Vagabond Group is nearly finished renovating more than 20 of its affordable housing units in Little Haiti, a project that benefits from a half million-dollar low interest loan from Miami-Dade County.

Even with the favorable financing and some government funding, Vagabond founder Avra Jain said her company is still losing money on the investment.

“In the end, without full subsidies, the math just doesn’t work,” Jain said.

She lost about $50,000 per unit on a four-unit complex Vagabond restored at 6820 Northwest Second Avenue. Because rents are capped, the concessions from city and state affordable housing programs are no longer enough to defer the cost of repairs and allow Jain to turn a modest profit.

“Policy makers need to know… when you give me $10,000, all you’re getting is lipstick,” she said. “It’s a Band-Aid. So are we going to bandage or are we going to fix [the program]? And how do we find the funding to do that?”

That is the question facing property owners and tenants if the wave of affordable housing units in Miami-Dade County that expire in the next two years are not renewed.

When those affordable restrictions end so too will the protections that have kept rents low for thousands of tenants. Building owners like Jain say the pot of money reserved for affordable properties has depleted over the years and the incentives offered to landlords are less attractive. Upkeep and repair costs have risen digging further into the bottom line.

Miami’s tenant advocates counter that property owners have been unwilling to compromise and too eager to abandon a program that has made them money and helped a vulnerable population. Adding to the problem: A law that increased the number of years a building must remain affordable has led to apartments getting built with fewer units.

Now, droves of owners may decide to let the affordable restrictions expire, then fully renovate and substantially raise the rents or sell their buildings and cash out.

That possibility could have a lasting impact on the city itself, forcing out thousands of existing tenants. In many cases, that has already happened.

How low can it go?

More than 5,000 affordable housing units in Miami-Dade County have lost their affordability status since 2001, according to the Shimberg Center at the University of Florida.

That rate is expected to dramatically accelerate over the next two years, as an additional 2,200 affordable units stand to lose that subsidy. A majority of those are in Miami Beach, Little Havana and South Dade, according to a University of Miami study.

Without critical funding to increase government incentives and tax credits that maintain and build new affordable housing, the market will keep shedding those protected properties.

“You might see a real loss of affordable deals in the future,” said Matthew Rieger, president and CEO of Housing Trust Group, an affordable housing developer. “We’re not building [affordable housing projects] nearly as fast as we are losing them.”

The federal government used to require a 30-year affordability period for a property, which gave owners more flexibility, Rieger said. Many of those properties are now about to come off the rolls.

In the 1990s, a change in the law led Florida Housing Finance Corporation to increase the affordability requirement to at least 50 years for most developments funded by the various tax credit programs. But newer affordable housing developments tend to have fewer units than the older ones, Rieger said.

“So, yes, I’ve replaced 100 units [of affordable housing],” he said. “But we just lost a 300-unit development.”

That chips away at the 8,400 units of public housing Miami-Dade County now oversees. The county also provides Section 8 subsidized rental payments for more than 15,000 households.

Adding to the problem, experts say, are units lost in foreclosure, which also run the risk of losing their affordability.

And as neighborhoods improve and real estate values rise, property owners who don’t renew affordability restrictions can take advantage of those markets. It may be more lucrative to opt-out than to preserve affordability, said Jorge De La Paz, director of the University of Miami study.

Affordable housing advocates say the problem is a result of years of state and county lawmakers having diverted money meant for affordable housing to other priorities.

As of December, Miami-Dade county’s affordable housing fund has collected just $5.7 million since its creation about a decade ago, according to the Miami Herald. In that time, at least $1.3 billion has also been diverted from the state’s William E. Sadowski Affordable Housing fund. Among its mandates was to subsidize the creation of cheaper apartments and houses for the disabled and elderly. The Sadowski fund collects money from a tax on real estate transactions.

But there has been a recent push by Miami-Dade commissioners to replenish its fund. That includes earmarking 25 percent of the proceeds from certain Miami-Dade land sales and more than $1 million from a pending settlement of unpaid fines from Uber drivers.

Commissioners also revived a county law offering developers the ability to expand projects in exchange for contributions to the housing fund, which has already drawn large sums from developers like Lennar Homes and Pasadena Homes.

Too little too late?

Pasadena, for instance, was able to build about 200 more market rate units at its Mila apartment complex near North Miami Beach after contributing $2.1 million to the affordable fund, according to the Miami Herald. And in order to keep units like those affordable, a statewide bill was recently amended to give affordable housing owners a 50 percent discount on their affordable housing property taxes after their 15th year of ownership.

Smaller efforts are also trying to address the issue.

Late last year, Miami enacted the Miami Forever bond, which allows developers who include affordable and workforce housing in their projects to build taller apartments with more units and reduce the number of required parking spaces.

But all that might be too little too late for developers and tenants.

Vagabond founder Avra Jain agrees that preservation efforts are needed to refurbish and maintain Miami-Dade’s dwindling affordable housing stock. But doing so, she said, is too costly.

Renovations can range from $120 to $150 per square foot, depending on specific site conditions. Without the ability to raise the rent, and without enough government funding, few good options remain, she said.

Michael Liu, director of Miami-Dade’s Public Housing Agency & Community Development, said he is aware of the difficulties, but believes property owners must be willing to compromise.

Liu is in talks with large real estate brokerages that can link the city with clients willing to buy the properties and keep maintain their affordable status. One of those brokerages is Marcus & Millichap, whose Affordable Housing Advisors unit represents sellers and buyers of government-subsidized multifamily properties.

“This has to be a collaborative effort with the private sector because not all of our programs and all of our money can be used for preservation,” Liu said, referring to his agency. “A lot of those properties are privately owned, so we can’t force a property owner that wants to opt out to stay in the program.”