Swanky new building marks Overtown evolution
Overtown’s newest luxury residential tower, Soleste Grand Central, stands 18 stories high and sports modern suites, and a resort-style pool, spa, rooftop deck, club room and fitness center. Its Class A rental units are branded as mixed-use, but just over 20% only are reserved for affordably priced workforce housing.
With big changes coming to Miami’s historic Black neighborhood, does breathing new life into Overtown mean that longtime residents will be left behind or are local leaders making sure that gentrification does not take over?
Located within the boundaries of the Southwest Overtown/Park West Community Redevelopment Agency (SEOPW CRA) at 218 NW 8th St., the 360-unit Soleste Grand Central offers studio suites and one- to three-bedroom apartments ranging from 442-1,082 square feet. With contemporary-style designs by architect Caymares Martin and interiors by ASG Interior Design, the residences are outfitted with modern kitchen cabinets, quartz countertops, in-unit full-size washers and dryers, spacious walk-in closets and private balconies overlooking the skyline.
The building is providing 80 of its 360 homes – 36 studios, 30 one bed/one bath and 14 two bed/two bath residences – at 60% of the area median income (AMI), which is $37,980 for one person and $54,240 for a four-person family. The AMI for Miami-Dade County is $61,000.
“Someone at 60% AMI might be paying $1,200 a month and living next door to someone paying $2,5000 to $3,000,” said James McQueen, SEOPW CRA executive director. Replacing former director Cornelius “Neil” Shiver, McQueen was appointed to the position by newly elected District 5 City Commissioner Christine King during her first commission meeting last month.
“If you walked into an apartment of someone at 60% AMI, they have the same cabinetry, same amenities. You couldn't tell the difference [between workforce housing units and those at market price],” he added.
In contrast to households with incomes that are at or below the poverty line, workforce housing is generally defined as housing that is affordable for middle-income service workers such as police officers, teachers, firefighters and nurses.
“[Like the] Soleste and other similar workforce housing, the income limits make it so these are not truly affordable for many [of the] citizens these are intended to help,” said Joseph Phelps, a broker at Vision Real Estate that works with downtown, Wynwood and Design District area properties.
When asked why only 20% of the building had been allocated to workforce housing, District 3 County Commissioner Keon Hardemon said it was a compromise to bring in a mixture of income into Overtown. Developers agreed not to keep the building solely at market rate because the CRA pushed for that – enabling district residents with decent salaries to be able to afford the cost.
“What you have to understand is in order to develop these projects, you need the dollars. Tens of millions of dollars, and you need people to pay a rent that is enough to cover the ongoing expenses of the building,” Hardemon explained.
Progress vs. gentrification
All 80 workforce units have already been filled, but some of the remaining apartments are still available – and are seemingly being marketed toward residents outside the community. Posted on the SEOPW CRA website is a flyer that reads, “Arrive to discover, stay to escape.”
“This is the first true development that the CRA has given money to that attracts a different sector of our community to live and expand to Overtown,” said Hardemon. “[It] gives a new population, a new group of individuals, an opportunity to move to Overtown, so the building with as many residents as it has, just know it’s not meant to be a space only for people who are already living in that area.”
New market rate housing can drive up housing costs throughout a neighborhood, which can set off alarm bells. Miami is one of the most gentrified cities in the country, with rents that qualify as the fourth highest in the nation. Neighborhoods like Wynwood, the Design District and even Little Haiti have become magnets for developers, where housing costs have increased and priced residents out of their homes.
Amid climbing prices and limited inventory in the market, Phelps said a lot of housing is being bought up cheap and then renovated to justify increased rents. Some are even looking for short-term rentals, especially in areas near Wynwood.
“In Overtown, it’s nearly impossible [to find affordable units] as I know waiting lists fill up fast. The private market is full of new owners who may be bought in on a high basis and they need to charge higher rents in order to make their projects successful. Inflation has affected us a lot,” the real estate broker said.
Just this year, Miami surpassed Los Angeles as the second most expensive housing market in the country, according to a Realtyhop study. New York is number one in the report.
Phelps shared that his firm recently sold a 92-unit Overtown building where vintage rents were $600 to $700 a month, and that now-renovated one bedroom units in the building are being marketed for $1,150.
