18-story Live Local Act project planned in Hollywood Beach. Here are the plans.

Condra Property Group has proposed a condo, apartment, retail and restaurant property in Hollywood through the Live Local Act.

A block and a half of low-rise hotels along the beach in Hollywood could be redeveloped into an 18-story mixed-use project through the state’s new Live Local Act.

The city’s Technical Advisory Committee will consider the proposal from New York-based Condra Property Group, led by Allen Konstam, on Sept. 18. It concerns 3.33 acres at 2007 and 2115 N. Ocean Blvd.; 309, 333 and 341 Oklahoma Street; 320 and 324 McKinley Street; 320, 322, 324 and 326 Nebraska Street; and 2012 N. Surf Road.

Located along the city’s famed boardwalk along the beach, this property currently has 123 hotel rooms, including the Neptune Hollywood Beach Hotel, the Hollywood Beach Seaside, and the Casa Pellegrino Boutique Hotel. The developer has it under contract from various owners.

This stretch of beach has mostly two-story hotels. City officials have resisted allowing more density in the area because they want to preserve the historic character of this part of the beach, while allowing taller buildings in other areas of the beach.

However, a new law could change all of that.

Passed by the Florida Legislature this year, the Live Local Act allows developers to bypass local density rules and public hearings for projects with some affordable/workforce housing. Developers can utilize the highest density in the city and the highest height within one mile as long as at least 40% of the units are “affordable housing” for 30 years. The bill defines affordable housing as 120% of area median income, a category usually associated with workforce housing.

Condra Property Group seeks to use the Live Local Act to apply the same density as the Sian Ocean Residences and the same height as the Margaritaville Beach Resort to this property. It would still require 40% workforce/affordable housing.

The project would total 628,191 square feet with a residential building of 18 stories at the corner of Ocean Boulevard and Oklahoma Street, an eight-story parking garage with some retail on the ground floor to the north across McKinley Street, and a two-story beach club with restaurants and a rooftop pool on Surf Road. It would combine for 137 condos, 91 rental units, 14,488 square feet of retail, 3,312 square feet of event space, 6,853 square feet of restaurants, and 352 parking spaces.

There would be separate pools, fitness centers and social rooms for the condos and the rental units. Located on floors two through four, the apartments would range from 522-square-foot studios to 975 square feet with two bedrooms.

The condos would go from floors five through 18, ranging from 1,133 square feet with one bedroom to 1,850 square feet with three bedrooms.

Local attorney Keith Poliakoff, who represents the developer in the application, couldn’t be reached for comment. Hollywood-based Kaller Architecture designed the project.

Hollywood Mayor Josh Levy said he does not believe the Live Local Act provides applicants with additional height on Hollywood Beach.

“The best use of commercial property is not always conversion to multifamily residential,” Levy said. “I’d rather see boutique hotels that are allowed and provided for in the commercial district of our beach. In the end, it may be a court that answers how the Live Local Act applies in our beach area.”

The parties that Condra Property Group have the properties under contract with are the following: CPG309 LLC, Astrid 7 LLC, JW CPG Hollywood 2 LLC, Pellegrino Nachum LLC, Maria Olivera, Julia 2 LLC, Paradise Julia Terrace LLC, YS Real Estate Investments LLC, Julia 1 LLC, Astrid 2 LLC, Astrid 10 LLC, and Astrid 4 LLC.

Article Link: 18-story Live Local Act project planned in Hollywood Beach. Here are the plans.
Author: Brian Bandell

Developer proposes apartments in Boca Raton through Live Local Act

Apartments are planned in Boca Raton through the Live Local Act.

The apartments would be developed on an office site.

The owner of a Boca Raton office building wants to build apartments in the parking lot through Florida’s new Live Local Act.

MPF Vanderbilt Boca Property II LLC, an affiliate of Macquarie Capital in New York, filed plans for the 11.8-acre Boca Center site at 1800 N. Military Trail. West Palm Beach-based North American Development Group, a residential developer, is listed on the application.

The property currently has an office building with 149,500 square feet of leasable space and a parking garage, both built in 2008. It acquired the property for $76.1 million in 2022.

The Live Local Act allows developers to bypass local density rules and public hearings for projects with some affordable/workforce housing. Developers can utilize the highest density in the city and the highest height within one mile as long as at least 40% of the units are “affordable housing” for 30 years. The bill defines affordable housing as 120% of area median income, a category usually associated with workforce housing.

