One possible solution for creation of affordable home ownership
LETTER TO THE EDITOR
Part 2 of Andy Parrish's issues regarding Coconut Grove housing:
As much as we all like to think the T3 R (single family residence SFR) and T3 O (duplex) transects should never be “up-zoned,” maybe we should examine that possibility. Because of the well documented “Housing Affordability Crisis in Miami,” perhaps we should at least consider the following possible way to produce more homes for ownership by low-to-moderate income families in Coconut Grove (especially in NCD 2 but also in NCD 3). To do so, we would have to reconsider a new version of the planning tool known as PUD’s (Planned Unit Developments).
Blue Water Workforce Housing/photo courtesy Blue Water
Consider St. Hugh Oaks and Lemontree developments in NCD 3, which technically were Condominiums not PUDs and which also are not even close to as dense as the “mini-PUDS” being considered here. More to the point is DPZ’s recent Blue Water “Workforce Housing” development in Tavernier.
There are also a few small older apartment buildings scattered throughout the T3 R single family neighborhoods of all sections of the Grove that are compatible with their single-family home neighbors. All of these suggest “cluster homes” and “Courtyard cottages” as a possible avenue for redevelopment of T3 R and T3 O assembled lots comprising as little as 25,000 sq. ft. of land but only in neighborhoods that want and agree to have such low-rise housing built.
HOW COULD THIS BE POSSIBLE? First assume that there might be funding for land acquisition from the City, or County, or State, or CRA, or “Community Benefits,” or wherever. Then assume:
1. These funds could ONLY go to a neighborhood Land Trust (or possibly some other trusted and established not-for-profit entity).
2. The land where the PUD units would be built would be owned in perpetuity by the Land Trust.
3. The “cluster” units built in the PUD would be sold—NOT rented-- to existing residents by providing “Soft 2nd” mortgages to bring the PITI (Principal, Interest, Taxes and Insurance) down to “the equivalent of rent.”
4. The newly created homeowner families could sell their units, say, after 10 years, thereby allowing them to share in the neighborhood’s overall long-term appreciation which they helped to create, BUT the profit on any sale would be divided with the Land Trust so that more land could be acquired for more PUD type developments.
WHY WOULD THIS REQUIRE A LAND TRUST? Increasing the density is what dilutes the cost of land and why developers always are seeking to “up-zone.” By re-establishing PUD’s—but with the “Land Trust Only” safeguard against speculative “spot zoning” —it makes new one and two-story “cluster/courtyard” homes possible for low to moderate income families again. True long-term Affordable Housing for existing neighborhood residents becomes possible, while allowing these families to participate in the overall neighborhood appreciation caused by stable homeownership (The co-op model may be preferable over condominium because administration is then usually done co-operatively by the homeowners themselves).
WOULDN’T THIS PLAN REQUIRE HUGE PUBLIC SUBSIDIES? Depends on how you define “huge.” Once you get past the heated questions about whether anyone should get taxpayer money and how much, certainly there would have to be public funding to buy the land at Fair Market Value from private owners. In addition, the “Soft 2nd Mortgages” at 1% interest only for 10 years requires public funding, but non-taxable bonds these days don’t pay much more than 1%. Furthermore, when one considers the immense amount of public funding that already subsidizes the Section 8 rental program, creating more homeownership units may repay the taxpayers in many tangible and intangible ways because of the stabilizing effect of homeownership. Diverting any Section 8 rental funding to subsidizing homeownership would be, to say the least, difficult.
WHY HOMEOWNERSHIP INSTEAD OF SECTION 8 RENTALS? As a practical matter, this idea of introducing more density into existing established SFR and Duplex transects is radical enough by itself even to have a chance for passage by the City Commission. It is undeniable that homeownership tends to be stabilizing and beneficial for neighborhoods in ways that rental units are not, especially when the new homeowner is required to make a $3,000 down payment from their own savings, in addition to maintaining an acceptable credit rating to qualify for the 1st mortgage.
