Law aimed to fast-track housing. Two years in, Miami-Dade sees first modest project

Miami Herald

18 hours ago

Two years after it was first approved, the controversial Live Local Act, a state law designed to fast-track housing construction across Florida by overriding local density limits, is about to deliver its first project in Miami-Dade County.
It's not what you may be expecting.
Instead of the splashy, zoning-busting high-rise proposals that have set off political and court battles across South Florida, Beacon Hill at Princeton is modest in scale and scope: Three-story garden-style buildings with a total of 112 rental apartments, all of them affordable to people making a middle-class income.
But its developers are doing something that no other Live Local proposal in Miami-Dade has managed to accomplish so far: They are actually ready to start construction.
In doing so, developers Matthew Martinez and David Rothenstein say, the $20 million Beacon Hill at Princeton may provide a model for making the law work the way it was sold to the public — expanding the supply of so-called 'workforce' housing in urban areas where exploding costs have made renting a home unaffordable for many middle-income workers.
The developers say their project, on South Dixie Highway just north of Homestead, is the first in the county to be fully conceived, designed and approved under Live Local that's ready to go. Unlike numerous other proposals that have yet to get off the ground, their development did not seek to supersize under Live Local and has no market-rate apartments, keeping cost lows with simple, low-rise designs.
By focusing on Live Local's generous tax breaks and other incentives instead, they say, they were able to preserve relative affordability while still projecting a healthy return on their investment. The project is privately financed.
'What we've tried to do at Beacon Hill is create and develop workforce housing for the missing middle that adheres to the spirit of the legislation,' Martinez, president of Coral Gables-based Beacon Hill Property Group, said. 'We want to provide good, safe financially attainable housing for people who make our communities work and function.'
Added Rothenstein, Beacon Hill's managing director: 'We're making a little dent in this huge need. We're using it for exactly what it was meant for, to add workforce housing, not market-rate housing.'
Beacon Hill's Princeton project broke ground with a ceremony June 6. The developers expect completion by late next year, with monthly rents ranging from $1,700 to $1,900 for a one-bedroom apartment, and between $2,100 and $2,300 for a two-bedroom. To qualify, renters must meet income caps set at no more than 120 percent of the county's median household income, or about $95,000.
But the developers and even some Live Local backers warn not to expect a flood of projects, at least not yet.
Originally approved by the Florida Legislature in 2023, the Live Local Act allows mixed-use projects in commercial and industrial districts to exceed limits on local density and height zoning rules so long as developers set aside 40 percent of residential units for workforce housing.
Under Live Local, championed among others by Florida GOP Rep. Vicki Lopez of Miami, municipal and county authorities are obligated to approve a proposal that qualifies without public hearings or review.
The law, which received overwhelming bipartisan support, also provides significant breaks on property taxes and impact fees paid by developers, while earmarking millions of dollars in state funds for housing development over 10 years — lucrative provisions that have not received the attention that the law's zoning pre-emption measures have. The idea was to allow developers to build more profitable market-rate apartments using greater height and density while providing financial support to balance out the lower rents for workforce tenants.
Backers said they expected the law to quickly result in development of low- to mid-rise buildings, or up to about eight stories, because construction costs and complications rise substantially above that height, likely making high-rise Live Local proposals hard to finance and slow to receive building permits.
Speculation over construction
Instead, the law has so far most conspicuously produced what some critics have said is an avalanche of speculation by developers across South Florida who rushed to propose complex skyscraper projects with hundreds of market-rate and even luxury apartments in addition to the desired workforce units.
In many cases the contemplated towers would far exceed the previously allowed height and density in municipalities from Hollywood to Doral, Bal Harbour and Miami Beach, prompting an uproar from residents and setting off some high-profile legal battles.
Earlier this year, the latest in a series of amendments to the Live Local law designed get projects moving could lead to the demolition of historic Miami Beach buildings, including its famed Art Deco buildings, for skyscrapers.
Backers note that the need for so-called workforce housing is acute across much of the state. But some skeptics say Live Local's zoning and financial measures provide developers outsize benefits while delivering little comparable relief for the county's housing crisis, which is concentrated among low-income families that cannot afford workforce rents, and saddling communities with traffic and other infrastructure impacts and costs they have not planned for.
Whereas Miami-Dade has a shortfall of some 17,000 workforce homes, the gap for low-income housing — defined as households making under 80 percent of the area median income — sits at 90,000 units, said Annie Lord, executive director of Miami Homes for All, a research and advocacy organization.
'What you're getting in exchange,' she said of Live Local's benefits for developers, 'it's just dwarfed by that five-to-one gap in affordable housing.'
While some of those high-rise, high-density projects have been approved, not one has begun or announced the start of construction.
Local resistance to Live Local
The poster child is perhaps a contested proposal from the owners of a dying Sears store on Coral Way, on the Miami side of the border with suburban Coral Gables, that drew strenuous opposition from the residents of the abutting, low-scale Coral Gate neighborhood.
The developers' plan would put three eight-story buildings and 1,050 apartments on the already traffic-clogged intersection of Douglas Road and Coral Way, a historic road that can't be altered.
