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As Brightline sparks building frenzy, affordable housing on the way
By David Lyons
Move over, developers. A nonprofit affordable housing group is looking for a piece of the Brightline real estate action.
The high-speed rail service is attracting a growing stream of out-of-town tourists, business travelers and local leisure visitors. And competition has intensified among South Florida developers who are snapping up properties near existing train stations and the sites of potential new ones, real estate experts say.
Now, the nonprofit, the South Florida Housing Link Collaborative, has obtained the financial punch to get in the game: The group recently received a three-year, $5 million investment pledge from JP Morgan Chase to help buy low-income properties along the Florida East Coast Railway line used by Brightline, and potentially, by the Tri-Rail commuter line.
The collaborative, which consists of five nonprofit groups including the South Florida Community Land Trust and Community Land Trust of Palm Beach County, plans to build 150 permanent affordable rental units. It'll also acquire and renovate another 50 existing units. And it'll float 200 loans to existing homeowners to make their houses energy efficient and resilient against storms and sea-level rise. The collaborative wants to ensure low-income residents aren't displaced by investors chasing transit driven real-estate profits, or by high income coastal residents who would flee rising seas over the next few decades.
"We're protecting the most vulnerable people from displacement in these neighborhoods and making sure these people can stay there," said Mandy Bartle, executive director of the South Florida Community Land Trust in Fort Lauderdale.
Under the plan, the land would be bought over three years and the build out of new projects would take between four and five years. All would be within a half mile of the rail line, and all would occupy some of the highest ground in South Florida as a safeguard against rising seas.
Wave of new development
But the nonprofit's efforts may be headed for a clash with the for-profit titans of development.
Over the last several years, large clusters of office, retail, hotel and condo projects driven by commercial developers have taken root around the Brightline stations in downtown Fort Lauderdale, West Palm Beach and Miami.
And the presence of Brightline, which is being rebranded as Virgin Trains USA, has rapidly changed the landscape of South Florida's downtowns: Investors and developers are teaming up to build retail, office, hotel and residential projects, and sometimes combinations of all fours.
In Fort Lauderdale, apartment and condo towers have made Flagler Village into an enclave of its own, and developers have plans for new hotels. Even the public sector has gotten into the act. The city and Broward County governments have picked an architect to build a joint government center near the Brightline station, while the U.S. government contemplates a new $190 million courthouse complex.
In West Palm Beach, hotels and condo towers are filling the city's center within five- to 10-minute walks of the Brightline station there. The Flagler Banyan Square development, for example, includes a luxury apartment building, more than 30,000 square feet of commercial space and office space on the city's waterfront.
In Miami, the Virgin MiamiCentral station that is the southern end point of the Brightline service is itself part of a high-rise development, which includes offices, shops, condos and apartments. The station also is destined to be a downtown stop for Tri-Rail, which has built a cross-county rail link from its existing line between West Palm Beach and Miami International Airport.
Around the neighborhood, massive high-rise projects such as the Miami Worldcenter is under construction. And developers of the proposed 890-foot tulip shaped Okan Tower — billed as potentially the tallest building in the state — are awaiting permission to build.
Despite the intense commercial interest in developing projects near the rail stations, Bartle likes the collaborative's chances now that it has the JP Morgan backing in hand.
"Certainly this investment and infusion from JP Morgan is going to allow us to compete with other investors," she said.
Bartle says the collaborative has identified 27 coastal locations and 2,000-plus properties as potential candidates for purchase.
Some of the sought-after properties could be near Tri-Rail stations that would be built in the future.
Tri-Rail, the long-running commuter rail service, has different ownership than Brightline and runs on a different rail line. But over time, Tri-Rail plans to have a presence along the same Florida East Coast Railway line now served by Brightline. Tri-Rail envisions installing stations between Miami and West Palm Beach.
It remains unclear where a project could align with an east side Tri-Rail station as management hasn't finalized any stops north of Miami.
Founded in 2006, the South Florida Community Land Trust has several projects in its Broward County portfolio, where it aims to maintain leasing prices below market rates and within reach of low-income residents. The trust can accomplish this by maintaining permanent control of the properties it acquires. Although a home may change ownership, the underlying land remains under the control of the trust.
Broward County Commissioner Nan Rich, a longtime affordable housing advocate, is eager to see the group pull off the project. Nearly 60 percent of the employed adults in South Florida spend more than 30 percent of their income on rent, which is the highest of any metropolitan area in the U.S., she said in a telephone interview Thursday.
"We need in Broward County right now over 100,000 multi-family units," Rich said. The grant, she said, is "a start and I love the fact that the $5 million will definitely enable us to leverage other monies."
That means when an organization shows it has a pool of money available for a project, grants, tax credits and other sources of financing become available to help support it.
Acquiring the JP Morgan money was "step one," Bartle said.
"Now we have to roll up our sleeves and balance and coordinate and start identifying the right properties.