Miami Beach has been trying to limit hospitality development and push builders to prioritize workforce housing, but it is also at odds with developers who want to build skyscrapers that would include desperately needed apartments affordable for hotel workers.

“If you want to destroy Miami Beach, you want to destroy our tourism-based economy, you want to stop Miami Beach being a destination to the wealthiest people in the world, line up Alton Road with 400-foot towers,” Miami Beach Commissioner Alex Fernandez said last week at Bisnow’s The Future of the Beaches Forum.

Florida's Live Local Act was designed to allow developers to circumvent local zoning restrictions — like those in Miami Beach that preserve its art deco history — if they dedicate at least 40% of a project's units to workforce or affordable housing, which is between 80% and 120% of the area median income.

The law is viewed as an existential threat to cities like Miami Beach that pride themselves on preserving their historic character by heavily restricting what gets built.

“That's not going to work,” Fernandez said. “That will destroy us, and that will destroy the quality of life of the people that work here.”

But the city is also facing a dire housing shortage, particularly of housing that is affordable to the staff of hotels. Developers at the event, held at The Shelborne by Proper in Miami Beach, said the Live Local Act was intended to address that issue head-on.

“I think that's probably the most important law for the city of Miami Beach to embrace, because that is what a public-private partnership is all about,” Crescent Heights CEO Russell Galbut said. “And it's creation of workforce housing, which is something desperately needed.”

Flag Luxury Group co-founder, President and Chief Operating Officer Dayssi Olarte de Kanavos said her company found that the area around the Lincoln Road shopping district had lost about 20% of its population since the 1990s.

“I remember when we opened The Ritz-Carlton, South Beach in 2003, we had so many employees that just walked to work,” de Kanavos said. “They did not have to take an hour and a half out of their day to commute to work like so many of them have to do today, and that is just unfair for them.”

In a report conducted by the city in 2023, Miami Beach found that it had lost nearly 11,000 residents between the ages of 20 and 45 over the previous two decades. Miami Beach had gained about 3,500 senior residents between 55 and 80 years old, leaving the tourism-driven economy exposed to a weaker local workforce.

In response, Miami Beach passed an ordinance in February that requires approval by a supermajority of the city commission before any new hotel project can move forward.

It applies to new hotel developments and the conversion of existing residential buildings into apartment hotels, commissioners said when they passed the ordinance.

But hundreds of vacation units are still set to come online in the coming years — like Terra Group and Turnberry's Grand Hyatt Miami Beach, set to bring 800 hotel rooms by 2027, or the 103-unit short-term-rental-friendly condominium Ella Miami Beach for 2026. City officials are worried the local workforce won't be able to sustain it.

“These properties don't manage themselves, so you want to make sure that your workforce is good, is strong — they stay there, they're not losing that workforce,” Fernandez said. “That's why I'm a big believer that we need to build housing in our city, but to the proper scale, to the proper height.”

While Miami Beach is pushing back on some housing projects, a bigger strain on its supply is short-term rental units, Fernandez said. There are about 5,000 short-term rentals registered in Miami Beach, but a city-commissioned study suggests that there may be about 5,000 more unregistered units, he said.

While a large part of the city restricts short-term rentals, in 2017, city voters approved a zoning change between 69th Street and 72nd Street that allowed developers to build taller buildings and short-term rentals, the South Florida Business Journal reported.

“If we allow those units to go back to being full-time housing units, we will address the issue of affordability and traffic in our city without building a single extra tower,” Fernandez said.