During the Florida Land Boom, a housing corporation led by employees of the Miami National Bank purchased the Prince Edward Court Apartments. The housing corporation acquired the building in 1925 for $175,000 to provide affordable housing for bank employees. The corporation offered tenants—mostly unmarried male bank employees—affordable rents at a time when housing prices in Miami had reached unprecedented rates. The employee managed development is potentially the earliest example of workforce housing in Miami.
The Great Depression had a significant impact on the housing market. Due to high-levels of unemployment, many homeowners were unable to make their monthly mortgage payments, resulting in an unprecedented amount of foreclosures. By the spring of 1933, more than half of all home mortgages in the U.S. were in default and more than 1,000 properties were being foreclosed on per day nationwide. That same year, Congress passed the Home Owners' Loan Act to provide much-needed relief to homeowners. The Act established the Home Owners' Loan Corporation (HOLC) to purchase and refinance mortgage loans in default. Using federal bonds, HOLC acquired at-risk mortgages from lenders and modified the terms to be more affordable to burdened homeowners by extending the repayment schedule to a 15-year period. By 1935, HOLC spent more than $3 billion to acquire and refinance more than 1 million mortgages, helping to reduce the rate of foreclosures. This event was important to the history of housing policy because it established the precedent of a long-term, self-amortizing mortgage, which would eventually become the standard in housing finance.
In response to the housing crisis generated by the Great Depression, Congress passed the National Housing Act in 1933. Intended to stimulate mortgage lending and construction industry, this landmark housing legislation established the Federal Housing Authority (FHA). Through the FHA, the federal government insured home mortgages issued by approved lenders to protect them against losses on mortgages they originated. This federal guarantee significantly lowered the risk to lenders, which allowed them to make more affordable mortgages available to buyers. The FHA also required that the mortgages it insured were long-term with fixed rates and a high loan to value. These guidelines eventually became standard mortgage industry products, fundamentally reshaping the housing finance system and effectively promoting homeownership throughout the nation. Between 1934 and 1936, 4,000 families in Florida received FHA-backed mortgages. Yet the act did not overturn racist lending practices. During this time, FHA's field office in Miami excluded black homebuyers from home financing.
The National Housing Act of 1937 (Wagner-Stegall Act) established the U.S. Housing Authority and provided $500 million in loans to state and local housing authorities to finance the construction of public housing nationwide. Significantly expanding the supply of housing allowed legislators to create much-needed affordable housing for low-income residents, create jobs, and also engage in slum clearance. This program replaced a much smaller-scale New Deal initiative that had developed some low-cost housing, including the very first public housing project in the country, Techwood Homes in Atlanta. Under the new law, federal low-interest loans would go to local housing authorities to cover most of the project costs, while the capped rents would cover operating costs. This legislation dramatically increased public housing nationwide. By 1940 there were already over 500 public housing developments either completed or under construction in both urban and rural sections of the country. Within just 3 years of this legislation, the newly formed Miami Housing Authority was already managing over 1,000 units of public housing.
In 1938, the Federal National Mortgage Association (FNMA) was charted to acquire FHA-insured mortgages from then struggling private lenders to stimulate much-needed home lending activity. FNMA, later known as Fannie Mae, was authorized to issue bonds to buy, hold, and sell FHA mortgages, effectively creating a secondary mortgage market. The program was designed to address the massive level of mortgage defaults and foreclosures by providing bank lenders with cash to fund new home loans. Individual borrowers covered the cost of the bonds through their mortgage payments. FNMA would be modified significantly over the years and become a central part of the nation's secondary mortgage market.
The landmark Housing Act of 1949 established providing a "decent home in a suitable living environment for every American family" as a national policy objective. This legislation was the first major federal effort to address the needs of cities in the postwar period. The Act authorized new federal funding for localities for slum clearance and urban redevelopment initiatives. To redevelop substandard residential properties, jurisdictions were able to acquire federal funds for acquisition activities, demolition, and site preparation. The Act also provided funding for the construction of 810,000 public housing units to replace the demolished slum properties, increased and extended Federal Housing Administration mortgage insurance, and provided resources for housing research and technical services. Substantially more low-income housing was razed than built with this program, however, and by 1954 just 25% of the proposed 810,000 units had been completed nationwide, in part due to congressional underfunding and real interests undermining local public housing construction. Slum clearance efforts in Miami, as in other cities, were severely limited by the effective lobbying efforts of landowners as well as and political infighting and resistance at the city, county, and state levels. During the 1940s and 1950s, white landlords owned over 70% of all the residential properties in the Overtown area. In 1947, deteriorating, wooden shotgun shacks still made up close to 80% of all of the housing stock in Overtown.