However, this application asks the city to allow only 10% of the units to be affordable housing, instead of 40%.

Keith Poliakoff of Fort Lauderdale-based Government Law Group, which is not involved in the application, said the Live Local Act gives cities the discretion to approve a development with 10% affordable housing instead of 40%.

Under the proposal for Boca Center, the developer would build 300 apartments totaling 365,165 square feet in six stories and a 553-space parking garage. Amenities would include a pool courtyard, a dog park, and a pickleball court, coworking space and a lounge.

It would have 10 studio apartments, 110 one-bedroom units, 146 two-bedroom units, and 34 three-bedroom units.

Boca Raton attorney Ele Zachariades, who represents the applicant, confirmed his client will ask the city to allow 10% of the units to be affordable housing.

Netherlands-based Arcadis designed the project.

The site is located just west of Interstate 95, near the Town Center mall.

Article Link: Developer proposes apartments in Boca Raton through Live Local Act
Author: Brian Bandell

Land near Orlando Executive Airport eyed for new apartments inspired by Live Local Act

A new filing in Orange County reveals plans for a new apartment community citing the Live Local Act as inspiration.

Florida’s still-new Live Local Act incentivizes developers to build workforce and affordable housing through zoning bypasses and tax benefits.

Newly filed plans reveal a Nashville developer is eyeing a project inspired by Florida’s still-new Live Local Act near Orlando Executive Airport.

Elmington, a commercial real estate investment, development, construction and property management firm, is behind a pre-application request in Orange County to discuss the project to build 200 apartment units at 5640 Santa Rosa Drive. Per Live Local Act guidelines, the developer is proposing that 40% of the units — at least 80 apartments, based on the proposed unit count — qualify as affordable or workforce housing.

The project — tentatively titled ECG Santa Rosa in submitted materials — would include two four-story buildings on the 8.84-acre site, which is near the southwest intersection of East Colonial Drive and North Semoran Boulevard, across Lake Barton from the executive airport.

A unit breakdown on the development summary shows 100 one-bedroom apartments, 60 two-bedroom apartments and 40 three-bedroom apartments.

New developments that cite the Live Local Act as inspiration are significant, as the legislation allows developers to bypass process steps such as rezoning and land-use changes — provided the property is already zoned for commercial, industrial or mixed-use and the developer agrees to make at least 40% of the residential units affordable or workforce housing for 30 years.

That bypass is important, as it will save developers significant time and legal expenses, both of which are valuable in ensuring new projects make financial sense. The act also includes an ad-valorem tax exemption, commonly referred to as the Missing Middle exemption, for the portions of the property that provide affordable or workforce housing.

If early projects brought forward because of the Live Local Act are successful, it could lead to substantial repositioning of and reinvestment in properties in the region with those zoning categories.

Executives for Elmington and Orlando-based Central Florida Real Estate Investments & Developments LLC, which owns the land, were not immediately available for comment. It is unclear whether Elmington has the land under contract for purchase.

Orange County records show Central Florida Real Estate Investments and Developments bought the property for $1.23 million in September 2013.

Meanwhile, state and local experts have told The Business Journals that the Live Local Act will be transformative in how it affects development in Florida.

“The attainable housing law will immediately change the landscape of development in Florida,” previously said Keith Poliakoff, an attorney with Fort Lauderdale-based Government Law Group, which represents many developers. “For the first time I can recall in state history, the state government has overridden home rule and taken away the zoning and land-use powers from local government.”

Other newly planned projects in the region that have cited the legislation include Eastwind Development’s plans for apartments on a vacant 14-acre parcel near UCF.

“I think there is a need for more apartments in this submarket, and there’s an even bigger need for apartment projects with a workforce housing component,” said Stephen Novacki, Eastwind’s vice president of acquisition and development.

Data from CoStar Group shows the Eastside multifamily submarket, which includes the Santa Rosa Drive site, has a $1,774 average monthly apartment rent and a 6.2% average vacancy rate. In comparison, metro Orlando has an $1,800 average monthly apartment rent and an 8.5% average vacancy rate.

Article Link: Land near Orlando Executive Airport eyed for new apartments inspired by Live Local Act
Author: Steven Ryzewski

City to consider company’s plan to build marina with tiki bar in Broward County

Rendering of Skippers Dockside in Hollywood

A new tiki bar and marina is being proposed at the site of the former Wilshire Marina in Hollywood.

