Many factors are involved in solving affordable housing issue

Many factors are involved in solving affordable housing issue

November 2019 

CEOs were asked: The city of Miami is unveiling a plan to build more affordable housing. Often times, developers  say they simply cannot make the math work out on an affordable housing project. Yet the need appears real. How  should the issue of housing affordability be addressed? 

The need is real. Over the past 10 years, housing prices have increased 66 percent compared to wage increases  of only 14 percent. Simply put, the workforce can’t afford rents. One solution is the creation of more blended  neighborhoods focused on live, work, play models that incentivize corporations to participate in development of  affordable housing and recreation opportunities. 

Michael Balaban, President, CEO, Jewish Federation of Broward County 

Our society is only as good as our ability to be inclusive of all our residents, including those in need of affordable  housing. Given the number of developments and developers of luxury residential complexes in Miami, if a portion  of the taxes already collected were used as a fund for affordable housing to support tax incentives for developers  willing to invest, the math of affordable housing projects would be favorably different. Another contributing factor is  how the cost of construction is inflated by mandatory parking minimums, which depress housing supply and  furthers Miami’s reliance on cars instead of newer, more efficient forms of transportation like micro-mobility. Miami  has been thoughtful in peeling back some of these requirements but encouraging developers to instead fill that  required parking space with affordable homes could be the best path forward for the city. 

Uhriel Bedoya, Florida General Manager, Lime 

Housing affordability is a very important issue to address, as moderate-income households spend up to 70  percent of income on housing and transportation. This is something that we must collectively resolve if we want to  improve the quality of living in Miami and remain competitive for business growth. It requires decisive community  action and political will. 

Claudia Busch, Founding Principal, Berenblum Busch Architects 

Citizens, business associations and other civil and public institutions will need to weigh in on this issue in order for  any solution to work. As with any large economic investment, costs and outcomes need to be measured against  reliable metrics. Affordable housing also will require a greater economic commitment from government, and  public/private partnerships that are subject to rigorous reviews. Additionally, every community will need to  address, within their respective plans, growth management, air rights, resiliency, affordable and reliable  transportation to city centers, social support services and infrastructure improvements. 

Anita Byer, CEO, Setnor Byer Insurance & Risk 

Government subsidies are the only short-term solution. It can come in multiple forms, from making affordable land  available to developers or providing zoning code incentives for affordable housing development. Giving  developers additional development density for projects, in exchange for building affordable housing (being it on site or off-site), is another possible strategy. 

Ricardo Dunin, Founding Partner, Lionheart Capital

There is no silver bullet to address the issue of affordable housing, especially when addressing those at 80  percent or lower of Area Median Income (AMI). To start, we must address the enormous costs and bureaucracy associated with permitting. We then need to find a way to better use surplus land owned by municipalities, county  government, state and federal governments to seed development. Banking regulations need to also be modified  to incentivize financing of affordable housing stock targeting extremely low, low, and moderate-income renters.  The state also must stop raiding the Zadowski Fund and allow those dollars to flow to their originally intended  purpose. The ongoing raiding is now more than $2 billion and has prevented over 200,000 rental units to be built  for those at 80 percent of AMI or less. 

Carlos R. Fernandez-Guzman, President, CEO, Pacific National Bank (PNB) 

The answer is by building around transit and delivering smaller units with less parking. The math behind providing  affordable housing consists of many factors, including costs of construction, programming of product, and design  efficiencies. Often times the size of units and the need for parking drives costs far greater than any other factor.  As developers, we could adapt to a more modern system of urbanization by bringing people closer to transit and  delivering a more attainable priced product with smaller units and less parking. 

Arnaud Karsenti, Managing Principal, 13th Floor Investments 

Affordable housing projects need the partnership between the private sector and government both working toward  the benefit of the population and not their own. Private sector should expect lower ROI and government should  stimulate these investments. Usually the fight is for the benefit of the few. We should all work together and benefit  while we also “benefit” the community by making housing more affordable. 

Yaeli Merenfeld, President, Anny’s Bread Factory 

It must be addressed twofold: Containing costs and providing prospective homeowners with fair and appropriate  financing options. I have been a champion of fair lending practices for decades since our region has sadly been a  target of predatory lending tactics. We also have some leading developers who are championing the inclusion of  affordable housing in their new construction projects, especially in the urban core, and these companies should  be celebrated and others should emulate their approaches. It is possible to achieve this balance. Developers  need to be part of the solution and bring innovative ideas that foster affordability. It is also imperative that our  cities create more partnerships with businesses and nonprofits which can lead to creative housing solutions. I  think cities can still improve in-fill housing programs. Neighborhoods free of empty lots or decaying homes are  better and safer. 

Bernie Navarro, Founder and President, Benworth Capital Partners 

There needs to be an appropriate public-private partnership to make it work for all parties involved. Without  government engagement on the financial side, it would be difficult for developers to make the numbers work. 

Sanket Parekh, Founder and Managing Partner, Secocha Ventures 

I support the city of Miami’s plan to build more affordable housing. While we have a growing young population in  South Florida, the GDP per capita in 2017 was not even in the top 100 markets in the U.S.A., so people are  having a difficult time finding a place to live. Developers need tax incentives from state and local authorities for  new creative solutions to this huge affordability crisis. 

Julio Ramirez, President, CEO, JEM Global Consulting

Tax credits for affordable housing is an excellent way of addressing the issue. Substantial low-income housing  has been built in South Florida through tax credits and broadening that program can incent developers to build  affordable housing that helps the lower middle class as well. 

Stuart Singer, Administrative Partner, Fort Lauderdale Office, Boies Schiller & Flexner 

Although micro-housing units are not for everyone, they are catching on in cities with a lack of affordable housing  and may help alleviate the situation in Miami. Seattle has done a great job with changing their ordinances to allow  for higher density and multi-family housing, even in residential areas. 

Evelio C. Torres, President, CEO, Early Learning Coalition of Miami-Dade and Monroe