In 1953, administrators recommended a more comprehensive urban renewal program than the Housing Act of 1949, which predominately emphasized public housing. President Dwight D. Eisenhower supported the modifications and the following year Congress passed the Housing Act of 1954. This program provided local governments the flexibility to use federal funds for the commercial and institutional development as well as housing. The Act also encouraged more comprehensive planning by requiring local governments that received funds to provide a 'workable program' to improve declining neighborhoods. These program plans were required to include citizen participation, a relocation plan for displaced families, and land-use analysis, among other provisions. While these changes increased the participation of local governments, many of the urban renewal projects created business or commercial districts in cleared slum areas rather than improving housing conditions. Furthermore, Congress routinely cut back on funding for public housing throughout the 1950s.
Housing and Urban Development (HUD) became a Cabinet-level agency after President Lyndon B. Johnson signed the Department of Housing and Urban Development Act in 1965. HUD was created to oversee federal housing programs that were expanded in the Act, including increased funding for affordable housing and rent subsidies for the elderly and disabled. In 1966, Robert C. Weaver was appointed the first Secretary of HUD, becoming the first African-American Cabinet member in U.S. history. HUD is now the principal Federal agency responsible for programs related to the nation's housing needs, fair housing opportunities, and improving and developing communities.
The Housing and Community Development Act of 1974 established the first national rental voucher program in the nation, Section 8. The Section 8 program is administered by the U.S. Department of Housing and Urban Development and provides low-income households with a voucher to subsidize rents for eligible units on the private rental market. To qualify the Section 8 program, the owner of the unit must agree to participate and the rental unit must be inspected and meet certain quality and size requirements. By the end of 1976, over 100,000 low-income households were using Section 8 subsidies. Between 1974 and 2009, the program assisted more than 2 million households, more than any other federal housing program. As of 2016, there are 16,000 families participating in the Section 8 program administered by Miami-Dade County.
In 1984, Miami-Dade County established a Documentary Surtax program (Surtax) to finance the development of affordable housing. Miami-Dade County was the first county in the state to assess the discretionary documentary stamp tax. The program is primarily administered by Miami-Dade County Department of Public Housing and Community Development and mostly serves very low and moderate-income households. It is financed through a tax on deeds and other documents related to property transactions. A total of $460 million in Surtax revenue was generated between 1984 and 2008. These funds can be used to finance the acquisition, construction, and rehabilitation of multifamily rental housing as well as to provide homeownership assistance through affordable second mortgages and the rehabilitation of single-family homes.
Established by the Tax Reform Act of 1986, the Low-Income Tax Credit (LIHTC) provides incentives for the private market to invest in the development of affordable rental housing. The program has funded the development of more than 2 million rental units nationwide between 1986 and 2011. The program encourages private investment in the construction, preservation, and rehabilitation of affordable housing by providing investors with a tax credit over a 10-year period that reduces their federal income taxes. Affordable housing developers acquire and sell tax credits to investors, allowing them to raise capital for their project. The program has become one of the primary vehicles for affordable housing development in the country. As of 2015, there are over 200 housing projects-roughly 29,000 affordable units-that have been funded through the tax credit program in Miami-Dade County. LIHTC properties built in Miami have in some circumstances been correlated with neighborhood-level increases in housing prices and incomes.
The National Affordable Housing Act of 1990 was the first major piece of federal housing legislation in nearly a decade. The Act created the HOME Investment Partnership (HOME) program, which provides grants to participating states and localities. This program is administered by the Department of Housing and Urban Development and is the nation's largest federal block grant program focused specially on affordable housing development. The program was designed to extend the supply of affordable housing for lower income households and covers a broad range of homeownership and rental development activities, including acquisition, rehabilitation, and down payment assistance. In 2017, the City of Miami, City of Hialeah, City of Miami Beach, City of North Miami, City of Miami Gardens, and Miami-Dade County received a total $6 million in direct HOME allocations.
