Preservation, Development, and the Missing Middle

North Shore

Susan Askew
Susan Askew

Preservation, Development, and the Missing Middle:

land use committee tackles north beach ordinances

First preservationists and developers compromised to agree on historic districts and a new town center in North Beach. Then the City’s voters approved an increase in density (FAR) to allow for development of Town Center. Now, the work to implement the new FAR and the guidelines for the area’s conservation overlay has begun.
 
As the Commission’s Land Use Committee prepared to discuss ideas, resident and real estate analyst Ana Bozovic asked the Committee members to think about how any new policies would affect the middle class. Bozovic said she uses her background in applied math and physics to look at and report on trends in the market. In the case of Miami Beach, she said the City’s policies have caused a “middle class exodus” as it “rebrands itself into a destination for wealthy visitors”.
 
Bozovic put together a presentation that included data and charts to show what she called a displacement of residents by second and third homebuyers and by the loss of multifamily inventory. Looking at population growth trends, she said during the period from 1980-2016, Miami-Dade County saw an increase in population of 66.87%. The City of Miami experienced an increase of 30.83% while the City of Miami Beach lost 4.55% of its population.
 
A decrease in homestead-designated households from 2010-2017 (16.34%) generated an implied loss of 5,652 residents based on the City’s estimates of average household size of 2.19 residents, she said.
 
At the same time, the supply of rental housing experienced a diminishing supply. “In the City of Miami Beach, no new multifamily buildings have been added in approximately 40 years,” she told the Committee. From 2010-2017, there was a decrease in multifamily inventory of 15.36% with 292 buildings lost. Her implied estimates are that 3,358 apartments and 6,615 residents were lost in that timeframe. Bozovic said the diminishing supply coincides with a period of increased rental demand, causing prices to go up.
 
58.8% of Miami Beach renters pay more than 30% of their gross salary in rent and 49.6% pay more than 35% of their gross salary in rent, according to her presentation. With the percentage of subsidized housing remaining constant, the percentage of high-end housing growing, and total supply shrinking, she said, “The middle is getting squeezed.”
 
While the supply of multifamily decreased, Bozovic said, hotel room count has gone up. “The City," she said, "is giving preference to tourist money  … the City of Miami Beach is flourishing as a tourist destination while losing full-time residents.” From 2011-2017, she noted hotel inventory increased 122%.
 
Meanwhile, “New construction has clearly been built for second and third home buyers. We don’t have a product for middle class families. New construction targets outside money.”
 
“Newer inventory is priced orders of magnitude higher than what the local population can afford,” she said. The average price of post-2000 inventory is $1.5m according to the data she shared with the Committee. Specifically with regard to the discussion on North Beach, she said, “The only new stock is expensive condo inventory. Existing rental inventory is overwhelmingly small, expensive, and not suited for families.”
 
“In 2017, almost 50% of North Beach rentals were priced over $1,800 per month,” Bozovic noted. Median household income, she pointed out, is $40,775. Based on sales data from 2017, “Only pre-1960 inventory is priced at levels that middle class families can afford,” yet she said, many prefer newer product and are willing to move off the Beach, including to more expensive areas like Edgewater to find newer homes. “Modern inventory is beating out location.”
 
Her point, she said, was that “Incentives need to be changed so that community driven housing can be built … The net effect of the policies in place has made it extremely expensive to build, resulting in new inventory that is priced far beyond what local buyers can purchase.”
 
“New inventory purchases are heavily all cash and are marketed to outside buyers, most of whom do not become full-time residents,” she said. “Product marketed to outside buyers is volatile in nature. Outside demand is not a constant. It comes and it goes. Local demand is a constant ... [but] developers are incentivized to create luxury inventory which attracts outside buyers.”
 
“I would like to see policies put in place that encourage developments that are for real people that live and work here that will lead to community.” While increasing density is a means to do that, she said, “I’m not advocating high rises. You can build properly sized, properly priced homes.”
 
“A modest increase in density and an introduction of new rental inventory would go a long way towards bringing community back to the City of Miami Beach,” she concluded.
 
Commissioner Michael Góngora said he appreciated the data but said, “I’m not 100% sure I agree with all of your conclusions” saying while the number of homesteaded residents may have gone down, there could be more renters.
 
Bozovic disagreed saying the quantity of multifamily units had gone down, replaced by hotels and high-end properties that local residents cannot afford.
 
Góngora challenged her, however, saying the conclusions were anecdotal because the City does not have statistical data on the number of renters. “You’ve presented trends but we don’t know what percentage of people are renting at this moment.”
 
Bozovic’s presentation was made at the beginning of the Committee’s discussion on the North Beach Conservation Overlay, which caused Góngora to wonder how her data related to the ordinance on the table. “I find all of this very interesting and I like the data,” but said he didn’t think the data could lead to a conclusion that the Conservation Overlay proposal would create more affordable rental properties.
 
Committee Chair John Alemán said she didn’t think Bozovic was making that assertion but rather, “As we consider land regulations for North Beach that we consider that the middle class is getting squeezed and try to do something about it.”
 
