South Florida Collective Combats Gentrification in Palm Beach

South Florida Collective Combats Gentrification in Palm Beach

By: Sara Warden

 

2 min read November 2019 — As the 2018 federal tax code kicks into effect, capping deductibility of state and local taxes, demand has skyrocketed for luxury real estate in low-taxing states such as Florida. In the third quarter of 2019, the median price for a luxury home in Palm Beach tripled on the year to $21 million compared with $7.7 million in the same quarter of 2018.

As luxury house prices increase, single family and condo prices are also going up, according to a report by real estate appraisers Miller Samuel. In 3Q19, average sales prices for a condo reached $418,849, up 4.4% on 3Q18, and for a single family home the average price was $11.4 million, up 121.6% on the year. Tellingly, average price per square foot was up across the board, at $1,468/ft2 for a single family home during the quarter compared with $1,363/ft2.

The area is quickly gentrifying, with the Virgin Trains USA express service that runs through the county also pulling up house prices and pushing down affordability. In this environment, creating affordable housing for the residents of Palm Beach becomes ever more pressing. Now, the public and private sectors are joining forces to take action and create the South Florida Housing Link Collaborative, an ambitious affordable housing project. 

The project will target the route of the Brightline, deploying a $5 million investment by JP Morgan Chase to upgrade existing units and build new, more affordable accommodation. “Transport is the biggest expense after housing,” said Mandy Bartle, executive director of the South Florida Community Land Trust (SFCLT), to the Miami Herald. “We decided to hone in on this corridor because the people who most need public transit are a lot of the folks who already live in these areas near the railway and are the most likely to get pushed out by gentrification.”

As well as the $5 million in direct investment in the project, it is expected to garner $75 million in external capital from both the public and private sectors. Joining the SFCLT is the Community Land Trust of Palm Beach County, nonprofit Enterprise Community Partners, Florida Community Loan Fund, and the Solar and Energy Loan Fund (SELF). SELF provides small loans to homeowners for solar energy or hurricane-resilience technologies, providing $10 million worth of loans in their 10 years in business.

Duanne Andrade, the chief financial officer at SELF, said in an interview with Next City that those living on the path of new transit projects are often the most vulnerable to gentrification. Cindee LaCourse-Blum, executive director of the Palm Beach County CLT, added that climate change compounds the problem. 

“Housing and transportation eats up the majority of incomes in Palm Beach County, in addition to the risks that we are seeing with climate change and sea-level rise and a lot of people coming back into the urban corridor and gentrifying those neighborhoods,” she said to the same publication. “What I’m hoping to see is that residents of these communities have access to safe, affordable, resilient housing, and they’re not pushed out of their neighborhoods.”

 

To learn more about our interviewees, visit:

http://southfloridahousinglink.org/

https://www.millersamuel.com/

https://southfloridaclt.org/

https://cltofpbc.org/

https://www.enterprisecommunity.org/

https://fclf.org/

https://solarenergyloanfund.org/

Miami Working to Solve Affordable Housing-New Talent Conundrum

Miami Working to Solve Affordable Housing-New Talent Conundrum

Writer: Sara Warden

2 min read September 2019 As business hubs grow, the private sector must attract more talent to the area. But the Catch 22 for the government is that, as more people come, the more neighborhoods gentrify and the less affordable housing is available. Given this reality, how can Miami’s thirst for new talent be maintained? Through inventive new tax incentives, according to the city and state governments.

Since 2012, Miami-Dade’s population has been growing at a steady rate of about 1% per year, but the cost of living in Miami is well above the national average. According to Best Places, which ranks U.S. cities in relation to a national average of 100, Florida scores 110.9 and Miami 137.1. The cost of housing in Miami is by far the biggest expense, coming in at a whopping 174.3 to the US average of 100.

The median home cost in the United States is $219,700, while in Florida it is $225,200 and in Miami the number stands at just over $350,000. But Miami’s GDP is projected to stay strong, with GDP per capita set to increase to $49,293 by 2022 from today’s $48,601 despite a steadily growing population.

One reason for this is the state of Florida’s attractiveness as a workplace. It has a 6% sales tax on items bought, but there is no personal income tax on earnings, although federal income taxes still apply. However, this means that a Floridian earning $30,000 per year would not owe any of this to the state in personal income tax, while a New Yorker earning $30,000 per year would take home around $28,837 per year after paying state income taxes.