Hollywood’s technical review committee is scheduled to review Oceanside Marine, LLC’s plans to redevelop the 1.32-acre property on Sept. 5. The site is located at 2308 N. Ocean Drive along the Intracoastal Waterway.

The project, called Skippers Dockside, will include a marina with enough space for megayachts to dock, a temporary takeout restaurant, and a bar. It is designed as an amenity for the nearby Marriott hotel, located at 2501 N. Ocean Drive, as well as for boaters, said Keith Poliakoff, co-founder of the Fort Lauderdale-based Government Law Group, who represents Oceanside Marine, LLC.

“The ownership of this property thought, ‘Wouldn’t it be wonderful to have an additional amenity for hotel guests?’ and ‘Wouldn’t it be great to construct a brand new place where boaters can pull up with their large vessels, dock there, grab a bit to eat, and relax?'” Poliakoff said.

Oceanside Marine, LLC, managed by Mark and Michael Walsh, paid $3.37 million for the waterfront property in 2012. Its previous owner, Wilshire Marina, LLC, paid $18 million for the property in 2006 with the intention of building a high-end condo site. After demolishing the Wilshire Marina in 2006 and the restaurant that operated on site in 2008, Wilshire Marina LLC was hit with a $22.7 million foreclosure action in January 2010.

At present there are no waterfront restaurants and marinas in Hollywood that can accommodate large vessels, Poliakoff said. The bar will be managed by Marriott, he added. The owners hope to break ground early next year, he added.

Sign up here for the Business Journal’s free morning and afternoon daily newsletters to receive the latest business news impacting South Florida. For more business intelligence, follow us on LinkedIn, Facebook, Twitter and Instagram.

South Florida Hotels

Number of guest rooms

RankPrior RankHotel / Prior (* Not ranked in 2022) / URL
11Fontainebleau Miami Beach
22Seminole Hard Rock Hotel & Casino Hollywood
33The Boca Raton

View This List


Article Link: City to consider company’s plan to build marina with tiki bar in Broward County
Author: Erik Bojnansky

Florida’s Live Local Act inspires new UCF-area development in east Orlando. Here’s what to know.

Florida’s Live Local Act, which was signed into law in March, is expected to increase development of multifamily projects with workforce and affordable units.

A new project proposed near the University of Central Florida appears to be the first Orlando-area development directly inspired by Florida’s new Live Local Act.

An application filed July 7 on behalf of Palm Beach Gardens-based Eastwind Development seeks to discuss developing the 14.1-acre property at 10850 E. Colonial Drive as a multifamily project.

The vacant property currently has commercial zoning.

However, one of the key provisions of the Live Local Act, which Gov. Ron DeSantis signed into law March 29, is that cities and counties must authorize a multifamily or mixed-use project in an area that’s already zoned for commercial, industrial or mixed-use if the developer agrees to make at least 40% of the residential units affordable or workforce housing for 30 years.

The provision is important, as it will allow developers to bypass process steps such as rezoning and land-use changes — something that will save developers significant time and legal expenses, both of which are valuable in making new projects make financial sense.

A memo submitted to the county on behalf of the developer by Akerman LLP attorney Carolyn Haslam says Eastwind’s intent is to do just that and to “develop the property with the maximum density allowable in the county.”

The development team’s specific citation of the legislation is noteworthy, as it could be a precursor to more development on land with the designated zoning.

Stephen Novacki, Eastwind’s vice president of acquisition and development, told Orlando Business Journal that, given the early stage of the project, he did not have details — such as how many apartments the project might have.

The project application does note that Eastwind is the contracted buyer for the property from landowner Diamond Holdings Group LLC and the maximum building height sought by the developer is four stories.

Novacki indicated the project’s details will become clearer after a meeting with county officials to discuss a path forward. He also said his group is bullish on the demand for a multifamily project in the area, which is less than four miles southwest of UCF’s main campus, near the intersection of East Colonial Drive and Rouse Road.

“I think there is a need for more apartments in this submarket and there’s an even bigger need for apartment projects with a workforce housing component,” Novacki said.

Haslam could not be reached for further comment, and executives for Diamond Holdings Group LLC were not immediately available for comment.

Eastwind Development is not new to the market and currently has a five-story, 261-unit The Aston at Uptown apartment community in its development pipeline near the Altamonte Mall.

