This Florida Mall Has Gucci, Prada… And Soon Affordable Housing?

In Bal Harbor, Florida, an oceanfront community north of Miami Beach, an upscale shopping center says it wants to help address one of the country's — and Florida's — most persistent problems: a lack of affordable housing.

It is an unexpected step for a shopping temple that offers Gucci, Chanel and Rolex. Affordable? Here?

But in a rare case of bipartisan agreement, the Florida Legislature last spring passed a law intended to encourage projects like the mall's owner, Bal Harbor Shops, has in mind. The law, called the Live Local Act, allows developers to bypass certain local zoning rules and qualify for tax breaks if their projects include enough “workforce housing.”

Local officials across the state, stripped of their power to say no, don't like it. And nowhere has there been more resistance so far than in tiny Bal Harbour.

The mall's owner, Whitman Family Development, has wanted to build a hotel next to the mall on Collins Avenue, the village's main drag, for 40 years. Neighbors and elected leaders have repeatedly rejected the idea. But when the new housing law was passed, the owner saw a way out.

The company last month applied to build a 20-story hotel and three residential towers with 600 units, 240 of which would be priced low enough to qualify as workforce housing under the law. If the plan meets the law's requirements, the village of about 3,100 residents — where the median household income is about $86,000 a year, well above the state average — won't be able to stop the plan.

After the application was submitted, angry residents packed the village hall to denounce the project. The village council felt ambushed and promised to try to stop this. Then the mall's owner sued the village last week, in what appears to be the first time a developer has asked the court to enforce the new law.

It's a small-town battle over a big issue, with both sides making reasonable points and no compromise in sight.

“The law doesn't make sense given the way it's being used by the developers,” said Neca Logan, 60, president of the Bal Harbor Civic Association and a lifelong village resident. “This will change our community for the worse.”

The law is similar to others states have passed in recent years that limit local governments' ability to block new projects if rent burdens escalate; the hope is to accelerate construction and fill the current national housing shortage. But across the country, local officials are pushing back.

The Bal Harbor case is the most high-profile dispute over the Live Local Act yet, but has rattled municipalities across Florida since Gov. Ron DeSantis, a Republican, signed it into law last March.

Miami Beach refused when the owners of the famed Clevelander Hotel on Ocean Drive put forward plans for a restaurant and 30-story residential building. (The owners have since reduced it up to 18 stories.) Commissioners in Pasco County, north of Tampa, voted to prosecute any developer who tries to use the law to build apartments on industrial or commercial property. At least two municipalities in Miami-Dade County, Doral And Florida citytemporarily suspended all development after the law was passed.

Municipal leaders say they are irritated with the Republican-controlled state government for overdoing local authority. State lawmakers see the law, which has led to a slew of shelved developments being dusted off and redesigned, as a resounding success. Developers say that without the law, they would have no incentive to build anything resembling workforce housing.

“I'm the first to admit that including multifamily has not been in the plan since the beginning,” said Matthew Whitman Lazenby, the CEO of Whitman Family Development, the mall's owner. His grandfather, who opened the shopping center in 1965, envisioned it as a central village destination with a mix of commercial uses.

“If we can do that and at the same time do our part to solve a real social crisis,” Mr. Lazenby said, “it seems like that's an opportunity we shouldn't refuse.”

The units designated as affordable would be rental properties; a spokesperson for the mall said it was too early to know the going rate. Mr Lazenby has cited hospitality and service workers, teachers, nurses and police officers as examples of people who work in Bal Harbor but cannot afford to live there.

Several employees of stores and restaurants in the mall complained in interviews last week about the long, expensive commutes and said they would like to live in Bal Harbor if the rent was within reach; they asked not to be identified because they did not have permission from their employers to speak to the news media.

Renters in the Miami metropolitan area are bearing the brunt of the cost of land, according to figures a new report from the Joint Center for Housing Studies at Harvard University, which measured how many people spent at least 30 percent of their household income on housing. The report also found that Florida was the most unaffordable state for renters, followed by Hawaii and Nevada.

Miami has a lot of new rental properties, but most are for the luxury market and not for workers in the region's service economy, who work in hospitality, health care and retail, said Ned Murray, deputy director of Jorge M. Pérez. Metropolitan Center at Florida International University. Public sector workers, such as teachers and police officers, are also often left out.

Anthony De Yurre, a South Florida real estate attorney who serves on the Florida Chamber of Commerce board of governors and was involved in crafting the $700 million bill, said what wealthy homeowners actually objected to was that less affluent people would move to their neighborhood. .

“When you go to these meetings, the first reaction you get is: 'We don't want those people,'” Mr. De Yurre said. “These are the same people who are teachers in our communities, service people and hospitality people.”

The law is certainly not a panacea. Under the terms, at least 40 percent of homes in a proposed project must be reserved for people making up to 120 percent of the local median household income. In Miami-Dade County, 120 percent of the median is currently about $90,000 per year. But Dr. Murray said most service sector workers in the province made less than $20 an hour.

“If you calculate that, we're looking at tenants making between $40,000 and $50,000 a year,” he said, adding that the law “doesn't meet that real need.”

Residents and local officials see another problem: that the law makes it impossible for cities and towns to block excessive projects that would worsen traffic and overwhelm public services. The backlash was so great that state lawmakers are considering changes to the law intended to address some of the concerns.

“We are very sensitive to climate change and sea level rise and the impact on infrastructure that we deal with here every day,” said Bal Harbor Mayor Jeffrey P. Freimark. “As a barrier island, I think it's unconscionable to add these kinds of charges.”

In 2021, nearly 90 percent of Bal Harbor residents rejected a referendum issued by the mall to build taller than the current 60-foot limit, which was set by another referendum in 2006. The newly proposed towers would be 85 meters tall – about five times higher. The mall owner notes that the St. Regis Bal Harbor Resort, across the street, is about the same height.

On a recent weekday afternoon, the Bal Harbor Shops were busy with local and international visitors enjoying a late lunch or strolling the open-air aisles filled with lush tropical foliage.

The winter peak season tapered off after Jan. 15, Mr. Lazenby said, but has continued since 2021 through Valentine's Day. A previously approved expansion of the mall – also a sore subject for many residents – was underway, and the surrounding streets were choked with traffic.

“I don't think anyone is against having workforce housing in theory,” Ms. Logan said, “but not how he's trying to do it.”

Conor Dougherty And Verónica Zaragovia contributed reporting, and Alain Delaqueriere research contributed.