HUD'S Mixed-Income Housing and Dubious Tax Incentives Need to Go
Affordable and Workforce Housing Aren’t the Only HUD Fictions That Should be Reformed.
Once again, Miami-Dade shows the problem on the ground—and its consequences. In a previous report, Restoration News exposed the fiction of the Department of Housing and Urban Development (HUD) definition of “affordable” and “workforce” housing, and its harms on the ground in the epicenter of America’s real estate boom, Miami-Dade County, Florida. Miami-Dade also reflects the shift in support for President Trump among working- and middle-income Latinos and Blacks.
Specifically, “affordable” and “workforce” housing are neither affordable nor for workers. Instead, they serve higher-earning white collar out-of-towners who tend to vote moderate or Democrat.
But other fictions, built on top of this one, do even more harm, because they create avenues for wealthy developers, tied to Democratic interests, to extract wealth from poor neighborhoods. These fictions revolve around “Mixed Income” Housing as well as tax credits tied to affordable housing and to the development of low income areas.
Digging into the effects of these fictions in Miami-Dade shows their real-world consequences to members of President Trump’s growing minority coalition. These are working-class residents and small business owners, people displaced on a local level by the same forces (government-backed crony capitalism) that have hurt President Trump’s blue collar laboring base throughout the country. Investigating their situation and its causes also shows the human—and political—benefits of reform.
Mixed Income Housing . . .
“Mixed income” housing began as a supplement to affordable housing in the 1990s. Congress created programs “to support the development of mixed-income housing as a replacement for traditional public housing,” on the logic that the presence of higher earners would lift neighborhoods out of poverty. The reason for this shift seemed clear enough at the time. Despite thirty years of federally funded public housing by HUD, the black community’s situation hadn’t improved, and public housing projects became “virtual war zone[s].” But this was a misreading of cause and solution. We now know that the outsourcing that President Trump is reversing with tariffs is what hurt the black working class community, just as it hurt the white working class—and changing housing policy from public housing to publicly-backed private housing only exacerbated the problem.
In this case this policy change brought in a “free market” that wasn’t really free. It was backed by politically connected developers with a lock on city and county contracts who then used federal money to build “mixed-income” developments and make profits. Indeed, according to one recent study, mixed-income has come to mean not just a complex built for “moderate and low-income families” but also one with only a small percentage of truly affordable units, which are often included to qualify for municipal subsidies.
This sleight-of-hand, allowing mixed income housing to include only a small percentage of affordable units, showed up most recently in another HUD-funded Miami-Dade development. This time the cost came to $39.9 million, and this time the site was Overtown: The center of the black community in the city. Since the 1960s it has seen a series of liberal disasters, ranging from redevelopments to outsourcing to a hyper-politicized “War on Crime.” The beneficiary: The “Culmer Place/Culmer Gardens public housing sites,” but more specifically major Democratic donor and redevelopment contractor Atlantic Pacific Companies.
Atlantic Pacific will increase the number of units from 226 to 1,056. This includes 621 affordable housing units, 212 market-rate units, 10 workforce townhomes, and only the existing 226 public low-income units. The Area Median Income for Overtown is somewhere between $18,000.00 and $30,000.00, but the full county area median household income (AMHI) is $79,400.00. That means occupants of the 621 “affordable housing units” could conceivably make $111,300.00 in income, triple the average for the neighborhood. Additionally, the 212 market-rate units are guaranteed to be more expensive than affordable housing. Only around 21 percent of the projected units are likely to service any resident currently living in the Overtown area.
. . . and the People Being Hurt
The people being displaced or built around, meanwhile, are “concerned about the dissolution of the Overtown Community Oversight Board, which once ensured community input in development decisions.” This dissolution will lead residents to “bear the costs of [development]” without input “while outside investors reap the rewards.” As one resident puts it to WLRN:
Development should benefit the people who have been here the longest. Without binding community benefits agreements — guaranteeing affordable housing, local hiring…we risk making the same mistakes of the past.
Local historian and lifelong resident Keith Ivory shared similar concerns to The Miami Times, South Florida’s oldest black newspaper, noting that urban renewal projects have often failed to benefit the people who need it most. “Overtown has become a golden egg for developers,” Ivory said. “Even though there are incentives for developers to come in under the guise of ‘I'm building in a low-income neighborhood,’ the residents never end up really benefiting from it.”
