Infill and Redevelopment in the Study Area: Challenges and Opportunities
Land Assembly Issues
Useful Tools and Incentives
Local governments are taking steps to encourage the revitalization of their communities. The Eastward Ho! study area encompasses the majority of the areas designated for redevelopment in Southeast Florida. Eight of the eleven designated redevelopment areas in Palm Beach County and all twelve redevelopment areas in Broward County are included. Fourteen redevelopment areas have been designated in Dade County, nine of them in the study area. Cities with targeted areas have made commitments to concentrate certain resources, particularly federal Community Development Block Grant funds, to improve housing, recreation and infrastructure facilities in targeted areas. Many have applied for Enterprise Zone designation to take advantage of the incentives offered to businesses that locate there.
Largely comprised of downtowns and related neighborhoods, these designated redevelopment areas benefit from local government incentives that encourage private investment. Successful redevelopment efforts under way include the Clematis Street commercial district in West Palm Beach, Atlantic Avenue in Delray Beach, Mizner Park in Boca Raton, Las Olas Boulevard in Fort Lauderdale, Harrison Street in Hollywood, the LeJeune-Douglas Industrial Park in Opa-Locka and South Dixie Highway in South Miami. Broader economic development activities guided by strategic plans are also under way in Delray Beach, Hollywood, Boca Raton, Pompano Beach and Deerfield Beach, among others. Nonetheless, obstacles to infill development and redevelopment remain.
Enterprise zones can enhance redevelopment through the identification of existing commercial and industrial sites in need of development. These sites can be marketed to investors looking for development opportunities and to future businesses who will employ people within the area.
Market demand is clearly a significant factor in the success of any development. An ever-changing work force, and market demand can be difficult to predict for the long-range horizon. It is important that public decisions about the allocation of land uses in redevelopment plans be made with a realistic understanding of market absorption rates for the area, the city, and the region. Miscalculation can result in a superabundance of certain land uses that quickly outstrips market demand. Redevelopment plans must be flexible enough to respond to new, unforeseen opportunities.
Developers consider many factors when making infill or redevelopment project decisions including:
All of this is evaluated by a developer and financier based on his or her experience and instinct for matching projects with location and market. Although development is inherently risky, developers and lenders prefer to minimize and calculate the risks that they are willing to take. Thus, many will look for signs that local governments are committed to redevelopment and revitalization. Public investment in infrastructure can be one tangible demonstration of a local government's commitment.
Negative images and perceived obstacles can be as limiting as concrete issues of infrastructure provision and regulatory complication. Negative perceptions on the part of the developer, lender, and public can significantly affect the pace and success of redevelopment. The image of government as unfriendly to infill development or unresponsive to private sector needs will stifle interest in redevelopment and infill development. The belief that an area is blighted, subject to significant criminal activity, or has inferior or overcrowded schools can cause potential homebuyers and business owners to look elsewhere, regardless of the actual extent of the problem. Perceived strong opposition to any change on the part of existing residents can also make the private sector more reluctant to take a risk.
Land Assembly Issues
Land assembly is a fundamental challenge to redevelopment and infill development in the Eastward Ho! study area. Non-contiguous parcels, additional time and money to clear land titles on infill lots, unwilling sellers, and the cost and availability of vacant land all make land assembly difficult. As mentioned other complications include inadequate infrastructure, regulatory conditions and the fact that many portions of the study area, while in need of upgrading, have not yet reached the required state of blight and decline to qualify for special sources of large-scale public investment. It is also important that existing residents are not displaced without receiving appropriate and fair compensation.
Land assembly analysis requires information such as parcel ownership patterns and parcel size tabulation. These can help to identify sub-areas and targeted corridors within which to focus and encourage infill development and redevelopment efforts. For a long time, land analysis of this type had to be done by hand; now, property assessment software allows faster detailed analysis of tax assessor's data.
Four Eastward Ho! sub-areas were analyzed as a part of this project: 1) the Dadeland South MetroRail Station, 2) the Tri-Rail and Metro-Rail Transfer Station in Hialeah, 3) Broward Boulevard Tri-Rail Station in Fort Lauderdale, and 4) the Gateway Boulevard Tri-Rail Station in Boynton Beach. These sites were chosen because of their potential for urban infill, redevelopment and transit oriented development. Each example lies within both the Eastward Ho! study area and a locally designated economic development or redevelopment area. Each example covers a quarter-mile radius around a Tri-Rail station and analyzes the total number of parcels searched; the percentage of industrial, commercial, single-family, and multi-family land uses; property ownership; multiple parcel ownership; and the percentage of residential absentee ownership. Data and analysis can also be provided on four generalized land use categories and include gross building size, living area, price per square foot, year built, most recent sale date, sale price, land value, and assessed property value.