Commissioner Kristen Rosen Gonzalez said based on what she heard, she wanted the group to reconsider provisions in the Conservation Overlay that reduced the average minimum unit size requirements from 800 sq. ft. to 500 sq. ft.
 
“Based on your presentation,” she said to Bozovic, “we need to upgrade what these land regulations are proposing … If you really wanted to create middle income housing for middle income people, the average unit size should be 800-1,000 sq. ft. If we do what we’re doing here, we’re going to create shoeboxes, which are transient because people can’t live in 400 sq. ft. over a long period of time. I’m really glad you made this presentation because now we can really dig in here and create units that are not shoeboxes.”
 
Planning Director Tom Mooney said the reduction in minimum unit size was to allow for incentives to retain contributing buildings, which have smaller footprints. Alemán added the ordinance picked up on the minimum average unit size recommended in the North Beach Master Plan. Regarding the purpose of the ordinance, she said, “Its purpose is to make sure that all new development is basically compatible with the neighborhoods that are already there.”
 
“Whatever we put in here is more limiting than what there is right now,” she said, “because right now there’s nothing and yet even though conceivably by having no restrictions we have all the developer incentives in the world, there’s been no development in these neighborhood for 40 years except for [one project under construction now]. As we guide this, I know it is complex, because we are worried about pushing out the middle class. We’re worried about retaining families. We know what happens when it’s all second and third homes, what happens to our schools, what happens to our small businesses, it’s not good. They’re complex problems and we’re trying to solve all those.”
 
Rosen Gonzalez and Góngora both expressed concerns about proposed reductions in parking. People giving up their cars “is happening very slowly,” Góngora said. “I think we will get there but I don’t think it’s something that happens very quickly.” Proposed reductions “raise a red flag and a concern for us,” he told Staff.
 
The Committee asked for revisions to the proposed ordinance that reflect the concerns about unit size and parking. Rosen Gonzalez told Mooney, “Rethink this and make it more family friendly, encourage larger unit sizes, maintain current parking requirements.” She said she was looking for an ordinance that would allow for the development of North Beach while creating workforce housing, “something that could encourage more middle class, family developments,” she said. “Go back to Ana’s great presentation and statistics and come back to us with a picture that reflects what we need.”
 
Alemán also asked Staff to include comments from local developers and architects who have experience in the area and understand the constraints that have resulted in the lack of new development. “We want to get it right which is why I think it’s prudent to take the time to let Staff work on what they heard today,” she said. But, she also asked Staff to let the Committee know “when and if we’re straying from the Master Plan”.
 
Revisions will be presented at the Committee’s March meeting.
 
North Beach Town Center
The Committee then turned to discussing regulations for implementing the increased FAR (Floor Area Ratio or density) approved by Miami Beach voters for the North Beach Town Center, an area that spans the area from 69th to 72nd Streets from the west side of Collins Avenue to Bonita Drive.
 
Planning Director Tom Mooney outlined eight areas for the Committee to explore including a Town Center Overlay District with strategic increases in maximum allowable building height, modified setbacks and limits on height in areas with adjoining residential districts, separation requirements to prevent a continuous wall of buildings on 72nd street, lot aggregation that would allow for larger areas to distribute a higher FAR to avoid “awkward, boxy” buildings, a review of off-street parking requirements taking into account alternative transportation, and requirements for additional trees and shade canopy.
 
Góngora said he had concerns about increasing height where areas abut residential properties. With regard to setbacks, he said, “If we increase height, I don’t think we can reduce setbacks.”
 
Former Mayor Neisen Kasdin, who represents two developers in North Beach, said he thought 72nd Street was an area where setbacks aren’t as necessary. Referring back to an earlier reference to New York City, Kasdin said, “The Central Park analogy is actually very appropriate. 72nd is a pretty wide street. It doesn’t have a lot of traffic but it’s a wide street. The City of Miami Beach has unbroken public space from the Atlantic Ocean to Indian Creek between 72nd and 73d Street. This is the sort of grand park” allowing buildings to “go straight up” without setbacks. He noted he did not represent any of the properties on the street but wanted to make the point.
 
Rosen Gonzalez asked Staff to “Look at varied height, maintain some staggering and restrictive provisions, [with] taller buildings only in the center.”
 
Góngora concurred. “I like the idea of giving the height in the middle. I think it should scale down to some level of compatibility with the surrounding neighborhoods to the south and to the north where there are 40 feet and 50 feet respectively.” In areas where increases in height are allowed, he wanted to “talk about setbacks to not create a canyon effect” and “allow for perhaps bigger sidewalks and cafes”. He also said he wanted to increase the requirements for trees and shade canopies. With taller buildings, he said, “We need to make sure we have enhancements in our sidewalk canopies.”
 
Staff will propose a draft ordinance for the Committee’s consideration in March. Alemán emphasized the draft should be aligned with the North Beach Master Plan and that there would be more opportunity for public comment as the process moves forward.
 
 
 

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