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A bright mural located in front of an abandoned lot in Little Haiti, a neighborhood near downtown Miami.
One of the numerous murals decorating Little Haiti, a neighborhood in Miami facing gentrification pressures from the forthcoming Magic City innovation district.
Patrick Sisson

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As sea level rises, Miami neighborhoods feel rising tide of gentrification

Is development in Little Haiti, future home of a $1 billion innovation district, fueled by a changing climate?

Bernardy and Tiblanche St. Fleur have seen a lot from their perch on Miami’s Second Avenue, where they have run a modest grocery store for the last 25 years. Down the block from the famed Mache Ayisyen, a marketplace in the center of the city’s Little Haiti neighborhood, the couple sells food and beauty products that offer immigrants links to their Caribbean birthplaces.

But a short walk from the St. Fleurs’ front door, another community is set to radically change the look of their neighborhood. Magic City, a planned billion-dollar commercial and residential district targeting startups and entrepreneurs, got the go-ahead from city commissioners to break ground last June. The 18-acre mixed-use development was, as of last November, mostly just purple signage, a few scattered office buildings, and a warren of old warehouses. (Magic City’s developers have said no residents or existing businesses will be displaced.) But over the next 15 years, MCID Developers plans to erect buildings as tall as 25 stories, along with a pop-up theme park designed by Cirque du Soleil founder Guy Laliberté; one of the developers told the Miami Herald in 2018 that it can “be the engine that pulls the Little Haiti train.”

“We have nothing against the developers,” says Bernardy St. Fleur. “Maybe it brings more business, maybe rent goes up. There’s been lots of activity, but we’re not anxious yet.”

The shifts coming to Little Haiti fit the traditional big-city displacement narrative, and commercial rents and home prices have already risen sharply in recent years. But activists and advocates see another force at play: a rising tide of climate gentrification.

A term popularized by a 2018 Harvard study of Miami real estate transactions that found rising property values in higher-elevation neighborhoods, climate gentrification has become a rallying cry for activists in Miami neighborhoods such as Little Haiti (which is 7 to 14 feet above sea level), Liberty City (the backdrop of the film Moonlight), and Allapattah, traditionally disinvested areas with large populations of black and Latino residents which also happen to be on higher ground. Activists nationwide have used the concept to frame conversations about how a new era of natural disasters has a disproportionate impact on the poor, including in fire-ravaged parts of California. Miami’s City Council, which has to plan for as much as 2 feet of sea-level rise by 2060 per city estimates, even passed a resolution in 2018 to examine the impacts of climate gentrification.

“People won’t say climate change is the primary reason developers are buying in Liberty City or Little Haiti,” says Meena Jagannath, cofounder of the Community Justice Project, a local nonprofit that focuses on legal aid in service of racial justice. “But it’s increasingly becoming a major factor.”

A man wearing a black cap holds up a sign at a protest against a new development in Miami’s Little Haiti neighborhood.
Felton Pierre marches during a rally against the proposed Magic City Innovation District, Thursday, June 20, 2019, in the Little Haiti neighborhood of Miami.
AP Photo/Lynne Sladky

But documenting the cause and effect of climate gentrification⁠—linking the flow of money and investments to the flow of water onto our coastlines⁠—is a much knottier proposition. Little Haiti, for instance, borders Wynwood and the Design District, glitzy areas filled with hip restaurants, boutiques, and Instagrammable graffiti murals. Jesse Keenan, a researcher on the Harvard study, tells Curbed that “developers aren’t necessarily making decisions with climate change as a first-order consideration.”

Either way, Miami neighborhood activists are sounding the alarm about development pressure. “Gentrification is coming forcefully: developers buying the major corners, raising the rents, forcing renters onto month-to-month leases,” Haitian playwright, activist, and Little Haiti bookstore owner Jan Mapou recently told Hyperallergic. Miami has the most cost-burdened renters of any major American city; half of renters pay at least half their monthly income for housing, and the city’s tourist-driven economy keeps wages low.

