How One Local Government Is Deploying Creative Housing Affordability Strategies [Case Study]

This blog post looks at the affordable housing challenges faced by Miami Florida.

Nov 17, 2016 | BLOG POST

The need to develop affordable housing options is quickly becoming a higher priority for many communities. From a recent snapshot that we shared in May, our research found that

  1. More than one in three American households are housing cost-burdened.
  2. Housing affordability is increasingly cited among leaders as a barrier to economic development.
  3. Local governments fund a large portion of housing affordability programs.
  4. Communities of all sizes and in all regions are economically impacted by housing affordability challenges.

Whether focused on traditional approaches or newly emerging practices for affordable housing, local governments play a critical role in assessing the specific needs of the communities that they serve and developing and implementing strategies to effectively meet those needs. From Local Government Review, the following case study highlights the unique challenges and targeted strategies being pursued by Miami, Florida. The population, income, and housing statistics presented are from the U.S. Census Bureau, 2014 American Communities Survey.

Miami, Florida Leverages the Strong Local and Foreign Demand for Real Estate to Increase Supply of Affordable Housing Units

The city of Miami has seen a significant volatility in its housing market. Dramatic growth in real estate values peaked in 2006 and was followed by the severe crash that came with the Great Recession. Now, several years after the end of the recession, the city is again seeing significant growth. Still, almost two-thirds of the city’s renters are housing cost burdened.

What Contributes to the Large Proportion of Cost Burdened Residents in Miami

Many of the drivers of Miami’s housing affordability challenges are not unique. High demand for real estate among developers, a large proportion of renters, and slow income growth contribute to the large proportion of cost-burdened residents in the post-recession economy.

Factors of Housing Affordability Unique to Miami

While many communities are confronted with these same challenges, several factors unique to Miami also contribute to housing affordability issues. Miami is a global city and is seen by many as the gateway to the Americas. The city has a large immigrant population and sees significant foreign investment in real estate. The high foreign demand inflates prices, making housing less affordable to local residents. At the same time, the city’s resident population is disproportionately older, with many individuals at retirement age with limited earning potential. The median household income in Miami is very low— approximately $31,000, compared to $53,000 nationally.1 In contrast, the cost of living in Miami is 8.1% higher than the national average.2

Local Initiatives and Strategies to Fight Back

In light of these circumstances, the city government has undertaken various local initiatives to address housing affordability among residents. The city’s strategies focus primarily on leveraging the strong local and foreign demand for real estate to increase the supply of affordable housing units. This includes offering waivers of certain fees and requirements to incentivize the development and/or maintenance of affordable units. For example, developers building near transit hubs is able to reduce the amount of parking required to be built by reserving a certain portion of new units for residents earning 60% of AMI.

Developers are also allowed to avoid certain permit fees by reserving a portion of units for extremely low-income residents (earning 30% of AMI or less).3 The city is also currently exploring opportunities to leverage high international demand to support the development of affordable housing through a program for immigrant investors. In 2014, the City of Miami received approval for designation as an EB-5 Regional Center for Foreign Investment through U.S. Citizenship and Immigration Services (USCIS). Through this program, temporary resident status is provided to investors and their families who invest at least $1 million in businesses that create at least ten full-time U.S. jobs.4

1 U.S. Census Bureau, 2014 American Communities Survey.
2 Forbes website, Miami, FL, Profile,
3 Telephone interview with George Mensah, Director, Department of Community and Economic Development, City of Miami, FL, February 2016.
4 City of Miami, FL, website, “EB-5 Funds Help Cities Build Affordable Housing,”

For more case studies on housing affordability, read the latest report in Local Government Review, Tackling the Housing Affordability Crisis: The Critical Role of Local Government Leadership.


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