2014-28793 Reso RESOLUTION NO. 2014-28793
A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH,
FLORIDA, ACCEPTING THE RECOMMENDATION OF THE NEIGHBORHOODS/COMMUNITY
AFFAIRS COMMITTEE AND DIRECTING THE CITY MANAGER TO UTILIZE TARGETED
MARKETING TO PRIORITIZE PLACEMENT IN THE LONDON HOUSE APARTMENTS AND IN
THOSE BUILDINGS ANTICIPATED TO BE ACQUIRED FROM MIAMI BEACH COMMUNITY
DEVELOPMENT CORPORATION, TO INCLUDE THE BARCLAY PLAZA APARTMENTS; LOTTIE
APARTMENTS; MADELEINE VILLAGE APARTMENTS; ALLEN HOUSE APARTMENTS; AND
NEPTUNE APARTMENTS; AND SPECIFICALLY TARGETING THOSE HOUSEHOLDS
EMPLOYED IN EDUCATION, PUBLIC SAFETY AND MUNICIPAL OCCUPATIONS AND EARNING
UP TO EIGHTY PERCENT (80%) OF THE AREA MEDIAN INCOME (AMI).
WHEREAS, the Neighborhoods/Community Affairs Committee (Committee) discussed
workforce housing at its May 30, 2014 meeting; and
WHEREAS, the Committee continued its discussion of workforce housing at its September 24,
2014 meeting specifically addressing eligibility by income groups; and
WHEREAS, on March 13, 2014, the City acquired the London House Apartments, located at
1965/1975 Washington Avenue, Miami Beach, Florida; and
WHEREAS, on September 9, 2014, the City entered into a Letter of Intent (LOI) to acquire the
following additional buildings from Miami Beach Community Development Corporation: property
located at 1940 Park Avenue, Miami Beach, Florida (Barclay Plaza Apartments); property located at
53075 th Street, Miami Beach, Florida (Lottie Apartments); property located at 7871 Crespi Boulevard,
Miami Beach, Florida (Madeleine Village Apartments); property located at 2001 Washington Avenue,
Miami Beach, Florida (Allen House Apartments); and property located at 1632 Meridian Avenue,
Miami Beach, Florida (Neptune Apartments); and
WHEREAS, the London House Apartments and the buildings which are the subject of said LOI
are the recipients of affordable housing funds from the U.S. Department of Housing and Urban
Development (HUD) funds; and
WHEREAS, HUD regulations require that beneficiary households may earn no more than 80
percent of area median income (AMI); and
WHEREAS, the Allen House Apartments, also anticipated to be acquired pursuant to said LOI,
utilized funding for Florida Housing Finance Corporation which restricts tenancy to elder residents
only and is not included in this targeted marketing effort; and
WHEREAS, the Committee recommended the provision of workforce housing for households
employed in the targeted professions of education, public safety and municipal occupations as having
the potential impact of promoting community stability and investment.
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby accept the
recommendation of the Neighborhoods/Community Affairs Committee and direct the City Manager to
utilize targeted marketing to prioritize placement in the London House Apartments and those buildings
anticipated to be acquired from Miami Beach Community Development Corporation, to include the
Barclay Plaza Apartments; London House Apartments; Lottie Apartments; Madeleine Village
Apartments; Allen House Apartments; and Neptune Apartments; and specifically targeting those
households employed in the professions of education, public safety and municipal occupations and
earning up to eighty percent (80%) of the area median income (AMI).
�a or
PASSED AND ADOPTED this day of 2014.
ATTEST:
RA AEL E. GRANADO, CITY CLERK P I 4E, MAYOR
:I�.!CORP ORATED:
APPROVED AS TO
'•• �� '',�� FORM & LANGUAGE
{�`9 '••....,.....• � & FOR EXECUTION
City Att rr ey Date
COMMISSION ITEM SUMMARY
Condensed Title:
1. A Resolution directing the Administration to open and market its waitlist for the London House
Apartments and the properties expected to be acquired from Miami Beach Community
Development Corporation to working households earning up to 80 percent of Area Median Income
AMI).
