At the June 7 member-to-member breakfast, Sarah Cortvriend of Carlton Fields Jorden Burt’s Palm Beach office welcomed CREW-Miami members and guest speaker, City of Miami Commissioner Francis Suarez. The Commissioner shared his perspective on a range of subjects affecting real estate and general business in the City of Miami.
Topics discussed were the city’s economic outlook, transportation and traffic challenges, and the disparity between the cost of housing and individual income in Miami.
Mr. Suarez gave statistics that shed light of the city’s recent and potential growth: In the last three years, Miami grew by 37%. “If the city were a mutual fund we’d be happy with that rate, but the strength covers a weakness: that growth trend is slowing.” Growth in the last period was only 11.3%, lower than the two previous periods. Nearly half of the period’s 11% increase is property value appreciation, with Brickell City Center alone responsible for 4.8% of that.
During the real estate Armageddon in 2008, and city’s reserves shrank, but the situation has turned around, with a $20 million reserve now projected.
Miami’s success depends on factors outside our control, including other governments’ dysfunctions, “Miami is a safety deposit box for countries across the world but when they fail, that affects Miami’s real estate and construction businesses.”
Brazil and Venezuela are out, but New York money filling the gap. Investors from China and Israel are on the rise, and interest from Turkey, India, and Middle Eastern countries is indicated by direct flights between Miami and their capital cities.
Business people from Latin America and other countries like to do business under our judicial system because of the clear processes available for resolving issues and disputes.
As immediate past president of the Miami-Dade League of Cities and vice chair of the Miami-Dade Transportation Planning Organization (TPO) board, Mr. Suarez was happy to note that mass transit has been designated the TPO’s top priority because efficient transportation is a quality of life issue. After visiting all major US cities with viable mass transit systems, he concluded that getting a system in place takes political leadership, coherence, and collaboration. Some points on the transit topic included:
The has city poured millions into a money-losing bus system, while trolleys that circulate between nodes have high ridership. Trolleys’ success is likely due to the fact they are free, seamless, and quicker than buses due to their limited routes.
The advent of Uber and Lyft have led to a 50% decline in DUI. He recommends that governments avoid attacking ride-share and home-share enterprises, but find ways to work things out, because government’s attempt to regulate them is a losing battle.
A Brickell Tunnel is sorely needed. Bottlenecks from bridge openings for boat traffic on the Miami River are major headaches for office tenants and their clients. The city is developing signage all the way to I-95 and a digital communications system to alert drivers to bridge openings. Only 50% of Brickell Bridge traffic enters Downtown, so a tunnel bypass will benefit drivers continuing north on Biscayne Blvd.
The Hyatt Hotel/Knight Center is scheduled be demolished and rebuilt. The site, pre-reconstruction, would be a viable staging area for tunnel construction.
Density-wise, statistics indicate that the City of Miami can support 1.5 million units, and currently we have 185,000, putting us at 90% under capacity. We have 24,000 units per mile, a density level that is one quarter of Manhattan’s. A population increase would benefit the city, based on the fact that the 90,000 people added to Miami’s Central Business District in the last decade generated $4.5 billion in sales tax revenues.
Infrastructure is the key to achieving density, and great cities have functional mass transit. Miami is densifying around nodes. Examples are two public-private partnerships (P3s) under way along 27th Ave. These and other projects are being built at Metrorail stops, with private owners committing to maintaining the county-owned stations that connect workers who live in them to their jobs. To increase density along travel corridors, the City is waiving some impact fees as a way to encourage developers to include workforce housing.
He favors directing certain fees to support The Underline because parks are shown to cause property value appreciation. This has been the case in Coconut Grove, where five high rises are being built around the new Regatta Park, former site of an outdated convention center.
The community is addressing mass transit by activating the Strategic Miami Area Rapid Transit (SMART) plan and other public transit plans that address east/west as well as north/south transportation. He noted that citizens passed a half-cent tax to fund solutions, but the money was used to cover inefficiencies in the bus system. He urges restoration of the half-penny’s use for capital improvements, not operations, and has persuaded the state to increase its contribution to mass transit. “You can’t tax people unless they believe you’ll follow through. We did NOT follow through. When you do deliver, people will support a tax increase for transit.”
The recent toll hike on State Road 836, plus the existence of WAZE to guide drivers around congestion, is sending commuters through residential areas, wreaking havoc in neighborhoods. Mass transit issue would alleviate this issue.
FECI, Omni CRA, Miami Dade County and others are collaborating to build a Tri-Rail spur with local connections. This would constitute a lifeline for riders from Overtown and Liberty City.
Miami has the nation’s second-highest rental cost as a percentage of income. Our high shelter cost versus low income potential is a barrier to entry for young professionals. Wynwood is addressing it by planning to build smaller units (around 500 sq. ft,) with little or no dedicated parking.
Asked why the supply of workforce/affordable housing is too low, he replied that owners don’t want to sell land below market, and developers are reluctant to build products on which they cannot make money. He believes one of the city’s main challenges is on the income side. To change that, he would like to attract more tech industries and venture capital, to make Miami a tech hub, ideally with a major tenant like Google.
—Susan Cumins, CREW-Miami member since 1998