Meanwhile, state and local experts have told The Business Journals that the Live Local Act will be transformative in how it effects development in Florida.

“The attainable housing law will immediately change the landscape of development in Florida,” previously said Keith Poliakoff, an attorney with Fort Lauderdale-based Government Law Group, which represents many developers. “For the first time I can recall in state history, the state government has overridden home rule and taken away the zoning and land-use powers from local government.”

Keith Poliakoff, Government Law Group


Meanwhile, the East Orlando submarket is the fourth largest in the metro, with 20,455 apartments — and another 1,003 in its development pipeline, according to CoStar Group data.

The submarket has an average rent of $1,715 per unit and a 7.4% average vacancy rate — the former of which lags metro Orlando’s average of $1,800 per unit, while the latter outperforms the region’s 8.5% average vacancy rate.

Article Link: Florida’s Live Local Act inspires new UCF-area development in east Orlando. Here’s what to know.
Author: Steven Ryzewski – Staff Writer, Orlando Business Journal

Condo safety law sparked by Surfside collapse may force owners out

Construction scaffolds by the entrance of the Mirage Condo Surfside. Photo: Pedro Portal/Miami Herald/Tribune News Service via Getty Images

Following the Surfside collapse, condominium owners across Florida feared their building could be next, so state lawmakers passed new building restrictions last year.

  • But some experts worry that the new law could force owners out of their homes if they can’t pay for multimillion renovations.

Why it matters: Florida’s Building Safety Act, which Surfside victims’ families lobbied to pass, was well-intentioned and necessary but may lead to unintended consequences, said Jordan Isrow, a South Florida attorney who works with condo owners.

How it works: The law requires residential buildings at least three stories tall to conduct milestone inspections when they turn 30 years old and every decade following. (For buildings on the coast, the first inspection is at 25 years.)

  • Those inspections can prompt major renovations if the engineer or architect finds structural damage.
  • The law also requires condos to order structural integrity reserve studies estimating the remaining useful life of the building’s common areas and to budget annual reserves for future renovations.
  • All reserve studies must be completed by December 2024.

Of note: Miami-Dade and Broward County buildings were already required to conduct 40-year inspections.

What they’re saying: Isrow told Axios the new law is attracting developers who want to buy up older buildings at a discount because owners facing steep assessments will be forced to sell for less.

  • “No one foresaw that this was going to become used against [owners] to help outside [investors],” he said.
  • On the flip side, he said, the law doesn’t go far enough to ensure condo associations are conducting necessary inspections because it allows local governments to grant extensions.

Greg Main-Baillie, who works for Colliers as an owner’s representative and as a consultant for condo associations, told Axios that owners will begin to feel the pain in the next year or two after the deadlines take effect.

  • The bill “needed to happen,” he said. But “unfortunately, it’s going to force a migration of people.”

Article Link: Condo safety law sparked by Surfside collapse may force owners out
Author: Martin Vassolo

A petty, costly tale of two Broward cities

By Francisco Alvarado, FloridaBulldog.org

After nearly a decade, a petty feud between Pembroke Pines and Southwest Ranches involving a metal gate blocking a street near Griffin Road appears to be over.

During that time, only first responders and some Pembroke Pines residents could pass through Southwest 207th Terrace and 54th Place without impediment. Townsfolk and emergency personnel in Southwest Ranches had to find another north-and-south route to get to Griffin Road.

On May 25, Florida’s Fourth District Court of Appeal upheld a lower court ruling ordering Pembroke Pines officials to permanently open the gate. In 2015, a year after the gate was installed, Southwest Ranches sued Pembroke Pines for illegally blocking a public thoroughfare.


Article Link: A petty, costly tale of two Broward cities


New state law might solve housing crisis, spark building boom

Throughout Florida, developers scramble to meet with zoning attorneys, lobbyists, architects, accountants and contractors – all in preparation for July 1.

That’s the day developers can pursue enhanced building rights for residential projects on land that is zoned commercial, industrial or mixed use.

But there’s a catch. Forty percent of these projects’ units need to be reserved for housing that is at least somewhat affordable for the workforce for the next three decades, in a real estate market known for its high-end and luxury housing.

The change stems from the Live Local Act, signed into law March 29. Supporters say it will provide the additional affordable housing the region desperately needs. Others say it overrides zoning rules of municipalities and counties, could lead to projects that overtax roads and sewage systems, and invite a slew of litigation.

