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

In Bal Harbour, Fla., an oceanside village north of Miami Beach, a luxury mall says it wants to help tackle one of the nation’s — and Florida’s — most intractable problems: a lack of affordable housing.

It is an unexpected move for a retail temple where Gucci, Chanel and Rolex are on offer. Affordable? Here?

But in a rare instance of bipartisan agreement, the Florida Legislature passed a law last spring intended to encourage projects like the one that the owner of the mall, Bal Harbour Shops, has in mind. Called the Live Local Act, the law allows developers to bypass certain local zoning rules and to qualify for tax breaks if their projects include enough “work force housing.”

Local officials around the state, stripped of their power to say no, don’t like it. And nowhere has seen more backlash to date than little Bal Harbour.

For 40 years, the mall’s owner, Whitman Family Development, has wanted to build a hotel alongside the shopping center, on Collins Avenue, the village’s main drag. Neighbors and elected leaders repeatedly rejected the idea. But when the new housing law passed, the owner saw a way in.

The company filed an application last month to build a 20-story hotel and three residential towers with 600 units, 240 of which would be priced low enough to qualify as work force housing under the law. If the plan meets the law’s requirements, the village of about 3,100 people — where the median household income is about $86,000 a year, well above the state average — will be unable to stop it.

After the application was filed, infuriated residents packed Village Hall to decry the project. The Village Council, feeling ambushed, vowed to try to stop it. Then, last week, the mall’s owner sued the village, in what seems to be the first instance of a developer asking the courts to enforce the new law.

It is a small-town fight over a big-time issue, with both sides making reasonable points and no compromise in sight.

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

The law resembles others ​that states have passed in recent years curbing local governments’ ability to block new projects as rent burdens escalate; the hope is to speed construction and backfill what has become a national housing shortage. But around the country, local officials are pushing back.

The Bal Harbour case is the highest-profile dispute yet over the Live Local Act, but it has upset municipalities all over Florida since Gov. Ron DeSantis, a Republican, signed it last March.

Miami Beach balked when the owners of the famed Clevelander Hotel on Ocean Drive floated plans for a restaurant and 30-story residential building. (The owners have since reduced it to 18 stories.) Commissioners in Pasco County, north of Tampa, voted to sue any developer trying to use the law to build apartments on industrial or commercial property. At least two municipalities in Miami-Dade County, Doral and Florida City, temporarily suspended all development after the law’s passage.

Municipal leaders say they are exasperated with the Republican-controlled state government for overriding local authority. State legislators consider the law, which has prompted a slew of shelved developments to be dusted off and redrawn, a resounding success. Developers say that without the law, they would have no incentive to build anything resembling work force housing.

“I’m the first to admit that including multifamily residential has not been in the plan since its inception,” said Matthew Whitman Lazenby, the chief executive of Whitman Family Development, the mall owner. His grandfather, who opened the mall in 1965, had envisioned it as a central village destination with a mix of commercial uses.

“If we can do that while also doing our part to solve a real social crisis,” Mr. Lazenby said, “it seems like that’s an opportunity that we shouldn’t refuse.”

The units designated as affordable would be rentals; a mall spokesman said it was too soon to know the going rate. Mr. Lazenby has pointed to hospitality and service workers, teachers, nurses and police officers as examples of people who work in Bal Harbour but cannot afford to live there.

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

Renters in the Miami metropolitan area are the most cost-burdened in the country, according to 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 plenty of new rental units, but most are for the luxury market and not for the region’s service economy workers, who are employed by the hospitality, health care and retail sectors, said Ned Murray, the associate director of the Jorge M. Pérez Metropolitan Center at Florida International University. Public-sector employees, like teachers and police officers, also often are squeezed out.

Anthony De Yurre, a South Florida real estate lawyer who is on the board of governors of the Florida Chamber of Commerce and was involved in shaping the $700 million law, said that what affluent homeowners actually objected to was having less affluent people move into their neighborhoods.

“If you go to these meetings, the first response you get is, ‘We don’t want those people,’” Mr. De Yurre said. “These are the same people that are teachers in our communities, service and hospitality folks.”

The law is hardly a cure-all. Under its terms, at least 40 percent of the housing units in a proposed project must be set aside for people making up to 120 percent of the local median household income. In Miami-Dade County, 120 percent of the median is currently around $90,000 a year. But Dr. Murray said that most of the county’s service sector workers earned less than $20 an hour.

“When you do that math, we’re looking at renters that earn between $40,000 and $50,000 a year,” he said, adding that the law is “not addressing that real need.”

Residents and local officials see a different problem: that the law makes it impossible for cities and towns to block out-of-scale projects that would worsen traffic and overwhelm public services. The backlash has been such that state lawmakers are considering amendments to the law intended to address some of the concerns.

“We are very sensitive to climate change and sea rise and the impact on infrastructure, which we deal with every day here,” Mayor Jeffrey P. Freimark of Bal Harbour said. “As a barrier island, adding this type of load to it is, I would argue, unconscionable.”

In 2021, nearly 90 percent of Bal Harbour residents rejected a referendum put forth by the mall to build higher than its current 56-foot limit, which was set by another referendum in 2006. The newly proposed towers would rise 275 feet — roughly five times higher. The mall owner notes that the St. Regis Bal Harbour Resort, across the street, is about the same height.

On a recent weekday afternoon, the Bal Harbour Shops were bustling with local and international visitors enjoying a late lunch or strolling the open-air corridors lined with lush tropical foliage.

The high winter season used to slow down after Jan. 15, Mr. Lazenby said, but since 2021 has extended through Valentine’s Day. A previously approved mall expansion — also a sore subject for many residents — was underway, and the surrounding streets were choked with traffic.

“I don’t think anybody’s opposed to having work force housing in theory,” Ms. Logan said, “but not how he’s trying to do it.”

Conor Dougherty and Verónica Zaragovia contributed reporting, and Alain Delaquérière contributed research.