Florida’s corporate income tax rate also comes in at the lower end of the scale, especially in comparison to other major cities. At just 5.5%, it is lower than New York at 6.5%, California at 8.84% and Illinois at 9.5%. “Hedge funds and finance firms in places like New York, Chicago and California are feeling the burden of operating in high-tax states,” said Nitin Motwani, managing director of Encore Housing Opportunity Fund, to the New York Post.

This seems to be one reason why billionaire investor Carl Icahn this month announced his company would be moving from New York to Miami. But more than this, over half of his employees decided to move with the company, receiving a $50,000 relocation benefit each.

Icahn’s company will be moving to Magic City, in Little Haiti. As the name would suggest, the area was built on an influx of immigrants and refugees coming from Haiti in the 1970s. Now, with the $1 billion Magic City development, the neighbourhood is gentrifying fast. “Even if Magic City did not come today, the pace of gentrification is so rapid that our people will not be able to afford homes here anyways,” Marleine Bastien, a community organizer, told CNN. “Magic City is not the government. Affordable housing policies have to come from the government.”

Miami’s Mayor Francis Suarez is facing the issue head on. He championed the $400 million Miami Forever bond, designed to make Miami living sustainable. “We actually created in our first tranche of Miami Forever, a sustainability fund for people to renovate their homes so that they can stay in their properties rather than having to sell their properties,” he told CNN. So far $15 million has been allocated to these purposes.

Another development is a public-private partnership between Pinnacle Housing Group and the government to build Caribbean Village in South Miami Heights, which will have 123 units for older residents, with rents ranging from $420 to $1,070 per month. The need for that housing is more acute today than ever, and it’s exciting to be delivering Caribbean Village to the residents of South Miami-Dade County,” said David Deutch, co-founder and partner at Pinnacle, to Miami Today News.

To learn more about our interviewees, visit:

https://carlicahn.com/

https://www.encorecm.com/

https://www. pinnaclehousing.com/

https://www.miamigov.com/Government/City-Officials/Mayor-Francis-Suarez

Atlanta’s Westside: Where Opportunity Meets Walkability

By Sara Warden

 

2 min read September 2019 — There are 26 qualified Opportunity Zones in the city of Atlanta, with the majority of them running down west of the I-75 in the city’s Westside. The qualified Opportunity Zones were born from a fiscal effort to drive private business into low-income communities. But it is more than just tax incentives that make Atlanta’s Westside one of the city’s fastest-gentrifying areas.

“There is demand,” Avison Young Principal Casey Keitchen told Bisnow. “There’s way more capital chasing qualified Opportunity Zone deals than there are qualified Opportunity Zone deals.”

This week, the Arthur M. Blank Family Foundation awarded a $17.5 million grant to Atlanta BeltLine Partnership to support development of Westside Park. The 280-acre park is slated to be the largest greenspace in Atlanta when it opens, with the first phase set to be inaugurated in 2020. The donation will be combined with $26.5 million from the city.

“Westside Park is a transformational project that will set an exciting new precedent for greenspace development across Atlanta,” said John Dargle, Jr., Commissioner for the city’s Parks & Recreation department in an interview with Atlanta Daily World.

According to Arthur M. Blank, Chairman of The Arthur M. Blank Family Foundation, the aim of the project is to create a community in an area that did not have the facilities to do so. “We want these Westside communities to feel like this is their park where residents, neighbors, and visitors are connecting and gathering because that is when Atlanta is at its very best,” he told Atlanta Daily World.

In the last few years, private developers have flocked to the area to take advantage of the qualified Opportunity Zone, among other features. 

“Westside is all the rage creative office. That makes sense,” Banyan Street Capital Principal Taylor White told Bisnow. “It makes a lot of sense for Opportunity Zone investors to go to that market.”

The magic of the Westside is that it is the point of crossover between most qualified Opportunity Zones and the Atlanta BeltLine project, meaning this real estate is worth its weight in gold. It can offer easy mobility, green spaces, social spaces and entertainment. Added to this is the Westside’s easy access to educational facilities, in particular Georgia Tech, which means that for developers, the sky is the limit. 

One developer that saw opportunity in the area is CrossStone Management, a firm that purchased several land parcels and is now looking to build retail, residential and commercial space. “I was attracted to the areas before Opportunity Zones were even discussed,” said the firm’s founder, Greg Todey, to Bisnow.

 

To learn more about our interviewees, visit:

https://beltline.org/about/the-atlanta-beltline-project/atlanta-beltline-overview/

https://blankfoundation.org/

https://www.atlantaga.gov/residents/parks-recreation

http://www.banyanstreet.com/