“In addition to more people moving here from another state where their work-from-home incomes are higher than the local markets, construction material hit all-time records during the pandemic, which made the cost of housing a lot more expensive,” he added.
Soleste Grand Central is situated in an Opportunity Zone, an area designated as struggling economically where investment is encouraged through tax breaks. Because it was built on a 1.2-acre vacant lot, no one was displaced, says McQueen.
“The only thing we can do to reassure [residents] is to improve the housing stock and continue to fund projects that make it affordable for people to stay,” he said.
Millions of dollars in play
Brian Zeltsman, director of architecture and development at SEOPW CRA, said developers PTM Partners LLC and the Estate Investments Group gave the agency $3 million for the vacant lot – a price he says is below what it was worth – on the condition that units would be reserved for people in the neighborhood who fit AMI. And in addition to the land being sold at a reduced rate, there is a tax rebate.
“The developer pays property taxes to the city and county. That's how our agency is funded and this project is within our boundary,” Zeltsman said. “The part that comes to our agency gets rebated back to the property owner for the next several years. Normally, developers would want to charge market rate for all the units in this project but that doesn't meet [the CRA’s] goal [to increase affordable housing in the area].”
The CRA has an $86 million budget and is funded through dedicated tax dollars (called tax increment revenues) that the city and county set aside for development within the agency’s boundaries, for programs and projects to fight urban blight and neglect.
In addition to its Homeownership Program, which was created to address the city’s growing affordability crisis, the agency has funded plans to increase affordable housing inventory, such as $10 million to the St. John Plaza Apartments, a new multifamily affordable housing rental development at 1327 NW 3rd Ave. which has 90 one- to three-bedroom units, and nearly $40 million into the Town Park Plaza North and South rehabilitation of 285 apartments in 37 buildings.
Currently, the CRA is starting construction of a mixed-use development on Block 55 called Sawyers Landing that will consist of 578 affordable residential units, half of which will target families earning less than 50% of AMI. The other half will target families with incomes between 50% and 80% AMI. Located at 249 NW 6th St., the 3.44-acre site adjacent to downtown will take about two years to complete.
“Housing is going to remain affordable in spaces like Overtown because we’ve created affordable housing structures. The CRA is not necessarily building new buildings for the people in Overtown because the people who live in Overtown already live there,” Hardemon said. “The people who are going to make sure that Overtown is not gentrified are the homeowners who live there, the people who pay their mortgage or who have already paid off their homes, and they’re now enjoying the grant that the CRA gave in order for them to live in a more perfect home.”
Minimizing the fallout
Without any new construction or population growth, disadvantaged neighborhoods can stay that way over time, or grow worse. Introducing a mixed-use development like Soleste to urge people and investments to come into the community while also bringing in tax revenue is seen by Hardemon as a positive way to invest back in residents. Another way is by increasing property values.
“We need an opportunity for your mother or your grandmother who bought the house 30, 40, 50 years ago to have an opportunity to either keep that home and take out the equity and send you to college, or sell their home at the highest price possible,” he said.
McQueen says the development allows for an increase in disposable income in the area, giving local businesses support, for example.
Overtown flourished as a thriving Black community until the 1960s when thousands of its residents were displaced to make way for the construction of I-95 and I-395, which bisected the area. Since the end of segregation, Overtown’s population has drained as deteriorating buildings have been demolished and residents have moved elsewhere in search of better living conditions.
Hardemon says he's proud of what the community has become today and to see this kind of development in place. He recalls that even just 10 years ago, it wouldn’t have been possible.
“This wasn’t an area where people felt comfortable coming to. In fact, when I looked at the media back then, the media was regularly regarding the area as a state that was for people who were trying to buy drugs, or there were a lot of shootings and murder,” the commissioner said. “I look forward to the day that all of those vacant lots that exist in Overtown are fully developed and Overtown looks more like a community that has structures and commerce and opportunities for people to dine and shop and really experience its space.”
Despite not being involved in the deal between the CRA and developers, in a statement sent to The Miami Times – requests for an interview were declined – King said she is advocating for affordable housing in District 5 to ensure Overtown remains intact.
“Change is inevitable,” the statement reads. “How we embrace change is what will shape our future. Displacement of Overtown residents and/or residents as a whole in our community must be minimal.”
The Miami Times. Dec 8. 2021.