2. A Resolution directing the Administration to pursue the development of workforce housing for
households earning 120 to 140 percent of AMI and utilize targeted marketing to prioritize service
to households employed in education, public safety and municipal occupations.
3. A Resolution directing the Administration to explore the development of rental workforce housing
on the west side of the Convention Center Parking Lot (P-Lot) to benefit households employed in
education, public safety and municipal occupations earning 120 to 140 percent of AMI.
Key Intended Outcome Supported:
Ensure Workforce Housing for Key Industry Workers is Available in Suitable Locations
Supporting Data (Surveys, Environmental Scan, etc.):
38% of residents rate the availability of workforce housing as acceptable/the right amount.
Item Summa /Recommendation:
The Neighborhoods/ Community Affairs Committee held discussions regarding the definition,
development and use of workforce housing at its April 23rd, May 30th and September 24th meetings. At
its last meeting, the Committee generated three distinct motions regarding workforce housing.
The first motion directs the Administration to ensure compliance with HUD eligibility rules pertaining to
income, as recommended by the Administration. The second motion seeks to pursue the development
of workforce housing for households earning 120 to 140 percent of AMI and employed in education,
public safety and municipal occupations — populations typically ineligible for affordable housing
projects developed with federal funds.
i
The final motion seeks to explore the possible incorporation of workforce housing on the west side of
the Convention Center Parking Lot (P-Lot) to benefit households employed in education, public safety
and municipal occupations earning 120 to 140 percent of AMI.
Administration Recommendation
Motion#1 —Adopt the Resolution.
Motion#2—Adopt the Resolution.
Motion#3—The Resolution may impact the Convention Center project timeline and the Administration
is requesting direction from the Commission.
Advisory Board Recommendation:
A
Financial Information:
Source of Amount Account
Funds: 1 N/A
2
3
OBPI Total
Financial Impact Summary: No funds are being sought at this time.
City Clerk's Office Legislative Tracking:
Maria Ruiz/ Housing &Community Services
Sign-Offs:
Department Director Ass' ant City Manager Manager
MLR KGB JLM
A DA ITEM F7F
MIAMIBEACH -
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MIAMI BEACH
City of Miami Beath, 1700 Convention Center Drive,Miami Beach, Florida 33139,www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Philip Levine and Members of he City Com ission
FROM: Jimmy L. Morales, City Manager
DATE: October 22, 2014
SUBJECT: 1.A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
NEIGHBORHOODS/ COMMUNITY AFFAIRS COMMITTEE AND DIRECTING
THE CITY MANAGER TO UTILIZE TARGETED MARKETING TO PRIORITIZE
PLACEMENT IN THE LONDON HOUSE APARTMENTS AND IN THOSE
BUILDINGS ANTICIPATED TO BE ACQUIRED FROM MIAMI BEACH
COMMUNITY DEVELOPMENT CORPORATION, BARCLAY PLAZA
APARTMENTS; LOTTIE APARTMENTS; MADELEINE VILLAGE APARTMENTS;
AND NEPTUNE APARTMENTS; BY THOSE HOUSEHOLDS EMPLOYED IN
EDUCATION, PUBLIC SAFETY AND MUNICIPAL OCCUPATIONS AND
EARNING UP TO EIGHTY (80) PERCENT AREA MEDIAN INCOME (AMI).
2. A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
NEIGHBORHOODS/ COMMUNITY AFFAIRS COMMITTEE AND DIRECTING
THE CITY MANAGER TO PURSUE THE DEVELOPMENT OF WORKFORCE
HOUSING FOR HOUSEHOLDS EARNING ONE HUNDRED TWENTY(120)TO
ONE HUNDRED FORTY (140) PERCENT OF AREA MEDIAN INCOME (AMI)
AND UTILIZE TARGETED MARKETING TO PRIORITIZE PLACEMENT BY
THOSE HOUSEHOLDS EMPLOYED IN EDUCATION, PUBLIC SAFETY AND
MUNICIPAL OCCUPATIONS.