In 1992, the Florida Legislature passed the William E. Sadowski Affordable Housing Act. The legislation created a dedicated funding source for affordable housing based on a documentary stamp tax paid on all real estate taxes. Most of the funds are dedicated to the State Housing Initiatives Partnership (SHIP) program, which is distributed to county and city governments throughout the state. The SHIP program is mostly focused on homeownership and can be used for new construction, rehabilitation, acquisition, as well as homeownership counseling, among other potential uses. The City of Miami, City of Hialeah, City of Miami Gardens, City of Miami Beach, City of North Miami, and Miami-Dade County receive annual allocations of SHIP funds. In 2016-2017, the Miami area received almost $7 million in total SHIP funding.
In the early 1990s, there were over 8,000 homeless residents in Miami-Dade County. In 1993, the Miami-Dade Board of County Commissioners created the Homeless Trust to help alleviate this problem by advising the Board of County Commissioners on issues related to homelessness and directing and implementing a countywide homeless strategy. The Trust also administers the 1% Food and Beverage Tax, a local funding source dedicated to homelessness and domestic violence shelters. This unique funding source was established in 1993 after a coordinated effort by local leaders, the Miami-Dade Board of County Commissioners, the Florida legislature, and Governor Lawton Chiles. This program is the first dedicated source of tax funding focused specifically on homelessness in the country.
The Florida Fair Housing Act was amended in 2000 to include affordable housing as a protected class. The Florida Fair Housing law was modeled on the federal government's Fair Housing Act. As such, it prohibits housing discrimination based on race, national origin, sex, disability, familial status, or religion. The law also uniquely prevents discrimination against public or affordable housing developments. The section states, "It is unlawful to discriminate in land use decisions or in the permitting of development based on the source of financing of a development or proposed development." This historically significant amendment prohibits local governments from treating differently or preventing the development of affordable and public housing simply because it is affordable housing. This Florida law was passed after the County Commission of Lee County rejected a request by a nonprofit to construct affordable housing for farm workers.
In the early 2000s, housing prices increased dramatically particularly in the Miami area. This national boom in housing prices contributed to a massive increase in mortgage lending, which allowed homeowners to extract almost $2 trillion in home equity from 2001 to 2007. The rising cost of housing encouraged lenders to loosen their underwriting standards and offer high-risk mortgages like subprime mortgages to borrowers. There was a substantial increase in foreclosures in both the subprime and prime mortgage markets when prices began to flatten in 2006. By 2009, housing prices in South Florida had decreased by 36%, and almost half of all borrowers in the Greater Miami area were underwater on their mortgages, meaning they owed more than their homes were worth. Formerly hot housing markets in the Sunbelt were severely impacted by declining home prices and rising foreclosures. Florida, California, and Texas accounted for 33% of all foreclosures in 2013.
Congress established the Neighborhood Stabilization Program (NSP) to help areas that suffered high levels of foreclosure and abandonment in 2008. The program provided grants to purchase and redevelop foreclosed homes. In 2009, a consortium of six Miami-area nonprofit organizations successfully solicited an $89 million NSP grant to serve communities throughout the county that were especially hit-hard by the housing crisis. The Miami-Dade NSP Consortium used grant funds to acquire vacant properties and redevelop them into affordable housing. Rehabilitated properties were converted into affordable rental units or homeownership opportunities for local families. The consortium also provided homebuyer education and mortgages. In addition to addressing the immediate problem of widespread foreclosures, the program has worked to increase affordable housing supply in Miami.
The collapse of the housing market did not impact all areas of the nation equally. Areas such as South Florida that had experienced widespread speculation prior to the recession saw a larger fall in housing prices and a greater increase in foreclosures than other parts of the country. In response, the Obama administration announced the creation of the Innovation Fund for the Hardest-Hit markets. Over the next several years, Florida received over $1 billion in federal funds to assist homeowners. The Florida Hardest Hit Fund provides mortgage assistance to the unemployed, proving funding for up to twelve months of mortgage payments until a homeowner can resume full payment. The fund also used is to cover delinquent mortgage payments for homeowners who recently found employment. The fund was accused of mismanagement and widespread delays, however, and in 2013 the federal government opened an investigation into Florida's program. The fund reopened in 2014 and continues to provide assistance to homeowners.