In May, after the city of Miami, adhering to Live Local's rules, approved the project with no hearing or chance for public input, owner Ranaan Katz, one of the original partners in the Miami Heat, promptly put the eight-acre property — its value now multiplied by Live Local — up for sale for a reported $100 million-plus. The Miami-Dade tax appraiser's website puts the property's market value at $37.7 million.
A leading Live Local expert in Miami, land-use lawyer Javier Avino, said he believes there is a shake-up going on as developers realize large-scale projects under the law may be unfeasible, at least for now, given high interest rates and land, insurance and construction costs.
Avino, a partner and land-use lawyer at Bilzin Sumberg, noted that some chief beneficiaries of Live Local to date have been affordable housing projects already under development or construction that ran into difficulties because of rising costs. Several received significant low-interest loans from the Florida Housing Finance Corporation, a state agency, under Live Local to finish projects.
One since-completed project by a Bilzin client, Cymbal DLT's Laguna Gardens in Miami Gardens, initially a market-rent project, fully retooled before construction was finished to accommodate Live Local's income limits for all 341 units and qualify for its tax and financial incentives.
Also making progress, Avino said, are several proposals by Related Urban, the affordable housing arm of the giant Related Group, that take advantage of Live Local's zoning hikes. But those have the advantage of using public land under publicly bid agreements with the county housing agency — a massive cost savings other most private projects don't enjoy. Bilzin represents Related Urban.
'There's always going to be the reality that some folks try and entitle for highest and best use without truly committing to actually doing the development,' Avino said. 'The reality is that the ones we are seeing truly progress are the ones that provide enough of an incentive to pencil out financially. It's not going to be something that goes from 100 to 1,001 units of development. If you supersize something, it's going to create a slew of other issues that really become cost-prohibitive.
'In 2023 we saw a lot of exploration. What we're seeing now is a balancing out. Some people are seeing it doesn't make sense for me.'
Breaks on taxes, impact fees
The Beacon Hill developers said they found Live Local useful not for its zoning breaks, but for tax and other financial incentives.
Beacon Hill, which got its start in Boston before moving to South Florida, has experience with affordable housing. It has built federally subsidized Section 8 housing, in which the government pays a portion of the rent for low-income families and individuals.
But Live Local incentives made it advantageous for Beacon Hill to switch their model to workforce housing, its principals said.
The Live Local financial benefits include a substantial 75 percent to 100 percent reduction in property taxes once a development is occupied, depending on tenants' incomes. To qualify, a project must have at least 70 workforce units. Impact fees to local governments, funds typically used to make street and sewer improvements, for instance, can also be reduced, by 80 percent. There's also a $5,000 rebate on sales tax per workforce unit on building materials.
·'I've heard market-rate developers tell me the big plus of Live Local is ultimately going to be the tax breaks,' Lord, of Miami Homes for All, said.
But Lord warns that even the tax breaks are not yet proving to be a magic formula, either. That's because banks and other lenders have been loath to provide financing based on the promise of those breaks, which are not approved until a project is completed and may need to be periodically recertified.
'That is a major barrier to Live Local scaling up,' she said.
Counting on the breaks, Beacon Hill bought a 2.6-acre parcel for $2.55 in cash in 2024 in unincorporated Princeton, and designed a workforce project to slot into existing mixed-use zoning enacted by the county years ago to urbanize the unincorporated Princeton area, once a rural stop along Henry Flagler's Florida East Coast Railway.
Hit hard by Hurricane Andrew in 1992 and the loss of surrounding agriculture, Princeton has been a piece of what some long-time residents called the Dead Zone, a socially and economically depressed stretch of South Dixie north of Homestead.
That's changing quickly. The search for less expensive and available land on which to build homes has led developers to the South Dixie corridor as the county gets set to open the new rapid-bus South Dade TransitWay that replaces the old busway and occupies the original route of the Flagler rail line.
'We think this is a phenomenal area for people to live,' Martinez said.
To encourage housing development along the 20-mile-long TransitWay, which features 14 stations serving express buses that get green lights all the way at rush hour, the county has enacted special zoning districts that allow greater height and density, drawing dozens of new apartment projects to the area.
That has meant both market-rate and workforce housing developments that are subsidized by a complex formula that relies on federal tax credits and low-cost state financing.
The Beacon Hill project sits about a block and a half from a TransitWay station, But the developers said they sought no upzoning under the county's rapid-transit district rules, which provide flexibility for greater density along its SMART corridors, often in exchange for public benefits such as inclusion of workforce housing.
Martinez said he found the Live Local financial incentives and the expedited planning review a better alternative to the traditional workforce approach. That faster approval can save a developer valuable months or even years, he said, but cautioned that it still took a year for the county to issue all necessary permits.
Without Live Local, the Princeton project would not have been feasible financially, Martinez and Rothenstein said.
'Without it, we couldn't get to the return on capital that we need,' Rothenstein said. 'The reduction in taxes is what made this deal pencil out.'
The approach has proven so promising that the partners are now planning 1,500 new workforce apartments using the model across South Florida. All will be in a similar garden style and scale to the Princeton development, which they say is the most efficient and cost-effective way to produce workforce housing. They are already working on a new Miami Gardens development.
But they cautioned not to expect a flood of Live Local apartments to come on the market, however. Building and other permits for construction still take time.
'The supply is still going to take time due to the nature of having to deal with so many permits,' Martinez said.