The Tax Credit Boondoggle, its Uses on the Ground, and the People it Uproots.
With the advent of Mixed Income Housing in the 1990s, along came the Low-Income Housing Tax Credit (LIHTC) program. HUD calls it “the most important resource for creating affordable housing in the United States today.” It allocated the equivalent of $10 billion to state and local LIHTC-allocating agencies for the “acquisition, rehabilitation, or new construction of rental housing targeted to lower-income households.”
Again, Miami-Dade gives a sense of exactly how some of this $10 billion gets used in practice. The site is Little Haiti, a historically lower-income Haitian neighborhood, and the player is the Miami-Dade uber-developer Michael Swerdlow. This developer has contributed to the county’s Democrats; and employed as a lobbyist the county mayor’s chief political strategist, Christian Ulvert, who also works for three of the county’s other Democratic commissioners. In 2024 Swerdlow responded to a modest county request—privatize and renovate two public housing apartments of 230 units total—with what the Miami Herald calls a “gargantuan” proposal: A 65 acre remaking of Little Haiti at the projected cost of $2.6 billion.
This proposal includes a Home Depot; 700,000 square feet of parks and recreational areas; 1,400 affordable housing units "tailored for low to very low-income households” including those already living in the new public housing apartments soon to be torn down; and 3,500 workforce housing apartments for residents earning up to 120 percent of the county’s median income. The median income in Little Haiti is $36,329.00, making it unlikely that most Little Haiti residents can afford this “affordable housing."
The Miami Times thinks the problem is worse. In a recent article about the anger sweeping through the community over this new development, it reports that “while the developer’s plan designates 60% of units for workforce housing—reserved for those earning $90,000 or more—only 40% will be affordable.” It’s not clear where these numbers are coming from, since Swerdlow has released few details of the plan. But community leaders speaking out are clear that the finished apartments will be beyond the community’s means—even though many of the community members will help build the apartments. One resident told The Times, “The majority of our members who are building these kinds of projects are making less than $40,000 a year. The prices being set are simply out of reach for most Miamians.”
Swerdlow will finance the “affordable housing component” of his proposed “hub of . . . inclusivity” that’s unaffordable for most of the neighborhood with federal tax credits.
Nothing about a play like this makes housing more affordable to anyone—except the developer, who then donates to the Democrats backing his play. And what about the Haitians living in the neighborhood? As one resident, Kaleena, told the Miami Herald,
It’s frustrating because we don’t know the details, but you get used to where you are. The houses are in pretty good shape. I like it the way it is. Also, I don’t care for high-rises. I’d rather be on the ground.
The “Opportunity Zones” Tax-Credit Fiction . . .
Low-Income Housing Tax Credits (LIHTCs) are not the only tax move at play. Another is the Opportunity Zones Tax-Credit, provided by the otherwise beneficial 2018 Tax Cuts and Jobs Act signed by President Trump. This provision soon “began catching the eye of savvy investors . . . eager to get in on a program that provides incentives for new investment in low-income areas,” according to one local CPA. One of these investors was Miami-Dade’s Tony Cho, whom Restoration News has investigated in a previous report.
Cho was the backer of what was until Swerdlow’s 2024 proposal probably the biggest development project in Miami-Dade, the Magic City Innovation District in Little Haiti. Cho picked the area to develop because it was an “opportunity zone,” which gave him tax benefits. He initially promised to invest in affordable and workforce housing on the development. Then he scrapped the idea and opted to make all of the units market rate. To “make up” for this, he offered the Little Haiti Renovation Trust, a local organization which represents actual citizens of the neighborhood, two lump payments of $3 million each to improve the neighborhood. As one critic writes, the small amount of these payments are “dwarf[ed]” by the “advertised $1.4-billion venture,” which, when complete, will cause property values to skyrocket and Cho’s profits to soar. This is a long-term government-backed bait-and-switch, at the expense of local citizens.
Notably, Cho, a well-known progressive who has made at least one appearance at the World Economic Forum in Davos, chose to justify his moves using the well-worn Democratic standbys of race and climate. In 2015, he was part of a bevy of well-off progressive real estate investors arguing against naming Little Haiti “Little Haiti” at all, despite its predominant Haitian population, because a century ago the neighborhood had been majority African American. Having played his part trying to delegitimize Haitians’ claims to the neighborhood, Cho and other developers then bought the land the Haitian Americans rented and pushed many of them to eviction, beginning the destruction of a neighborhood known for its churches and thick community.