HERE’S HOW IT COULD WORK. Re-introducing PUD’s would most likely require city-wide changes to the code. Actually building PUD’s would require the City B & Z and permitting departments to “get with the program.”
The following example is imagined for Village West Coconut Grove where privately owned T3 R single family lots and maybe a few T3 O duplex lots are still available for $300,000 or less. There could be substantial construction cost savings from shared demising walls, driveways, parking, utility connections, etc. Costs can vary widely (“death by a thousand cuts”) but here’s the general idea:
1. Land Cost: Five 5,000 sq. ft. T3 R Lots @$300,000/lot $1,500,000
2. Hard Costs: 15 units, each 1000sq. ft. @$100psf $1,500,000
3. Soft Costs (Plans, Permits, Fees, etc.) 25% of Hard Costs $375,000
4. Developer Profit $125,000
TOTAL $3,500,000
Cost per 1000 sq. ft living unit ($3,500,000/15 units) $233,333
Cost per 1000 sq. ft living unit less Land cost ($2,000,000/15) $133,333
Sales Price of Unit EXCLUDING Land retained by Land Trust $133,000
Less Downpayment paid by prospective Homeowner ($3,000)
Amount to be financed by new homeowner $130,000
Conventional 1st Mortgage at 5% , 30 years $65,000
Soft 2nd Mortgage at 1%, 10 years, Interest only $65,000
Monthly PITI to be paid by new Homeowner
Conventional 30 yr 1st mortgage $349
“Soft 2nd” Interest only 2nd mortgage $54
RE Taxes on Unit only (not incl. Land Trust land) $300
Homeowner Insurance $100
Co-op Dues $100
TOTAL $903/mo
HUD Required PITI max @30% of Gross Family Income $36,120/yr
SUMMARY: By using this Land Trust/PUD/Co-op model, a low-to-moderate income family with $36,120 annual GFI could become the homeowner of a 1000 sq. ft “cluster home” (2 BR/2 BA w. Loft) in Village West Coconut Grove for the “equivalent of rent.” Homeownership is not for everyone, and there is a critical need for more “affordable” rental units, too, which would probably require up-zoning some T 3 areas to T 4 allowing apartment buildings. There are many reasonable objections to allowing PUD’s again (including traffic, parking, utility capacity, “spot zoning,” possible negative impact on adjacent SFR home prices, and charges of discrimination if no PUD’s were ultimately to get approved and built except in Village West). However, ignoring the Housing Affordability Crisis causes other problems (including possible rent control, “bonus” height increases on Grand Avenue for inclusionary rental units, increasing gentrification in Village West, and decreasing availability of “starter homes” throughout the Grove).
What say if we were to use Village West’s existing land trust and build just one mini-PUD--like Blue Water in tiny Tavernier-- as a “Demonstration Project”? Would any for-profit developer be willing to build it? Would it be too daring for our City to allow someone to try?
Let’s at least be open to considering all possible solutions to the Affordable Housing Crisis.
Anthony R. ‘Andy” Parrish, Jr.
Coconut Grove
Part 2 of Andy Parrish's issues regarding Coconut Grove housing:
Consider St. Hugh Oaks and Lemontree developments in NCD 3, which technically were Condominiums not PUDs and which also are not even close to as dense as the “mini-PUDS” being considered here. More to the point is DPZ’s recent Blue Water “Workforce Housing” development in Tavernier.
There are also a few small older apartment buildings scattered throughout the T3 R single family neighborhoods of all sections of the Grove that are compatible with their single-family home neighbors. All of these suggest “cluster homes” and “Courtyard cottages” as a possible avenue for redevelopment of T3 R and T3 O assembled lots comprising as little as 25,000 sq. ft. of land but only in neighborhoods that want and agree to have such low-rise housing built.
HOW COULD THIS BE POSSIBLE? First assume that there might be funding for land acquisition from the City, or County, or State, or CRA, or “Community Benefits,” or wherever. Then assume:
1. These funds could ONLY go to a neighborhood Land Trust (or possibly some other trusted and established not-for-profit entity).
