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Leveraging Government-Owned Land for Affordable Housing

Eric Singer

Image of construction site.The current housing crisis in Florida is well recognized. One promising solution is the use of surplus or under-utilized government-owned land for the development of new affordable housing. By leveraging their land holdings through ground leases with developers, governments can facilitate the expedited development of new affordable housing, generate new public revenues (through rent and other payments) to support additional housing projects, and further other public-policy objectives.

Government is often expected to solve problems through its powers as a regulator, but there are limits to how even the most well-crafted and well-intended regulations can shape the market. Fundamentally, the housing affordability crisis must be solved through the availability of more housing at a lower price point, and that outcome cannot be readily achieved through new laws and regulations. There is no doubt that, at the margin, improved regulations can help, and local governments have made efforts in recent years to expedite the permitting process, reduce certain fees, etc., in order to reduce housing costs and delivery times.  However, there is no regulation (at least a constitutional one) that can require a property owner to build new housing at a certain time and sell or rent it at a certain price.

But government is not merely a regulator. In many areas of Florida, local governments are the largest landowners, and are therefore in a position to address affordable housing as a market participant versus a market regulator. When government is wearing its landowner hat, it is in a position to decide how its land will be utilized, and governments may therefore enter into development agreements with private developers requiring the development of an agreed project (including agreed affordability requirements) pursuant to an agreed schedule. Although a developer can only agree to perform what is possible, the government can, for example, provide its land at a reduced price to facilitate the development of housing at a reduced price.

Government land is, in many cases, also inherently well positioned for the development of more affordable housing – for example, housing developed on land near mass transit stations can reduce the need for on-site parking for residents. Miami-Dade County has in recent years partnered with private developers for the successful delivery of several major housing projects adjacent to mass-transit stations. Those projects have, in many cases, also included the enhancement of transit infrastructure, highlighting the government’s ability to further many different public-policy objectives when acting as a market participant.

As a result of recent legislative changes, including HB 781 and the Live Local Act, Florida law now more than ever permits streamlined, expeditious procurement approaches for the selection of a developer by school districts, counties, cities, and other governmental entities. Even non-competitive procurements for affordable housing projects are often allowed in certain circumstances. This legal framework provides flexibility in the process of engaging developers for the expedited delivery of affordable housing, further supporting the efficient use of government-owned land for this purpose.

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