By Alexandra Pacurar
Miami—Downtown Miami’s residents are now mostly young professionals, with the 25-44 age group comprising 40 percent of the population, according to the latest demographics report from the Miami Downtown Development Authority (MDDA). The number of young professionals in the city’s core increased by roughly 30 percent since 2010. This has led to an almost complete absorption of what experts feared would be another condo bubble and spurred a boost in multifamily development in the tropical waterfront city once known for its sprawling suburbia.
“More than 20,000 condos were built between 2005 and 2009—a figure double the amount built during the 40 years prior. And while Miami was criticized for this ‘overbuilding,’ it helped lure thousands of young professionals and families to its urban core and set in motion one of the most dynamic urban renewals of recent decades,” Alyce Robertson, executive director of the MDDA, told Multi-Housing News.
Amenity-Rich Rentals Wanted
Naturally, young people prefer renting to homeownership, which has shifted the focus of development in the Miami market. “As demand for urban living continues to grow, many developers are shifting their attention to rentals and transit-oriented development. This is helping meet the growing demand from young professionals who want a more urban lifestyle—along with the greater accessibility, connectivity and convenience it brings,” Robertson added.
Downtown Miami’s rental construction pipeline has expanded to more than 5,500 units as of June 2016, according to MDDA’s Mid-Year Residential Market Study. So what type of properties will be coming online in the next couple of years? Miami is well-known for its luxury residential market, but are developers adapting to the needs of young professionals?
“Residential developers are already putting more value on location versus size, and understand the benefits of creating a critical mass of people. We’re seeing this trend unfold at all tiers of the market, and primarily in the middle-market,” Nitin Motwani, principal & managing director at Miami Worldcenter Associates (a joint venture between the Falcone Group and Centurion Partners, which is behind Miami Worldcenter, one of the largest development projects in the U.S.), told MHN.
Miami Worldcenter is shaping up as an iconic mixed-use project spreading across 27 acres in the heart of Downtown Miami. The development will feature 1,200 market rate, transit-oriented apartments, including smaller units tailored for young professionals. More precisely, Seventh Street Apartments will satisfy the needs of those looking to be in the middle of the city, in close proximity to transportation options and the new amenities that Miami Worldcenter will bring.
“Apartments within the project will be modest in size by comparison with other properties in the market, allowing them to be optimally priced for residents seeking a well-located, well-priced, amenity-rich option. On the whole, Miami Worldcenter offers a variety of residential options, from studio apartments to luxury rentals and condos,” explained Motwani. Future residents of Seventh Street Apartments will benefit from the 20,000 square feet of ground-floor space for shops and restaurants, public gathering places, pool deck overlooking downtown, fitness center and more. In terms of transportation, the development is connected to the BrightLine’s Miami Central Station, the gateway to regional train service north to Orlando, South Florida commuter rail and Miami’s intra-city Metrorail system.
Making Miami More Transit-Friendly
In the meantime, MDDA is also trying to help ease traffic and transit in the heart of the city, known for its love of cars. Current transit projects include: Biscayne Green, which will eliminate eight lanes of traffic along Biscayne Boulevard, transforming it into a pedestrian promenade; the $13 million Flagler Street renovation; and Baywalk, a linear bike and pedestrian path spanning the perimeter of Biscayne Bay.
What will happen in the next half-a-decade? With such an influx of millennials, investments and developments, Miami will be one step closer to becoming a 24/7 world-class city. “More than 20,000 new residents are anticipated to move to downtown over the next four years and with them will come additional investment. For example, Downtown Miami’s retail market expects to usher in 1.4 million square feet of new retail space over the next three years,” Alyce Robertson said.
The new retails spaces include the Shops at Brickell City Centre opening this coming week; the 30-acre Miami Worldcenter and the 3 million square-foot All Aboard Florida’s Miami Central. “All of these projects include multifamily assets with walkable, pedestrian-friendly designs and direct access to public transit. Additionally, more than a dozen new hotels will open their doors in Downtown Miami over the next few years, bringing more than 4,000 additional rooms to the area,” concluded Robertson.
The Affordability Challenge
In order to retain the young professionals moving in, the City of Miami needs to focus on creating an attractive, well-connected and sustainable environment for the future, while also motivating developers to do the same. This also includes focusing on creating affordable residential units as well. “We can always do more to secure additional revenue for true affordable housing development. There’s a significant need for subsidized housing throughout Miami-Dade County, and the funding streams for those types of developments cannot keep up with demand,” Motwani told MHN.
So far, Miami has seen successful affordable housing projects in areas where public land subsidies are available, such as Overtown and West Brickell. “We need to prioritize more of these developments, especially in proximity to public transit,” Motwani concluded.
Images courtesy of Miami Downtown Development Authority and Miami Worldcenter