FLORIDA: An Introduction to Real Estate: Zoning/Land Use
FLORIDA: An Introduction to Real Estate: Zoning/Land Use
Jeffrey Bercow, Ben Fernandez, Michael Larkin and Melissa Tapanes Llahues
The cities of Miami and Miami Beach are bookends to one of the greatest inflows of capital, entrepreneurs of all shapes and sizes and wealthy individuals that the United States has ever witnessed. While there are many reasons for this mass exodus to the Miami area, a recent change to the federal tax code served as the impetus for this migration from the states of California, New York and Illinois. It is ironic that over 80 years ago one of the most venerated environmentalists of the 20th century accurately defined Miami’s current growth and arrival as one of the world’s greatest cities by remarking that:
“Nobody can tell now, exactly, why Rome and Paris and London began, or what made them endure and grow great. It is as if there were places and times in which human activity becomes a whirlpool which gathers force not only from man’s courage and ambitions and high hopes but from the very tides of disaster and human foolishness which otherwise disperse them… Something like that, it seems, to me has happened here in South Florida, under the sun and hurricane, on sand and pineland, between the changeless Everglades and unchanging sea. Miami has been building itself with all of the tough thirst of a tropic organism. I doubt if it will be complete, or the whirlpool slack, for a long time because its strength is that nothing human is foreign to it or will be.”
- Marjory Stoneman Douglas, Foreword, American Guide Series, Guide to Miami and its Environs (1941)
The Miami economy is booming as the business and wealth migration trend is fueling never-before-seen levels of activity in the retail markets. For the past two years, new-to-market office tenant activity has significantly increased. Some of the biggest names in finance and technology are looking to Miami as a core market, including Microsoft, Spotify, Apollo, Blackstone, CI Financial and more.
It comes to no surprise then that the South Florida real estate market is experiencing strong demand for single-family and multi-family residential within urban areas in Miami, Miami Beach and Hialeah. The is also demand for logistics and warehouse space in suburban areas to serve the growing population.
South Florida’s industrial development is undergoing rapid change. The inexorable rise of e-commerce, which has tripled in its percentage of overall retail activity since 2005, has brought, and will continue to bring, large scale logistics operations closer to the populations they serve. As a result, Miami-Dade County’s industrial supply is at an all-time low, with the lowest industrial vacancy rates ever seen in the County. Builders have been unable to keep up with demand, and rental rates have risen rapidly. The cost of large industrial parcels has skyrocketed to $3 million per acre.
The public and private sectors are taking steps to sustain Miami as one of the country’s most desirable and livable urban cities. There are several notable projects underway, or coming soon, with new development opportunities arising from increased density and height allowances within Miami-Dade County’s Rapid Transit Zone and SMART Plan Corridors. The SMART Plan creates six corridors within the County for rapid transit expansion, and brings new opportunities for Transit Oriented Developments (TOD’s) near transit stations. Miami-Dade County is working to incentivize development in these areas, notably with adoption of a Transportation Infrastructure Improvement Fund, tax increment financing based on growth within each corridor.
Co-living ordinances have also begun to be proposed locally to recognize a growing residential typology in Miami that will cater to remote work lifestyles and like-minded young people. Co-living is gaining popularity as a community living concept among single young professionals looking for convenience, flexibility and community. The concept typically involves living units that share kitchens and certain amenities. The idea first emerged around 2015 and this year the City of Miami is recognizing the demand for this housing option by considering the adoption of an ordinance formally recognizing this new trend in urban living, by establishing a definition for the use in the City’s Miami 21 Zoning Code.
The private sector has invested over forty billion dollars in infrastructure within Downtown Miami alone over the last decade, and more investment is on the way. The public sector is ushering in this activity with a series of capital improvements designed to improve quality of life, enhance the street-level experience and attract more investment to communities.
To highlight a few of the exciting projects – public and private – that are planned and underway in Downtown Miami:
- Flagler Street Beautification Project: $21 million initiative will completely transform the City’s historic main street from its current design into a pedestrian-friendly, festival-style boulevard oriented toward retail, outdoor dining and events. The first two phases, from Biscayne Blvd to E 2nd Ave, are already under construction.
- Miami Baywalk: The Downtown waterfront is one of the City’s best assets. The Miami DDA has taken the lead in advocating for public and private sector investment along the Baywalk, and last year, the City Commission approved design guidelines – conceived by the DDA – that will bring greater uniformity to the way that our waterfront is developed in the future. The vision is a seamless, uninterrupted pedestrian right of way stretching from Edgewater, through Downtown and south to Brickell.
- Waldorf Astoria Tea Garden: Developer PMG and the Miami Parking Authority are joining forces to create a new public green space within the medians along Biscayne Boulevard. This is going to be a five-year installation that activates parking lots with lush landscaping, seating, decorative lighting and a food and beverage concession.
The City of Miami Beach is experiencing the same amount of growth and development, with notable projects including:
- The Beach Walk: A linear path along the dunes from the southern tip of Miami Beach to the northern tip is now open and could soon rival in popularity New York’s Highline, it has become a favorite spot for tourists and local residents to exercise and walk.
- 500 Alton: A new 50-story tower and 3-acre park is taking shape at the southern causeway entrance to Miami Beach. This development will be further complemented by a bridge extending the bay walk north over 5th Street designed by noted artist Daniel Buren.
- Class A Office Buildings: The City of Miami Beach is inching closer to granting approval for the redevelopment of surface parking lots to the north of Lincoln Road to a series of Class A office buildings with ground floor retail and restaurant uses. The first new Class A office building in over 30 years developed by Barry Sternlicht is now constructed and open along Collins Avenue across from the One Hotel with close to 100% occupancy.
- The Aman and Bulgari Hotels: Two of the world’s top 5-star luxury hotels have decided to call Miami Beach home in the last two years, giving further credence to the idea that wealthy people like to live and vacation in the greater Miami area.
- Co-Living Space: Miami Beach’s first co-living project will soon break ground in the Washington Avenue corridor; the co-living use will be joined by an adjacent office use and ground floor commercial uses.