“Gentrification is a cycle that’s been around before I was here, and will be after I’m here,” says Kilan Ashad-Bishop, a biomedical scientist and a vice chair of the Miami Climate Resilience Committee. “I want to talk about how we prevent the most vulnerable among us from becoming more vulnerable.”

“Profit and equity have a very hard time co-existing”

Climate gentrification is one predicted result of what many analysts say is a coming coastal real estate crash. A 2018 report from the Union of Concerned Scientists noted that most coastal real estate in the U.S. doesn’t factor future flooding risk into its present value. That’s terrifying for two reasons: By 2045, increased flooding is expected to lead to $135 billion in property damage and force 280,000 Americans to adapt or relocate; and two, property that floods, or is seen to have a significantly higher flood risk, will eventually become unwanted, unsellable, and uninsurable, a stranded asset weighing down investors and the national economy. (Some have used the term blue-lining in discussing this new rash of flood-prone properties that won’t be able to get insurance.)

Climate gentrification, therefore, is about not wanting to be left holding coastal land when the music stops. While it’ll be years before we get a better sense of the speed at which cities and markets will react to this phenomenon, Keenan says the first sign will be how soon banks stop offering mortgages and development capital in flood-prone areas and start fleeing to higher ground, and how quickly insurance rates rise due to climate instability.

“I’ve been telling members of the business community to sell low, buy high” says Philip Stoddard, an environmental activist, biology professor, and mayor of nearby South Miami, in reference to land elevation.

As that shift takes place, Keenan says, local governments, many of which are already facing financial pressure, have to make tough choices. Can they replace tax revenues that formerly came from pricey coastal homes? What’s the best place to invest limited infrastructure money as some neighborhoods become untenable, and would building expensive sea walls in effect bail out rich property owners? What’s the best way to assist marginalized and displaced people, either from flooding or the flood of new inland investment? In a perfect world, Keenan says, cities would take advantage of the crisis to upzone and densify on higher ground to create “defensible urban corridors,” with blocks of new affordable housing connected with better transit. For instance, Miami has created a $400 million Forever Bond program to invest in infrastructure and housing for a climate-impacted future, with $100 million set aside for affordable housing, part of the 12,000 total affordable units the city plans to build by 2024.

A map of the Magic City development in Little Haiti.
A plan for Magic City Innovation District is shown in the Little Haiti neighborhood of Miami. The billion dollar mixed-use development will take up to 17 acres of land, is set to be built in this historic neighborhood and has inspired hope and fear among the residents.
AP Photo/Lynne Sladky

But making that shift quickly enough is a challenge, especially for Miami. Florida doesn’t allow local personal income taxes, so property taxes make up the bulk of local budgets, leading to an overreliance on real estate revenue to fund the city’s budget. That has resulted in a developer-friendly economy and political climate that will be hard to change.

“The rule of thumb is, let developers do all they want, to be honest with you, so it’s hard to have a forward-thinking conversation about this,” says Ashad-Bishop. “Developers are thinking of profit, and profit and equity have a very hard time coexisting.”

Is climate gentrification changing Little Haiti?

Projects like Magic City send signals to the larger development community that there’s opportunity in the neighborhood, and eventually force current homeowners and commercial tenants to compete against developers who believe they can bring in a wealthier set of tenants.

“I think there’s a lot of quiet buying taking place right now in areas around Magic City,” Jagannath says. “From 2017 to 2019, there was a considerable jump in commercial prices around Magic City, and homes in the area are being advertised as being great investment properties.”

Jagannath’s own firm found that numerous real estate listings last summer that referenced Magic City and used the phrase “this opportunity won’t last,” “huge investment opportunity,” and “the best opportunity in the area.”

Her group has represented retail tenants who don’t have enough business to keep up with increasing rents for their stores. She believes it’s the first wave of displacement as the neighborhood becomes more popular and landlords feel they can charge higher rents. (Down Second Avenue, a newly opened food hall, the Citadel, represents another big development that seems aimed at the Wynwood crowd.)