. . . and the Small Businesses it Drives Out
Those who weren’t displaced saw their businesses driven to destruction. Case in point: store owner Marie Jefferson, who had made a steady living for 20 years with her business until new owners bought the building. She and her neighboring store owners saw their rents triple, “in Jefferson’s case to $6,000 a month for a 1,100 square-foot space.” Speaking to the Miami Herald, Jefferson said that one of these neighboring store owners had just “closed up shop.” Meantime, Jefferson laments:
Business is so slow she doesn’t know if it can survive much longer. “Rent is up high,” said Jefferson, 62, pointing to the bulging veins in her forehead and speaking in an agitated mix of Creole and English. “I feel stress, terrible. I don’t have enough money.”
By 2020, Cho had jumped on the climate train, arguing that “vertical” development was the only way to save Florida’s climate. Translation: Towering buildings opposed by many residents but cheap for developers to build, while providing many more rent payers per city block of development. Recently Cho has poured his fortune into “climate” projects in Miami and Jacksonville, Florida, allying with the Democratic Mayor of Miami-Dade to make his causes “sustainable” and “vertical”—and even more profitable.
The Benefits of Reform: The Testimony of Lavern Spicer
One person who sees the benefits of potential reform is Lavern Spicer, a black Republican who was the 2020 Republican candidate for U.S. House District 24 in Miami-Dade. Spicer, who has lived in District 24 for 25 years, founded Curley’s House Food Bank to feed local families every Tuesday and Thursday. She has watched over the years as new housing developments promise and then fail to support the area's low-income residents.
District 24, traditionally a Democratic stronghold, is represented by Congresswoman Frederica Wilson, a longtime ally of President Biden’s HUD Secretary, Marcia Fudge. According to Spicer, Wilson's collaborations with local officials have resulted in the displacement of residents. The only beneficiaries, in her read, have been private developments backed by public funds using the fictions of affordable, workforce, and mixed-income housing and the resulting tax credits and incentives that come with them—along with the increased property values. In Spicer’s view, one supported by facts, this is not the free market but crony capitalism, where politically connected developers exploit government resources to their advantage.
“People in my community vote based on their interests, not labels,” Spicer told Restoration News in an interview. “When you’re trying to keep the roof over your head, you don’t care what people label themselves. You care what they do.” If Trump’s Republican Party leveraged HUD to help Spicer’s community, she thinks it’s likely he would gain more votes among a demographic already beginning to come his way, but also disillusioned by current political trends. These are voters who helped elect President Trump but who are turned off, judging by recent polls, from what they see as Elon Musk’s across-the-board cuts to government which they worry might end up affecting programs that benefit them.
Spicer, for one, argues that if Trump takes a more hands-on approach to tackling the practical issue of housing, he could earn back the trust of these voters: demonstrating a commitment to the needs of these communities, distinguishing himself from both parties, and potentially securing Republicans crucial support in future elections.
How to Do It
The way to go about doing this resembles the rest of Trump’s mandate: unapologetically cut off the spigot of false funding. In this case, that means changing the definition of affordable and workforce housing to benefit communities actually in need; and targeting tax credits and incentives to projects which actually address those communities.
The Trump administration should require any project receiving HUD funds or tax credits to measure “affordable” and “workforce” housing by the actual area they’re in; so that Miami-Dade is not the standard for working class Latinos and blacks in lower income areas like Sweetwater and Overtown. HUD should require counties receiving federal funding, like Miami-Dade, to be completely transparent about requirements and processes by setting up an easily accessible online portal with definitions and numbers clearly laid out, and releasing straightforward public announcements about negotiations with developers to the electorate.
Such reforms, which would make HUD work for Republicans for the first time, would be fitting for Donald Trump, our first real estate developer turned president who has made insisting on transparency a major part of national politics for the first time in generations if not centuries. These reforms would also give Republicans a “meat-and-potatoes” issue to use against Democrats, who are working to make their version of affordable housing (vertical developments backed by big landlords) their issue. Finally, they would genuinely help the working class and small business owning minorities voting Republican.
And, if Miami-Dade is any indication, reforms like these would bring President Trump more of these swing voters he has already, unprecedentedly, won.
Picture by Pietro. https://creativecommons.org/licenses/by-sa/3.0/deed.en