“Obviously there is a major affordability issue throughout the state, but this is a pretty radical approach: the state stepping in and doing this, which is not typical at all,” said Carter McDowell, a partner at Miami-based Bilzin Sumberg.

Carter McDowell, partner of Miami-based Bilzin Sumberg

The Live Local Act has garnered plenty of attention.

“I am fielding eight to 10 phone calls per week from developers wanting to know more, and asking for an analysis on how the law can potentially help them develop their properties,” said Javier Vazquez, a partner specializing in zoning and land use at Berger Singerman LLP in Miami.

Berger Singerman attorney Javier L. Vazquez.

And for good reason. The law, previously known as Senate Bill 102, is the most comprehensive housing legislation in Florida’s history, said Albert Milo Jr., president of Related Urban Development Group, the affordable and workforce housing division of Miami-based Related Group.

“This is a product of trying to address the [housing] shortage in the marketplace … in all the counties in the state of Florida,” he said.

Albert Milo, president of the Related Group Urban Development division.

Addressing that shortage could help alleviate the massive rent hikes that threaten the low- and middle-income employees who support South Florida’s economy, experts say.

Ken H. Johnson, a real estate expert and finance professor at Florida Atlantic University, said rents climbed 20% to 30% year over year in South Florida because there was limited rental inventory to meet the demand from existing residents and well-paid professional transplants from other parts of the U.S. With more housing units, rent increases will moderate – or even dip, he added.

“This goes further toward helping our rental crisis than most people [realize],” Johnson said. “We still have some of the most overpriced rents in the U.S. and the only way to get around it is to build more units.”

Ken H. Johnson, professor of real estate economics at FAU

The Legislation

SB 102 includes several incentives to encourage the creation of more affordable housing: $771 million for affordable housing programs; property and sales tax breaks; and a mandate for cities to reduce parking requirements for projects built within a half-mile of a major transit stop.

“We really tried to cast a wide net and offer as many incentives as possible,” said state Sen. Alexis Calatayud, R-Kendall, who co-sponsored the law with Senate President Kathleen Passidomo.

State Senator Alexis Calatayud

A large part of the incentives grants density and height increases for developers who reserve 40% of their units for affordable housing for the next 30 years. They will have the right to build the maximum number of residential units allowed in that city or, if unincorporated, county. And they will be entitled to build as tall as a local jurisdiction allows within a mile of the project.

Developers of mixed-use projects can use Live Local’s building rights, as well, if they include affordable units – but only if 65% of the development is residential.

Another feature of the law: developers can eschew public hearings before an elected or appointed body and just have their plans approved administratively.

Milo said bypassing the public hearing requirements will save developers time and money.

“It is intended to really promote and ignite the power of the private sector to use private capital to produce more affordable housing,” said Milo, who advised on the law’s creation.

The affordable apartments won’t have to be cheap, either.

The legislation defines an affordable apartment as a unit set aside for households that earn up to 120% of an area’s median income. That means an apartment can be affordable for an individual who makes about $86,760 a year in Miami-Dade, $80,640 a year in Broward, and $81,840 a year in Palm Beach County, according to U.S. Department of Housing and Urban Development guidelines. As such, the maximum rents allowed by HUD for those apartments can range from $2,016 a month for a studio in Broward to $3,964 a month for a five-bedroom unit in Miami-Dade.

Milo said the legislation addresses households that make too much to qualify for subsidized housing units, but who still have trouble paying South Florida’s higher rents – also known as the “missing middle.”

“Municipal officials have been asking what can be done for the workforce, from teachers to nurses to first responders to the majority of the professions that fall into that middle workforce category,” he said.

Besides zoning perks, the law also provides property tax abatements as high as 100% for projects where substantial portions of the units are set aside for low- and medium-income housing.

The incentives in the law won’t last forever, though. The zoning bonuses expire Oct. 1, 2033, and property tax abatements end Dec. 31, 2059.


The Live Local Act has generated “pent-up excitement” within the development community, Milo said. It’s easy to see why, as the law will enable developers to leverage tax abatements for additional financing and allow them to build taller projects with more units – without being bogged down in public hearings.

Related Urban is already prepared to submit four or five Live Local Act projects in areas such as Tampa, Collier County and central Miami-Dade County.

Within South Florida, developers may target places including failed shopping centers, public transportation stops in suburbia, and sites near the downtown areas of Miami, Fort Lauderdale and West Palm Beach, land use attorneys told the Business Journal.

