State legislators have approved amendments to Florida’s Live Local Act that aim to expand the categories of land that developers can build affordable housing on, as well as make financing for those projects easier.

As this year’s legislative session ended in Tallahassee last week, lawmakers passed a bill to update Live Local for the third time in as many years. The measure now goes to Gov. Ron DeSantis for his signature.

Originally passed in 2023, Live Local aims to spur the creation of more affordable housing across the Sunshine State by allowing developers to bypass local zoning and density requirements and by offering tax incentives.

As of now, the law grants the highest density a city or county allows for projects built on industrial, commercial or mixed-use land, as long as developers reserve at least 40% of the units for affordable housing for the next 30 years. “Affordable” is defined as units for households making at or below 120% of Area Median Income (AMI).

Dozens of Live Local projects have been proposed in South Florida since 2023, but only a handful have actually broken ground so far.

Here’s what the latest revisions, if signed into law, could mean.

Land use and zoning expansions

One big change is to make government and religious land eligible for Live Local projects.

Under the new rules, developers could propose Live Local projects on land owned by municipalities, counties and school boards, as long as the government entity agrees to co-file.

“That opens up the door for developers to find other significant locations to build on,” said Keith Poliakoff, an attorney with the Government Law Group in Fort Lauderdale.

What’s more, the bill would also allow Live Local projects to rise on land owned by religious organizations, though the rules would be a bit stricter there.

Developers could co-file projects with faith groups, so long as the site is larger than three acres and the house of worship has been there for at least 10 years. The church or temple must also remain operational after the project’s completion.

In recent years, there’s already been an uptick in religious organizations looking to sell their land to developers or partner with them on new projects. These transactions pair faith groups, which often have underused land but need to raise money, with real estate companies, which have cash to spend but face increasing land constraints in South Florida.

That trend could be turbocharged if the latest Live Local updates go through.

More broadly, the co-filing requirements means South Florida residents could expect a surge in the number of public-private partnerships, according to Poliakoff.

In a possible wrinkle, that means even existing public-private partnerships between local governments and developers could be amended to allow for Live Local projects, he said.

Updated tax benefit schedule

Another big update could come on the financing side.

Property tax benefits for Live Local projects would vest when the building permit is issued. As of now, developers obtain those exemptions upon project completion.

Live Local offers a 75% tax abatement on units for residents who make 80%-120% of AMI, plus a 100% tax abatement on units for residents who make less than 80% of AMI.

“What the new law says is the minute that developer pulls a building permit, there is no ad valorem tax owed on the [affordable] units,” Poliakoff said. “That savings can be so significant that it can take a situation where a project that was not developable … actually meets the financial threshold for a developer to be able to build.”

That could address a longstanding concern of construction lenders, who’ve said they’ve had trouble determining a Live Local project’s final expenses.

“This would provide some clarity upfront for the lender,” said J.C. de Ona, division president for Southeast Florida at Centennial Bank. “It’s a pretty big change, and now it’s definitely going to be easier for a bank to underwrite.”

Expect boosted lending activity for Live Local projects if the changes go into force, he added.

As of this year, there’s been 191 Live Local projects proposed across the Sunshine State, according to figures from the Florida Housing Coalition, a Tallahassee-based nonprofit. Together, they would add about 57,000 housing units, both income-restricted and market-rate.

Miami-Dade County alone accounts for nearly 43% of all Live Local projects proposed statewide. Add in Broward and Palm Beach counties, and South Florida has about six in 10 of all the state’s Live Local proposals.

Article Link: Florida aims to expand affordable housing pipeline with latest Live Local revisions
Author: Mark Dovich