3.A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE
NEIGHBORHOODS/ COMMUNITY AFFAIRS COMMITTEE AND DIRECTING
THE CITY MANAGER TO EXPLORE THE DEVELOPMENT OF WORKFORCE
RENTAL HOUSING TO BE LOCATED ON THE WEST SIDE OF THE
CONVENTION CENTER PARKING LOT; AND FOR THE DEVELOPED
HOUSING TO BENEFIT HOUSEHOLDS EMPLOYED IN EDUCATION, PUBLIC
SAFETY AND MUNICIPAL OCCUPATIONS AND EARNING ONE HUNDRED
TWENTY (120) TO ONE HUNDRED FORTY (140) PERCENT AREA MEDIAN
INCOME (AMI).
ADMINISTRATION RECOMMENDATION
1. Adopt the resolution.
2. Adopt the resolution.
3. Given the timing of the Convention Center project, the Administration is seeking
direction.
October 22, 2014
City Commission Meeting
Page 2 of 7
FUNDING
No funds are being requested for this item at this time.
BACKGROUND
At the April 23, 2014 Commission meeting, Commissioner Michael Grieco referred a
discussion on workforce housing to the Neighborhoods/Community Affairs Committee.The
Committee addressed the topic at its May 30th meeting where it requested a broader
subsequent presentation including possible development examples, project sites, funding
sources and beneficiary populations. A third discussion was held at the Committee's
September 24th meeting discussing these broader topics.
ANALYSIS
Out of Reach 2094, an annual housing report by the National Low Income Housing
Coalition, reported that the national affordable housing wage(the income at which a person
can afford a modest rental unit in his/her work market) is $18.92 per hour (or $39,353
annually). In South Florida, the affordable housing wage is $19.39 per hour (or $40,331
annually). Unfortunately, the typical Florida renter only earns $13.73 per hour(or$28,558
annually).A Florida family working at minimum wage would need 2.4 full-time wage earners
to afford a modest, two-bedroom apartment, according to the report.
Many of our community's service industry jobs fall short of the affordable housing wage
threshold including':
• Restaurant wait staff($18,000) •Valets ($17,000)
• Pool attendants ($23,000) • Tow truck drivers ($32,000)
• Retail sales associates($21,000) • Retail managers ($31,000)
1 Median wage information provided by www.salary.com
Many other critical community jobs barely cross the affordable housing wage threshold
including2:
• Teachers ($40,500) • Police Officer(($45,139)
• Firefighter($44,253) • Municipal Service Worker 1 ($43,377)
• Museum Guards ($39,919) • Recreation Attendant($38,757)
• Recreation Leader 1 ($43,377) •Waste Collector($47,132)
• Restaurant Managers (($43,000)
2 Median wage information provided by www.salary.com and City of Miami Beach
Workforce housing serves those key workforce classifications that drive an area's economy.
In Aspen, Colorado,considered the birthplace of the modern workforce housing movement
and one of the country's most affluent communities, the Aspen Area Community Plan set a
goal of housing 60 percent of its workforce within its city limits in the early 1990s. Aspen
further revised its goals in 2000 seeking to build up to 1,300 new employee housing units. It
should be noted that the median price for homes in the area top $1 million.
Palm Beach County, which employs a variety of tools to increase workforce housing
development, defines its workforce housing beneficiaries as "people employed in the jobs
that the general population of the community relies upon to make the community
economically viable." Furthermore, its "Workforce Housing Program" units are offered to
October 22, 2014
City Commission Meeting
Page 3 of 7
qualified households with incomes from 60 to 140 percent of Area Medium Income(AMI)". In
Palm Beach County, the 2014 median income is $63,300 for a family of four. Household
income ranges for a family of four eligible for workforce housing can vary from$37,980(60%
of AM I)to $88,620 (140% of AM I).