The South Dade site has higher average land values and assessed property value rates for industrial and commercial land use than the other three site examples. Existing buildings at this site are older than the structures at the Broward and Palm Beach sites. The South Dade site is currently comprised of high density development and the analysis reveals higher than average gross building size, living area and little difference in the price per square foot.
The Tri-Rail/Metro-Rail Transfer Station in Hialeah, has a high percentage of industrial, 31%, and single-family residential, 51%, land uses. This is consistent with land uses that correspond to an intermodal type station. This station is used primarily for a Tri-Rail transfer facility to the Metro-Rail system with the provision of parking and drop off facilities.
The Broward site example shows a higher absentee ownership rate, 39% of residential units than the other three examples.
The Palm Beach site analysis reveals no industrial or commercial land use records, however warehouse and shipping uses occur within the quarter-mile analysis radius. Average single-family, multi-family unit sale price, land value and assessed property value are higher than in the other three examples.
A regional corridor analysis was also done for the Dixie Highway corridor through the Eastward Ho! study area. For continuity purposes, Biscayne Boulevard is substituted in place of Dixie Highway when it disappears for an eight-mile stretch in central Dade County. General observations about vacant land in the Dixie Highway corridor analysis are not surprising. Broward County has the fewest vacant parcels along its stretch of Dixie Highway. This may be because the Broward County stretch is shorter from north to south and closer to buildout. Palm Beach County has more vacant land in both the Eastward Ho! study area and is farther away from buildout. Dade County has the most redevelopment potential because it is closest to buildout and many obsolete buildings have already been demolished.
The primary land use along the Dixie Highway corridor through all three counties is commercial which has the highest price per square foot. Land parcels are generally smaller in Palm Beach County with more parcels in common ownership. Commercial versus industrial land use cost per square foot is much higher. Opportunities abound along the Dixie Highway corridor. Renewed interest in passenger service on the FEC rail line could generate new opportunities for mixed use development that is well connected to the bus system around current or future stations.
There is more vacant land within the study area than meets the eye. Digital collection and analysis of property data can be a useful tool, but initial results should be verified before making policy or investment decisions. One of the most important tools for land development investment decisions is easily accessible property and land-records information.
Appendices are available with more detailed site information.
Obtaining conventional financing for infill or redevelopment projects can be difficult. Local governments have indicated that they use the public funding sources such as Community Development Block Grants (CDBG); State Housing Initiatives Partnership (SHIP) funds; various HUD programs; leveraging municipal bonds with state and federal funds; and to a lesser degree, conventional financing. Existing public funding sources are limited and have extensive qualifying requirements that may remove all but the most blighted areas from funding eligibility. Because both public funding and conventional financing are difficult to secure, the majority of redevelopment or infill projects are financed by a quilt of grants, subsidies, program monies, and non-profit sector funds. This reality creates a need for dedicated program managers who can coordinate all of the various funds. Keeping a focus on the final goal is critical.
Regulatory changes allowing greater flexibility in funding requirements for redevelopment and infill development are needed. Public funding programs should be modified to eliminate the requirement that an area reach the "slum and blight" stage of deterioration in order to receive assistance. Ultimately, time, money, and communities can be saved by assisting neighborhoods and downtowns before they need rebuilding virtually from the ground up.
Impact fees should begin to reflect and capture the full cost of different locations and patterns of development. Differential pricing can provide an incentive for development patterns that are more efficient. Tiered impact fee systems for transportation are an example. Sprawling development that results in more trips with longer trip lengths would pay more than compact developments served by transit. Caution should be exercised to avoid unintended impacts on the cost and ability to provide affordable housing.
Contaminated sites, also known as "brownfields", are abandoned, idle, or under-used industrial and commercial sites where expansion or redevelopment plans are thwarted by real or perceived environmental contamination. Some degree of contamination is often found in lands that have been in urban use for many years, especially in the case of old industrial sites or commercial uses, e.g. gas stations, auto repair shops, and dry cleaners that operated prior to widespread understanding of the long-term effects of improper disposal of hazardous materials. Sometimes site contamination can be relatively minor and simple to clean up. At other times, it can be of such size or severity that the cost of cleanup is prohibitive or natural resources like potable water wells are threatened. A primary difficulty in assessing the type and nature of contamination is uncertainty about the past uses of an urban property. The detailed record keeping required by federal law for businesses using or storing hazardous materials is a relatively recent development.