2. The land where the PUD units would be built would be owned in perpetuity by the Land Trust.
3. The “cluster” units built in the PUD would be sold—NOT rented-- to existing residents by providing “Soft 2nd” mortgages to bring the PITI (Principal, Interest, Taxes and Insurance) down to “the equivalent of rent.”
4. The newly created homeowner families could sell their units, say, after 10 years, thereby allowing them to share in the neighborhood’s overall long-term appreciation which they helped to create, BUT the profit on any sale would be divided with the Land Trust so that more land could be acquired for more PUD type developments.
WOULDN’T THIS PLAN REQUIRE HUGE PUBLIC SUBSIDIES? Depends on how you define “huge.” Once you get past the heated questions about whether anyone should get taxpayer money and how much, certainly there would have to be public funding to buy the land at Fair Market Value from private owners. In addition, the “Soft 2nd Mortgages” at 1% interest only for 10 years requires public funding, but non-taxable bonds these days don’t pay much more than 1%. Furthermore, when one considers the immense amount of public funding that already subsidizes the Section 8 rental program, creating more homeownership units may repay the taxpayers in many tangible and intangible ways because of the stabilizing effect of homeownership. Diverting any Section 8 rental funding to subsidizing homeownership would be, to say the least, difficult.
WHY HOMEOWNERSHIP INSTEAD OF SECTION 8 RENTALS? As a practical matter, this idea of introducing more density into existing established SFR and Duplex transects is radical enough by itself even to have a chance for passage by the City Commission. It is undeniable that homeownership tends to be stabilizing and beneficial for neighborhoods in ways that rental units are not, especially when the new homeowner is required to make a $3,000 down payment from their own savings, in addition to maintaining an acceptable credit rating to qualify for the 1st mortgage.
HERE’S HOW IT COULD WORK. Re-introducing PUD’s would most likely require city-wide changes to the code. Actually building PUD’s would require the City B & Z and permitting departments to “get with the program.”
The following example is imagined for Village West Coconut Grove where privately owned T3 R single family lots and maybe a few T3 O duplex lots are still available for $300,000 or less. There could be substantial construction cost savings from shared demising walls, driveways, parking, utility connections, etc. Costs can vary widely (“death by a thousand cuts”) but here’s the general idea:
1. Land Cost: Five 5,000 sq. ft. T3 R Lots @$300,000/lot $1,500,000
2. Hard Costs: 15 units, each 1000sq. ft. @$100psf $1,500,000
3. Soft Costs (Plans, Permits, Fees, etc.) 25% of Hard Costs $375,000
4. Developer Profit $125,000
TOTAL $3,500,000
Cost per 1000 sq. ft living unit ($3,500,000/15 units) $233,333
Cost per 1000 sq. ft living unit less Land cost ($2,000,000/15) $133,333
Sales Price of Unit EXCLUDING Land retained by Land Trust $133,000
Less Downpayment paid by prospective Homeowner ($3,000)
Amount to be financed by new homeowner $130,000
Conventional 1st Mortgage at 5% , 30 years $65,000
Soft 2nd Mortgage at 1%, 10 years, Interest only $65,000
Monthly PITI to be paid by new Homeowner
Conventional 30 yr 1st mortgage $349
“Soft 2nd” Interest only 2nd mortgage $54
RE Taxes on Unit only (not incl. Land Trust land) $300
Homeowner Insurance $100
Co-op Dues $100
TOTAL $903/mo
HUD Required PITI max @30% of Gross Family Income $36,120/yr
SUMMARY: By using this Land Trust/PUD/Co-op model, a low-to-moderate income family with $36,120 annual GFI could become the homeowner of a 1000 sq. ft “cluster home” (2 BR/2 BA w. Loft) in Village West Coconut Grove for the “equivalent of rent.” Homeownership is not for everyone, and there is a critical need for more “affordable” rental units, too, which would probably require up-zoning some T 3 areas to T 4 allowing apartment buildings. There are many reasonable objections to allowing PUD’s again (including traffic, parking, utility capacity, “spot zoning,” possible negative impact on adjacent SFR home prices, and charges of discrimination if no PUD’s were ultimately to get approved and built except in Village West). However, ignoring the Housing Affordability Crisis causes other problems (including possible rent control, “bonus” height increases on Grand Avenue for inclusionary rental units, increasing gentrification in Village West, and decreasing availability of “starter homes” throughout the Grove).