In New York City,a$350 million loan pool has been created to retain and develop affordable
housing for low-and middle-income residents with a focus on households with extremely low
income. This is the first initiative in a broader 10-year effort to commit$8.2 billion in public
funds to create 80,000 new units and preserve 120,000 existing units of affordable housing,
according to The New York Times. The public funds are expected to be leveraged by up to
$30 billion in private funds.
One of the critical economic decisions that must be made at the onset of a workforce
housing initiative is to determine the income levels of those to be served.While many of the
City's entitlement funds can be used to develop workforce housing, the income limits for
United States Department of Housing and Urban Development(HUD)and State Housing
Initiatives Program (SHIP) funds are capped at 80 percent and 120 percent of AMI,
respectively. Here are the income level limits for people helped with HUD funds:
Median 2 3
FY 2014 Income Limit Category i 4 Person
Income Person Person Person
Very Low(50%) Income Limits [$23,800 $27,200 $30,600 $34,000
Extremely Low (30%) Income
$48,400 Limits $14,300 $16,350 $18,400 $20,400
Low (80%) Income Limits $38,100 $4� 3,550 $49,000 $54,400
In addition, SHIP requires that a minimum of 30 percent of its funds be earmarked to benefit
households with very low income(50 percent of AMI). Therefore,the ultimate beneficiaries
will determine which funding sources can be utilized to develop workforce housing.
If we were to follow a similar model to Palm Beach County establishing greater income
thresholds to 140 percent AMI and not rely on HUD funds, our City's household income
limits would rise and the base income limits would become:
60% of AMI 100% of AMI 140% of AMI
$29,040 $48,400 $67,760
As with all real estate, availability, location, size and amenities are driving forces in
determining development costs. The very limited availability of property available for multi-
family development combined with the need to build "up" as opposed to "out" drives up
costs. One way to redress this is to develop mixed used projects that incorporate other
public or community needs as a means of reducing overall cost by firstly addressing
acquisition. These mixed use projects may include:
• Public parking (to provide additional public and resident parking)
October 22, 2014
City Commission Meeting
Page 4 of 7
Libraries and similarly purposed public-use facilities (to deliver services to
under-served areas)
Transportation hubs(to promote public transportation and incorporate mass
transit features within residential areas)
Retail stores (to increase commercial opportunities for residential areas
whose residents may have limited transportation as well as employment
opportunities for residents)
Grocery stores(to eliminate food deserts and better improve accessibility for
those relying on public transportation)
Home ownership opportunities (to promote neighborhood investment and
community stability)
As with residential developments in the private marketplace, amenities help lure and retain
tenants. Many amenities are relatively low in cost including:
• Sun decks and barbecue grills • Community event space
• Landscaping to improve curb appeal • Energy-efficient appliances
• On floor laundry rooms • Onsite recycling and bicycle racks
• Ceiling fans and window tinting - Large closets (in-unit storage space)
• Pet-friendly screening policies
While other amenities add to construction costs and may not be eligible for reimbursement
by affordable housing funding sources:
• Onsite parking • Swimming pools
• Onsite security • Gym/exercise rooms
• Tot lots/ la rounds • Business centers
F- Balconies • Storm windows and hurricane shutters
Aside from regulating amenities, funding sources may also cap the amount available for
construction.The maximum HUD subsidy limits for buildings with elevator construction in our
area are:
