing the programs and then boosting them with additional resources.

Cornelius Shiver also participated in the town hall and offered an example of how his agency, the Southeast Overtown/Parkwest CRA, is creating unique models to overcome housing affordability in his community.

“As a CRA, we do not have to make a profit, and we have a strong revenue source, which allows us to make special concessions that would otherwise not fi t market models,” says Shiver. “For example, the CRA had two townhomes for sale that we arbitrarily set the price to target a family at 40 percent and 50 percent average median income (AMI). We set out to qualify the buyer based on 30 percent of their income, regardless of what it was, and that would determine their mortgage and monthly payments. That in combination with down payment assistance programs like MDEAT’s and the $80,000 available at the county would make a signifi cant difference to the buyer’s ability to qualify and get into a home.”

Ultimately, there is a greater role that a collective body of government entities and community organizations can play, and that requires that we get back to community-based planning. There has to be master plans created for Black communities and with a vision and actionable plan that outlines economic development, education, and housing.

Mark Alston reminded us of what happened to Seattle and what gentrification looks like when it is complete. The neighborhoods in Seattle that were completely Black-owned are completely White occupied now, and Black people have been dispersed into the suburbs. As a result there is no voting power and no single area where there is a solid block of Black votes. Alston is Broker/Owner Skyway Realty and Alston & Associates Mortgage Company.

Gentrification is the result of economic inequities. When Black families earn 60 cents for every dollar that White families earn, as property values go up, we are left behind and do not have capacity to take advantage of the economic opportunities. That alone is enough to ask from the county that market principles in combination with market solutions are desperately needed to achieve a more balanced Miami for all.

Jeffrey Watson
CEO, Solairgen Energy Corp.
Managing Partner, HP3, LLC
Former MMAP Project Consultant for Carrie P Meek Federal Fund