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, commonly known as the Superfund Act, was the first major attempt to combat the problem of hazardous and contaminated waste cleanup on a national level. Superfund is a comprehensive program to inventory and establish priorities for the clean up of contaminated sites at the expense of the responsible parties. In cases where the responsible parties cannot be held accountable, a trust fund has been established to assist with clean up and responding to emergency situations involving hazardous substances.
Even though many contaminated sites in Southeast Florida have been cleaned up, many remain. There are 19 federal superfund sites within the region: one in Palm Beach County, six in Broward, and 12 in Dade. There are also a number of contaminated sites throughout the Eastward Ho! study area that are not eligible for federal superfund monies. These sites, often vacant tracts of land, are difficult for developers to consider for potential development because the full cost of decontamination is virtually impossible to predict.
Useful Tools and Incentives
It is not enough to say that local governments and other stakeholders should promote or encourage the revitalization of the Eastward Ho! study area. Tangible tools and incentives are needed to make real progress.
Some planning tools are general in nature. Urban development boundaries (UDB) are useful for clearly delineating the edge of urban and suburban development. When used in conjunction with transfer or purchase of development rights programs, UDBs can help communities redirect development to desired locations while offering property owners outside the UDB a return on their investment. The Dade County Comprehensive Plan contains a Year 2000 Urban Development Boundary and a Year 2010 Urban Expansion Area (UEA) Boundary indicating areas where additional urban development beyond the 2000 UDB is likely to be warranted between the year 2000 and 2010. Palm Beach County has an Urban Service Area Boundary. Broward County has developed to the edge of the Water Conservation Area, making it the effective urban development boundary.
Planning tools help to create a desired vision for a community and a strategic plan to implement that vision. Using visioning or charette processes, communities can come to a consensus about the community's future.
Public sector development initiatives work to maximize its influence on redevelopment using techniques such as land banking, joint development, and capital improvement programs.
Regulatory tools and incentives provide flexibility and streamline the development review process in a number of ways. They can guide development with regulations sensitive to specific sites and changing market conditions, promote desired types of mixed-use development, and provide flexibility and certainty about the type of development allowable within a district.
Outdated land development regulations, existing non-conformities, concurrency regulations, impact fees, and multiple layers of regulation are problems to overcome if redevelopment and infill development are to be successful. Local governments in the study area are already addressing this challenge in varied ways.
Included in the recommendations are many of the tools local governments are now using with success in different parts of the corridor.
Streamlining all levels of development review and permitting in redevelopment areas can be helpful. An expedited state, regional and local review process for comprehensive plan amendments should be considered for infill and redevelopment projects within the study area. Team permitting could be considered for federal, state and regional permit review. Regulatory incentives can reduce the scope of regulation by exempting infill or redevelopment projects from transportation concurrency requirements. A substantial number of the region's local governments have transportation concurrency exception areas in place including Broward and Dade Counties, Delray Beach, Fort Lauderdale, Hollywood, Hallandale and Coral Gables. Areas designated as Regional Activity Centers or Regional Development Districts may qualify for increased development of regional impact thresholds.
The desire to streamline development review and permitting processes to encourage development must be balanced with the need to ensure compatible and quality development. The needs and concerns of existing residents and businesses must be weighed as well.
Financial incentives include preferential taxation, direct grants, fee reduction or waivers and incentives to lending institutions. Financial tools include tax increment financing and enterprise zones, as well as programs such as the Community Development Block Grant Program and the State Housing Initiatives Partnership. A second round of federally-designated enterprise communities and empowerment zones is expected. Regional tax base sharing, which can reduce fiscal disparities among municipalities within a metropolitan area, should also be examined. The oldest example of tax base sharing is the Minneapolis-St. Paul metropolitan area where 40% of each local government's increase in commercial and industrial tax base since 1971 goes into an areawide pool and is then shared.
Institutional tools help local government more effectively support redevelopment. They include: new entities for land assembly, particularly for areas outside those served by community redevelopment agencies, and community financing consortia to help lenders share the risk and make conventional funding more available; and regional entities to administer particular functions such as mass transit. Currently, Palm Beach, Broward and Dade Counties are jointly exploring the feasibility of a regional transit authority.
Community development tools, such as community policing and community leadership training work to mobilize and enhance resources at the neighborhood and grassroots level.
Development agreements could enable governmental agencies and private interests to use statutory authorities for development and intergovernmental coordination agreements to facilitate desired development coordination.
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Updated on Jan. 10, 1997