A study of land-use patterns by the University of Miami Office of Civic and Community Engagement bolsters the case that investors are sensing opportunities in immigrant neighborhoods. According to senior program manager Jorge Damian de la Paz, one in every five homes or duplexes in Little Haiti is owned by investors via limited-liability corporations or other business ventures—business entities that can make tracing ownership complicated—with names like World Dominations Enterprise LLC, Strictly Profits LLC, Premium Elevation LLC, and Vulture Property Investments.

Similar patterns are seen in Little Havana and Liberty City. Allapattah, named for the Seminole word for alligator, has been dubbed “the next Wynwood.” Long home to Latin American immigrants and industrial warehouses⁠—the average income is $22,600, 77 percent of households are renters, and roughly a quarter of residents are undocumented immigrants, according to the Biscayne Times⁠—Allapattah has rapidly become a target for developers. Last March, the city commission gave the go-ahead to transform an old produce market into a 1.4-million-square-foot development featuring thousands of coliving and apartment units designed by Dutch architect Bjarke Ingels, and the Urban X Group is in the midst of completing a $425 million River Landing apartment complex. Developer Lyle Stern envisions the area ”transforming from industrial to trendy,” like Chicago’s Fulton Market or New York’s Meatpacking District. A Colliers International South Florida study found that land prices rose from $58 per square foot in 2014 to around $275 per square foot in 2018.

But even some climate activists aren’t ready to say it’s all just climate gentrification at play.

“The fundamental question is, what is the main driver of that gentrification?” says Yoca Arditi-Rocha, executive director of the CLEO Institute, a Florida nonprofit focused on climate change education. “Some say climate and sea level rise, some say it’s purely gentrification.”

“It just so happens that communities of color sit at a slightly higher elevation than the coast,” says Robin Bachin, who runs the University of Miami Office of Civic and Community Engagement. “But to say right now that we see evidence of climate gentrification that’s absolutely clear and you can distinguish that from any other form of gentrification, that’s not clear.”

Bachin and her team do see this as the right time to start building policy solutions to address gentrification of all types. For instance, while mapping out land-use patterns, they discovered areas where unused city, county, and school board property sit adjacent to each other. An overlay with transit maps shows areas where different governments could, by combining or swapping land, create real estate holdings ideal for dense affordable housing near transportation. In effect, it provides a roadmap for transforming areas like Little Haiti and Allapattah in ways that would promote equity and opportunity.

“We need to focus on everything you can do to protect equity in a neighborhood like Little Haiti so it doesn’t become a Disneyfied version of Little Haiti,” says Bachin. “There are real people who live there.”

How investors view climate gentrification

If climate gentrification is taking place, it would follow that local developers and builders would be consulting flood maps and long-term forecasts before making deals. That doesn’t seem to be the case. Jorge Perez, a billionaire South Florida developer known as “the condo king” who built an art gallery in Allapattah recently, told journalist Jeff Goodell that he doesn’t think about sea-level rise on a daily basis. “In 20 or 30 years, someone is going to find a solution for this,” he says. “If it is a problem for Miami, it will also be a problem for New York and Boston—so where are people going to go? Besides, by that time, I’ll be dead, so what does it matter?”

The industry hasn’t changed how it operates in response to climate change, according to Jennifer Wollmann, the president of the Miami Association of Realtors. Her organization and others, including the Army Corps of Engineers, have pushed for investments in resiliency and protecting land and investments (it’s the focus of a recent issue of the organization’s magazine). But she points to robust sales figures in December—the sale of $1 million-plus condos was up 48 percent, month over month—as a sign of healthy interest in waterfront property. There are lots of investors seeking opportunities in South Florida, she says, which is why there’s been so much interest in building new apartments lately.

“I haven’t seen any issues with 30-year mortgages in at-risk areas for flooding,” she says. “We’ve been hearing about the market changing in reaction to climate change for years, but we just haven’t seen it yet.”

Sebastian Jaramillo, a partner with the Miami-based boutique firm Wolfe Pincavage, which focuses on real estate, has been surprised by the industry’s lack of foresight around climate change. Not only doesn’t he think investors are picking Little Haiti because of its elevation, he worries that they aren’t factoring the issue in at all.