Maximum HUD 0 BR 1 BR 2 BR 3 BR_4
Unit Subsicf 3 $127,279 $145,907 $1771422 $229,526
3 Please note that these construction subsidy limits are to benefit households earning up to 80 percent of AMI.
As an entitlement community, the City receives funds to develop and retain affordable
housing. These funds include:
• HOME Investment Partnership (HOME)
• State Housing Initiatives Program (SHIP)
• Community Development Block Grants (CDBG)
The entitlement funds above are awarded to the City based on formula and must benefit
households earning up to 80 percent of AMI (or a maximum household income of$54,400
for a family of four). The City can also directly pursue additional federal funds serving these
same households including:
• Section 108 Loan (secured by the City's future HUD allocations)
• Economic Development Initiative Grant(competitive grant)
October 22, 2014
City Commission Meeting
Page 5 of 7
While income limits of up to 80 percent of AMI may apply, the City can also pursue funds
through competitive grants from:
• TD Charitable Foundation
• Florida Community Loan Fund
• Florida Housing Finance Corporation
• Miami-Dade County Surtax Loan
• Miami-Dade County HOME Investment Partnership
• Tax-exempt bonds
• State Apartment Incentive Loan (SAIL)
The City can also finance construction via traditional mortgages that would be repaid from
tenant rents or mixed developments that include the sale of units as a means of promoting
home ownership in the community and thus potentially eliminating constraints on household
income limits.
Furthermore,the City can issue a Request For Proposals(RFP)seeking private investment
to develop workforce housing in conjunction with the development of other public services,
i.e. parking. Such partnerships can be further promoted via a variety of incentives to spur
development including:
• Allowing Accessory Dwelling Units(in conjunction with single-family homes
so as to create adjunct housing units)
• Adaptive Reuse(converting outmoded buildings such as hospitals,factories,
train stations, etc.)
• Commercial Linkage (requiring commercial and industrial developers to
either build or fund housing in conjunction with proposed commercial
developments)
• Density Bonuses(offered in exchange for the inclusion of workforce units in
a development project)
• Waiver or Reductions of Impact Fees (one of the most commonly used
tactics
• Inclusionary Zoning(portion of constructed units are set aside for affordable
homeownership)
Finally, in some communities, crowd sourcing is being used as a viable capital tool. In
Washington, DC, a community that struggles to house its workers within city limits, a local
developer has coupled the influence of the Internet with the American dream to own property
to sell shares in properties located in distressed neighborhoods. Many of the investors are
long-time residents of the area who would otherwise never see themselves as investors--let
alone property owners. While this approach is new in our country, it has been in place for
several years in England where the high cost of property is a barrier to homeownership for
many.
Each sector of our community faces its own set of development challenges. In South Beach,
there are very few parcels of available land. Most of the available parcels have development
plans and those remaining are too small to create meaningfully impactful developments.
Acquisition costs will be significant because of market demand.
In Middle Beach(excluding the Collins Avenue corridor which is almost fully developed),the
neighborhood's single-family focus and limited multi-family developments make it
challenging to develop projects that provide significant impact while also folding into the
October 22, 2014
City Commission Meeting
Page 6of7
surrounding neighborhood. This area is excluded from use of HUD funds because its
census tracts significantly exceed 120 percent AMI.
North Beach offers the best opportunity to pursue workforce housing developments despite
its increasing acquisition costs.The area's current multi-family developments,lower income
households and deteriorating housing stock combine to offer the best opportunities for
meaningful new developments while also offering an opportunity for greater area impact, i.e.
creating jobs,addressing infrastructure gaps,addressing the food desert,spurring additional
investment, etc.
With land scarcity impacting plans,there are inherent economies of opportunity when pairing
the development of workforce housing with the development or expansion of critical
community services. While parking is the most obvious pairing, there are several others:
• Municipal annex • Child care center
• Urban footprint grocery store • University/college campus
• Intermodal center • Commercial and retail stores
• Cultural programming space • Community center
As with any development,a survey of community needs and an assessment of development
impacts should be conducted to ensure that projects fulfill a community purpose,serve as a
catalyst for additional investment,and/or add to the overall character and sustainability of the
neighborhood.
