Rising home prices and sustained population growth has resulted in an affordability crunch affecting many of Florida’s top housing markets. In fact, six of the nation’s hottest rental markets are in the Sunshine State.
A steady influx of people and companies, coupled with the reality that development opportunities are limited on a peninsula, lead to renewed calls for statewide policies aimed at facilitating more affordable and workforce housing.
Recognizing this need, the Florida Legislature enacted a new law aimed at encouraging the development of more housing units through a combination of zoning, tax, and development financing provisions. The “Live Local Act” took effect on July 1st, and developers, investors, and municipalities are now evaluating potential impacts of the legislation.
“The Live Local Act is the most significant land use policy change to take effect in Florida since the introduction of Comprehensive,” says Bilzin Sumberg Partner Anthony De Yurre, who represents real estate developers and investors in complex land use and zoning matters. “Every Florida community – from the Panhandle to Key West – is contending with affordability challenges, and this bipartisan bill will ease the situation by accelerating the development of market rate, workforce, and affordable housing.”
Implications stemming from the Live Local Act will permeate all facets of real estate development and investment in Florida. Bilzin Sumberg’s land use, government relations, and real estate practices are already counseling clients who are seizing upon the new legislation when planning and evaluating new projects.
Motivating Multifamily Development
According to the new law, local governments must now allow the development of multifamily rentals on sites zoned for mixed use, commercial or industrial use if at least 40 percent of the proposed residential units within the project will be affordable to those earning up to 120 percent of the local area median income (AMI) for a period of at least 30 years.
Additionally, local governments are now required to administratively approve multifamily and mixed-use residential projects in any area zoned commercial, industrial, or mixed-use, allowing developers to build to the maximum allowable density within the municipality, and to the greatest allowable height within one mile of the project site.
“Land use provisions in the Live Local Act are opening the door to a wave of housing development across Florida. For starters, multifamily projects are now eligible for administrative review. This will streamline the approval process and put developments on a faster track to completion. Second, more height and density allowances will offer developers greater incentives to commence projects in today’s tight capital market,” says Bilzin Sumberg Partner Javier Aviñó, Practice Group Leader for the firm’s Land Development and Government Relations practice.
Welcome Relief for the Housing Market
Under the new law, the Florida Legislature also allocated $700 million for the financing of subsidized affordable housing developments, and expanded the types of housing projects that qualify for tax exemptions, such as relief from sales tax for materials used in the construction of residential units that have a recorded agreement with the Florida Housing Finance Corporation and Property Tax relief.
“Publicly subsidized affordable housing is a critical piece of the equation, but just as important is workforce housing serving the ‘missing middle,’ a segment of the market comprising teachers, firefighters, nurses, police officers, and other residents who are essential to our state’s economy and quality of life,” explains Sara Barli Herald, a Bilzin Sumberg Partner who concentrates on public-private partnerships, real estate finance, and affordable housing development.
Public Land May Be Ripe for Development
Another provision of The Live Local Act will happen by the end of October 2023, at which point Florida’s 67 counties must release an updated list of publicly owned land that may be conducive to privately led affordable or mixed-income housing development.
“By requiring local governments to identify sites which may be appropriate for future development, the Live Local Act is inviting potential public-private partnerships that could take the form of Requests for Proposals or unsolicited development proposals,” said Carter McDowell, a Partner in Bilzin Sumberg’s Land Use and Government Relations Practice. “Mixed-use projects that deliver community benefits, with the backing of local government and financial support from a private developer, are typically well-received by the public and have a history of success in Florida.”
Bilzin Sumberg is closely following the latest developments stemming from Florida’s Live Local Act, with several qualifying projects already in motion. The Firm is on the front lines in identifying development opportunities, securing entitlements, counseling developers and investors in transactions, and navigating construction related matters. Stay informed with the latest updates and details pertaining to the new law by subscribing to the Firm’s blog.
*This was republished with permission from The Real Deal. Click to access the publication.