Over the last decade, Miami’s skyline has transformed. Where once there was only a handful of tall buildings, skyscrapers now crowd the horizon, standing alongside cranes promising more construction of buildings reaching taller heights.
Even while standing in awe at the feet of these striking symbols of economic growth and progress, I can’t help but pause and wonder, how much of this development is for me? As Miami matures, is it actually building housing for the people currently living here and the workforce that is the backbone of our economy, or is it only geared towards luxury dwellers, foreign investors and Airbnb tourists?
These questions reflect the current imbalance in housing supply and demand. According to data from the Florida International University Metropolitan Center’s Miami-Dade Prosperity Initiative study, 61 percent of Miami-Dade County renters and 42 percent of homeowners are pay more than 30 percent of their income on housing – making this one of the most unaffordable housing markets in the United States. Steadily rising home prices and skyrocketing rents, combined with flat or falling wages, are pushing more and more families into extreme financial insecurity. The costs continue to rise because while we have a local economy that cannot afford the prices, we have an international housing market demanding more.
So, how do we tip the scales back? How can we make housing permanently affordable?
First, we must find ways to lower the price of real estate. From a purely mathematical perspective, we have to adjust the costs (property acquisition, plus construction, plus profit) to align with what locals can afford. Second, once property becomes affordable, we must find ways to keep it affordable. Every year, we lose homes that were once affordable to working-class families as they are redeveloped as luxury homes or simply consumed by the surrounding market.
The South Florida Community Land Trust is protecting the affordability of our market. The community land trust model preserves permanent affordability by separating the ownership of land from the home that sits on it; the community retains ownership of the land, and homes are sold (or at times rented) to individuals at an affordable price.
It’s an effective solution, but the process of acquiring property for a community land trust can be complex and competitive — and in a hot market like Miami-Dade, that requires agile sources of funding. That’s why South Florida Community Land Trust has also launched the first acquisition fund in the country dedicated to securing new property for permanent affordability. This “South Florida Community Land Trust Accelerator Fund,” launched with early-stage support from Citi Community Development, enables us to compete in this high-cost, cash-driven market — something few local nonprofits can do — by providing a source of cash for acquiring vacant land, land that is currently affordable but is about to go market-rate, or land that is underutilized.
Our local cities and counties are also playing their part, creating local funds to fill gaps, including the new passage of $100 million bond by the City of Miami to leverage with existing federal, state and local sources.
Meanwhile, Fannie Mae, as part of its plan to boost affordable homeownership over the next three years, has increased its own internal targets for financing “shared equity loans” — the kind of mortgages that families need to take ownership of a home built on a community land trust. That’s a huge signal to lenders across the country, taking a lot of the risk out of the equation for lending to homeowners on community land trusts.
As more cities are starting to engage community land trusts as a core part of their housing affordability strategy, this accelerator fund model we launched here in Miami is going national. Last week, Grounded Solutions Network, with support from Citi Community Development, launched a national community land trust accelerator that will provide vital technical assistance, digital learning and in-person trainings, funding and local policy support to community land trusts around the country, enabling them to scale up and achieve impact.
In a year that marks the 50th anniversary of the Fair Housing Act, the local and national community land trust accelerator funds, both launched through the support of Citi Community Development, are examples of how the public and private sectors can work together to scale up innovative approaches to building more financially inclusive cities. Together, we can grow our economy and skyline in a way that ensures that individuals and families can afford to stay in our market.
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our monthly Bottom Line newsletter. The Bottom Line is made possible with support from Citi Community Development.
Mandy Bartle is executive director of the South Florida Community Land Trust.