When the preceding information was provided, the Neighborhoods/ Community Affairs
Committee held a discussion and generated the following three motions:
Motion #1 — Direct the Administration to open and market its waitlist for the London House
Apartments and the five properties expected to be acquired from Miami Beach Community
Development Corporation to working households meeting the U.S. Department of Housing
and Urban Development(HUD)definition of income eligible earning up to 80 percent of Area
Median Income (AMI). AMI for our area is currently$48,400 per year.
Motion #2— Direct the Administration to pursue the development of workforce housing for
households earning 120 to 140 percent of AMI and utilize targeted marketing to prioritize
service to households employed in education, public safety and municipal occupations.
Motion #3 — Direct the Administration to explore the development of rental workforce
housing on the west side of the Convention Center Parking Lot(P-Lot)to benefit households
employed in education, public safety and municipal occupations earning 120 to 140 percent
of AMI.
At the Committee presentations, the Administration discussed the London House
Apartments and the five properties currently owned by Miami Beach Community
Development Corporation (MBCDC)for which the City has a Letter Of Intent to purchase.
Currently,all of these properties have utilized HUD funds for acquisition and or rehabilitation.
As a result,they must house households whose income does not exceed 80 percent of AMI.
The Committee members affirmed the need for compliance with the HUD income limits for
the London House Apartments and those properties anticipated to be acquired from
MBCDC. Furthermore, the Committee directed the Administration to target income-eligible
persons employed in the education, public safety and municipal industries when the City
officially opens a tenant wait list for these properties. Targeted outreach is an allowable
October 22, 2014
City Commission Meeting
Page 7of7
strategy.The Administration expects to undertake the opening of a waitlist within 90 days of
the closing of the five properties under LOI to.purchase. Targeted marketing can be
employed to ensure that emphasis is placed on the workforce sectors noted.
As to the income threshold for workforce housing,communities throughout the country have
defined income eligibility in many different ways. The Committee's suggestion places an
emphasis on households earning greater than the AMI and, specifically,those employed in
the education, public safety and municipal industries.The higher AMI threshold, 120 to 140
percent,will preclude the use of HUD funds forthese households. Funding for this effort may
be pursued via public/private partnerships and private financing.
In addition, as mentioned at the September 24th meeting,the City may pursue the buyout of
any HUD-or State-assisted funds invested in an affordable housing project(an approach for
which we have not found local precedence). However, please note that doing so would also
trigger the Universal Relocation Act and its relocation provisions for any tenant currently
residing in these units.Therefore,while the City may reimburse affordable housing funds in
some instances and reverse the affordable housing restriction on a property, it must also
provide relocation assistance to affected tenants equivalent to 42 months' rent plus
relocation expenses. This last approach is quite costly and can take up to a year.
As to the Committee's final motion of exploring the incorporation of rental workforce housing
on the west side of the Convention Center parking lot, the current timing and anticipated
benchmarks for the Convention Center project may be adversely impacted by such a pursuit
at this time. Therefore, the Administration would need further direction on this point.
CONCLUSION
The Administration encourages compliance with HUD tenancy rules for the London House
Apartments and the five properties anticipated to be acquired from MBCDC.Therefore,the
Administration recommends the adoption of Motion#1.The City will need to create a tenant
waitlist shortly after the final acquisition .of these properties and the completion of the
rehabilitation of the London House Apartments. The Administration is prepared to utilize
target marketing to prioritize working households in the education, public safety and
municipal industries, if directed.
The Administration recommends adoption of Motion #2 to pursue the development of
workforce housing for households employed in the education, public safety and municipal
industries and earning 120 to 140 percent of AMI. Such exploration should include industry
review meetings and the possible pursuit of public/private opportunities.
Finally, Motion #3, the exploration of the development of rental workforce housing on the
west side of the Convention Center Parking Lot(P-Lot)to benefit households employed in
education, public safety and municipal occupations earning 120 to 140 percent of AMI, may
impact to the Convention Center project timeline and the Administration is requesting
directh
iffrom the Commission.
JLM/K MLR
T:\AGENDA\2014\October\Neighborhoods Committee Workforce Housing Motions.doc