Zoning is the key to solving Miami’s housing crisis: Opinion

Southeast Florida’s elected officials can improve housing affordability for hundreds of thousands of residents. The problem is not too big, and the solution that I believe does the most good for the most people is not unique or complicated. It is simply market-rate supply.

Furthermore, massive amounts of supply can be created in buildings that are little (or no) taller than the small urban apartment buildings we love in neighborhoods like South Beach and Little Havana. It can be done with apartments of conventional sizes, not “micro-units.”

Southeast Florida’s affordability problem is massive, affecting hundreds of thousands of households paying more than 30% or even 50% of their income for housing costs. The problem affects many lower-income households, but it is spread throughout all income levels. I think the problem is caused mostly by employers knowing they don’t need to pay people more to move to Miami; people will keep moving here for other reasons. But obviously housing-cost burden is also caused by housing costs themselves.

To address this problem, there are many tools in the toolbox, including — but not limited to — Section 8, low-income housing tax credits, and Affordable Housing trust funds. Federal, state, and local government leaders should continue these programs and expand them.

But if we want to do the most good for the most people, then what should be the centerpiece of our affordability strategy? Government at every level has limited resources and thus limited ability to give subsidies (or forego tax revenue) to generate rent-controlled housing. For example, the 9% low-income housing tax credit program is limited by state law to three developments in Miami-Dade County per year; those projects average around 100 units, resulting in 300 units per year. If 300,000 households in the county are cost burdened (I believe it is more), what message does that send to the other 299,700 households?

The only tool that can hope to work on the same scale as the problem is non-rent-controlled (“market-rate”) supply. Low supply causes scarcity that drives up prices. Don’t take my word for it; I encourage you to read the White House Housing Development Toolkit from 2016 and the California Legislative Analyst’s Office report from 2015. Housing is scarce and unaffordable not because of real estate developers. A real estate developer will build every single unit of housing that she can. This is not a bad thing; it is a tool to unleash in service of housing affordability.

The real problem is local government zoning. As an example, let’s look at one zoning category in one city: zoning for three-story apartment buildings (“T4”) in the City of Miami. About 1,000 acres of the city is zoned T4, mostly transition areas between single-family houses and taller apartment buildings. The vast majority of lots in the city are around 5,000 square feet. On such a lot, T4 would allow only four apartments (36 units per acre). Compare that to the beloved small apartment buildings of South Beach and Little Havana that have 10 or 15 apartments on a single lot.

Changing T4 to allow new, small three-story apartment buildings to be divided into eight units (72 units per acre) instead of four would create 36,000 units of new housing capacity, but would not require a single additional square foot of development rights and would not cost the public sector (and taxpayers) a single penny to build. What does a new three-story, eight-unit development on 5,000 square feet look like? Not coincidentally, exactly like my latest project at 761 NW First St. in Little Havana.

Now multiply this thought experiment over every zoning category in every city in Southeast Florida. We could easily create 300,000 new market-rate housing units, which would put 10 times more downward pressure on housing prices across the board than all government subsidy and tax credit programs combined.

Massive housing supply in contextual buildings that do not cost taxpayers a penny and create more housing affordability than all other policies combined … this vision is as real as 761 NW First St. Now that we know housing affordability is within reach, are we willing to right-size density in our zoning? And if we do not act, who wants to deliver that news to our suffering neighbors?

Andrew Frey, founder and principal of Miami-based Tecela, is a real estate developer, educator and lawyer.