“Lenders haven’t been acting at all when it comes to giving 30-year mortgages for properties that potentially could be heavily affected by rising sea water in the next decade or two,” he says.

For developers, a project timeline from conception to selling a building usually takes two to five years, meaning there isn’t as much incentive to look far into a future altered by climate change. If the lending and financing part of the industry doesn’t step back and caution buyers, it’s business as usual, Jaramillo says. Only once a large storm hits will buyers get a preview of what the future may hold.

Katie Walsh works for the risk analysis firm CDP, a nonprofit that examines climate risk for hundreds of local governments and corporations across the globe. She says she’s starting to see more awareness of this issue among municipal bond investors, who are making bets on 50- to 100-year time frames and are less eager to invest in cities with substantial climate risk. One of her main concerns is that cities already facing budget crises aren’t moving fast enough to address climate change risk.

“There have been so many cuts to their budgets,” she says, suggesting cities won’t have the resources to invest in new infrastructure, resilient buildings, or any large-scale adaptation plans. “They’re already in such a constrained situation to just provide basic services. Adding climate vulnerability further exposes them.”

How climate justice and housing justice go together

Regardless of how much gentrification is due to flooding fears, our climate future is increasingly shaping thoughts about urban policy.

Ashad-Bishop wants the city to create a better framework for research—which currently isn’t a strong suit for Miami’s local government, she says—so that committees like hers can create more integrated, holistic policy recommendations. Bachin’s colleagues at the University Housing Resiliency project are working on creating new designs for the city’s most common affordable housing designs that factor in resilient features, such as better cooling and elevated living quarters, so new buildings can withstand a changing environment.

One of numerous murals around the Little Haiti neighborhood.
“We need to focus on everything you can do to protect equity in a neighborhood like Little Haiti so it doesn’t become a Disneyfied version of Little Haiti.”
Patrick Sison

Keenan points to the Green New Deal for its recognition that climate gentrification, inclusionary zoning, affordable housing, transportation, and resilience—the idea that buildings and landscapes can be redesigned and fortified to better cope with rising waters and changing weather patterns—are all linked.

“Everything going forward is about trade-offs,” says Keenan. “By promoting this idea of resilience, that we can engineer our way out of this, are we delaying the inevitable need to move, are we delaying in a way that traps people? Resilience isn’t a perfect good.”

Jagannath thinks that inclusionary zoning can be a useful tool to create more resilient communities. In the future, Miami will need denser housing in high-elevation areas—flipping the current landscape, with its small homes inland and high-rises on the beach—and those larger projects need to be open to different income levels and built sustainably.

Magic City has a community benefits agreement which will see the development pay $40 million, including $31 million in community benefits that will be overseen by a trust composed of local residents and $9 million in impact fees. Jagannath, who did some early analysis for the agreement with community groups, but was ultimately left out of the final negotiations, believes it lacks the foresight and fairness to set an example for future agreements (an initial plan to require 550 units of affordable housing was scrapped during the final negotiations). Last summer, the Community Justice Project sued the city to block the development on behalf of a local renter and activist, Warren Perry.

“Very little in that agreement looks at the climate vulnerability of Miami,” says Jagannath. “If it did, it would have been more specific about including more workforce and affordable housing directly on site.”

Bachin says the issue is bound to shift how politicians think about environmental issues, and that there’s broad consensus that affordability and environmental risk are significant regional problems (though Miami’s Republican Mayor Francis Suarez told CNN last summer that “we haven’t seen any direct evidence of [climate gentrification] yet”).

“Political leaders are making affordable housing and climate resilience a centerpiece of their platforms this year, which they never have before,” she says.

Ideally, centering climate policy on climate gentrification, and the issues it raises, would not only create a city that can better react to environmental change, but one that can call itself more equitable.

“What I care about is not only that you’re taking people away from their neighborhood and their neighbors and where their kids go to school, it’s that when you do that, you put them in harm’s way,” says Ashad-Bishop. “This is climate change. We don’t have the time to try and fix it, do it in a flawed way, and troubleshoot and do it again.”