Dade Miami To Focus On Affordable Rental Housing With Rescue Dollars
Written by Risa Polansky on November 13, 2008
By Risa Polansky
Creating more affordable rental housing is to be a key priority for Miami-Dade County and the City of Miami in spending the tens of millions of dollars the federal government is sending their way to help reverse the national foreclosure crisis.
Plans for the Housing and Economic Recovery Act money — the county’s $62.2 million and the city’s $12.06 million — are due to the US Department of Housing and Urban Development by Dec. 1.
The funds, which are to impact only a fraction of local foreclosed units, are meant to provide a shot in the arm to low-income areas hit hard by foreclosures.
In Miami, this means affluent Brickell is out, but areas such as Little Haiti, Overtown and Allapattah are to receive a big chunk of the program’s millions.
Miami-Dade’s share is to be used in various areas of the county — including the Model City area and southern portions of the US 1 corridor — but cannot be spent within cities such as Miami, Hialeah and Homestead, which are to receive their own funds, said Clarence Brown, the county’s director of housing asset management.
The county’s proposal for use of the funds, which still needs commission approval, shows plans to devote about $26.6 million toward acquiring and rehabilitating foreclosed-upon multi-family properties to use as affordable rental housing; about $9.75 million toward soft mortgage assistance and closing costs; $10 million toward acquiring and rehabilitating foreclosed-upon single family homes; $65,000 to homebuyer counseling; $8.6 million toward neighborhood redevelopment through multi-family housing development; $1 million to demolish blighted structures; and up to about $6.2 million for administration and planning.
"The allocations were based on information we received from various groups we work with, including county departments, non-profits, for-profits, banks. We had a lot of our affordable housing partners at the table," Mr. Brown said. "We believe we were hearing loud and clear that there should be an emphasis on making sure multi-family rental opportunities are available."
The money the federal government has promised the City of Miami to ease its foreclosure epidemic is largelyearmarked to buyforeclosed and abandoned properties for renting or selling, said George Mensah, Miami’s director of community development.
In the city’s proposed action plan, about $4.5 million would go toward buying residential buildings and multi- and single-family homes to use primarily for rental.
About $2.1 million could be spent on establishing financing mechanisms to help individuals buy foreclosed properties through equity sharing or down payment assistance programs.
Miami could also invest $2.8 million in establishing land banks for foreclosed homes, meaning the city purchases such properties and holds onto them until the market is favorable to sell, Mr. Mensah said.
About $700,000 could go for demolishing properties too costly to fix up, and $706,000 toward building new homes on those empty sites.
Another $1.2 million is set aside to cover administration costs.
"We are looking at all the strategies to see which are most needed in the community," Mr. Mensah said.
As part of its plan, the city intends to acquire residential towers, make needed repairs and put them up for rent. Residents should be able to begin applying for the program by January or February, he said.
In the meantime, community development officials are strategizing how to invest the funds fairly among the areas in need.
But with the money comes time restraints.
The governments must get commissioners’ blessing on the proposed action plans, then submit them to the US Department of Housing and Urban Development by Dec. 1.
Once the programs get the OK, the governments have 18 months to commit the money and four years to spend it.
Program guidelines require foreclosed or abandoned properties to be purchased at a 15% discount of the appraised values — to be done within 60 days, Mr. Mensah said.
When the city goes into the local real estate market asking for discounts, he said it has to compete with the other offers of other prospective home buyers.
"So if the lender is getting a higher value, (he or she) may not want to negotiate with us."
For the abandoned properties, Mr. Mensah said one concern is locating the owners.
With money and time constraints a constant worry, he said the city plans to work with developers and non-profit agencies with expertise and capacity to make the best real estate deals for the city.
To ensure efficiency, the city’s community development department is going to hire two additional staffers, and on a temporary basis, a real estate and banking expert to act as project manager, he said.
At the county, "we’re probably looking at a combined approach of utilizing existing staff but also utilizing some outside sources," Mr. Brown said, especially when it comes to expediting the plan.
"If we fail to obligate the funding, then we run the risk of losing the funding," he said. "And that’s certainly not acceptable."