What say if we were to use Village West’s existing land trust and build just one mini-PUD--like Blue Water in tiny Tavernier-- as a “Demonstration Project”? Would any for-profit developer be willing to build it? Would it be too daring for our City to allow someone to try?
Let’s at least be open to considering all possible solutions to the Affordable Housing Crisis.
Anthony R. ‘Andy” Parrish, Jr.
Coconut Grove
posted by Tom Falco at 4:00 AM
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3 Comments:
Oh how the masses are easily fooled. First off, I can count only 2 cluster homes/high density projects in the West Grove. To assert that cluster homes are common in the West Grove is false and misleading. Second off, is it me or does Andy sound like he already has some high density housing projects in the single family and duplex zoned regions of the West Grove already planned? Seems to me like he is using the Grapevine to socialize the masses to his money-making scheme. I bet if someone digs a bit they will see that Andy already owns properties (through shell companies or through an attorney with a power-of-attorney) in the West Grove and has already set the wheels in motion to try to upzone these properties. NO THANKS!
We have tried the land trust idea and people want to own the dirt too. We have plenty of folks who qualify for home ownership and we are losing the working people w families at rapid speed. Why not get rid of HUD make county donate those homes convert to home ownership there are several single family huds.
Annon 645 funny you hit some interesting points Andy made a list of properties in the west grove that were available for purchase and what could be done with them cost the density allowed for the sitting at the county CRA
Such a waste of $25,000.00 for the finding of necessity January 11 2018 city approved and nothing
We should have been building something by now. Everything and everywhere is more important than the west grove Andy also suggested 4 single family homes to buy from original grove residents for $250,000.00 each w CRA money to build 20 cottages in place of 4 single family homes right behind the photo of 3339 Frow Avenue little house between the 2 big ones
How about that knocking on doors to buy homes yes that is true in email list of addresses
Couple others owners have told me andy and his wife Julie Odell Ophelia real estate contact them to buy and they are not interested in selling
When you are appointed to PZAB and HEPB you get free passes unlike others. Imagine not having to get permits to redo historic home!!! What a savings
If these zoning changes were to be enacted city-wide they would be easier for me to accept, but instead they are being targeted in a former mandatory segregation zone formerly known as the Black Grove, but now known as the NCD-2. What bothers me is how the NCD Amendments wanted to offer all these bonuses to builders which would apply only in the NCD-2 but not in the rest of the NCD-3 (where Andy lives). Parrish admits he is targeting the NCD-2 twice above, even expecting opposition based on what would be well-justified claims of discrimination. Would these bonuses be offered to builders in the historically white neighborhoods of Coconut Grove, outside the NCD-2? No.
You know how? Read the fine print of the last (deferred) NCD Amendments, and you will notice the mention of two seldom-mentioned streets in Coconut Grove: Bridgeport Ave. (just east of the Home Depot and McDonald St.) and Coconut Ave. (just south of Berries and US1). These two streets are the cut off points which would prevent the developer bonuses offered in the NCD Amendments from extending into the Center and North Grove. It is under a section of the legislation (passed by Parrish's Planning and Zoning Board) called "Community Benefits", but it should have been called "Developer Benefits". Under the guise of "conservation of canopy" in the proposed NCD Amendments, floor to lot ratios (FLR) and lot splitting are being reduced in the "SFR" (single family residences, or small-time homeowners), and FLR (and density) bonuses are being given to developers under the guise of "community" benefits. This is why opponents of the legislation call it a density bait and switch.
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