Industrial-zoned areas, especially those located within cities with generous unit-per-acre zoning such as Hialeah and Miami, are also likely to attract developers, said Alfredo Riascos, founder and principal of Miami-based brokerage Gridline Properties.

“A neighborhood like [Miami’s] Allapattah that is industrial zoned, but close to job growth areas such as Brickell, downtown and the Hospital District, is ripe for developers,” he said.

Uncertain impact

Still, Keith Poliakoff, managing partner of Fort Lauderdale-based Government Law Group, said the new law will likely generate a great deal of litigation.

“On the downside, there are still nuances to this bill that are confusing and open to interpretation and subject to legal challenges from municipalities, which concerns me going forward,” he said.

Keith Poliakoff, Government Law Group

Poliakoff added that he’s heard from clients already preparing maximum height and density projects that they’ve yet to receive feedback from city staffers on how to move forward.

Another problem with the law is that it doesn’t say how cities should deal with concurrency issues such as water and traffic.

“There is nothing in the law to require verifying that [a city] has enough water and sewer capacity for intensive development,” Poliakoff said.

Edward “Ned” Murray, associate director of the Jorge M. Pérez Metropolitan Center at Florida International University, said the state Legislature should have offered some financial assistance for cities to accommodate large projects with affordable and workforce housing, instead of just running roughshod over their zoning codes.

“If this is going to be done right, it needs to be done with local government being equal partners,” he said. “The incentives should not be given to developers. There should be incentives to local governments. Ultimately, they are the ones who control ordinances and permitting.”

Kenia Fallat, a spokeswoman for the city of Miami, said it already has systems in place to expedite affordable housing development projects, and is ready to hire more staff if needed.

They may very well need it.

An analysis from the city’s planning department showed that, under Live Local, developers would have the right to build up to 1,000 units per acre in nearly half of Miami if 40% of their projects’ units are affordable.

Officials from the city of Hollywood are still assessing the possible impacts of the Live Local Act, spokeswoman Joann Hussey said.

“We do not have plans to contest this law. We are taking the time now to fully understand what it will mean for our city, both in the near term and future,” she said, adding that Hollywood supports building more affordable housing.

Calatayud said it will be city planners, not state officials, who will determine the infrastructure concurrency needs of a project before issuing a permit.

Municipalities also retain most of their sovereignty when it comes to land use. For example, developers still must comply with a city’s historic preservation regulations, setbacks, parking regulations and floor-area ratio, Bilzin Sumberg’s McDowell said. Those regulations may limit how much a developer can build in some cities, such as Miami Beach.

“I think everybody is still learning, if you will,” McDowell said. “And I think there is some likelihood that some local governments will try to challenge the statute.”

Ultimately, no one will know how a city will react until they receive their first Live Local development application, the Metropolitan Center’s Murray said.

“I think it is going to be interesting and will play out differently in different submarkets,” he said. “But until we see projects come forward, we don’t really know.”

Live Local Act highlights

Besides granting greater density to projects that are at least partially affordable, the Live Local Act:

Grants property tax exemptions for affordable units for buildings constructed or substantially rehabilitated in the past five years if more than 70 of those apartments are reserved for affordable housing. If those units are for households that earn between 80% and 120% of an annual area’s median income, then the tax exemption is 75%. If the units are for households at or below 80% AMI, then the units are exempt from ad valorem property taxes.

Allows municipalities and counties to provide tax exemptions for buildings with more than 50 units that provide affordable housing for households that earn at or below 60% AMI.
Includes an exemption on taxes assessed on land owned by a nonprofit that is leased for a minimum of 99 years that will be used for affordable housing.

Offers sales tax refunds of up to $5,000 for building materials and appliances used in an affordable housing unit.

Requires municipalities and counties to publish a list of city-owned properties suitable for use as affordable housing.

Requires local governments to maintain on their websites a policy listing procedures and expectations for expedited processing of building permits.

Forbids any local rent control regulations.

Provides interest-free loans to buy a home of up to $35,000 to members of the state’s workforce who earn up to 150% AMI under the Florida Hometown Hero program.

Author: Erik Bojnansky

‘When Local Control Turns Into Local Out Of Control’: The Battle Over Who Should Fix Texas’ Housing Woes

This is Part 3 of a Bisnow investigative series that explores the “Texas Miracle” — the Lone Star State’s multidecade strategy that attracted hundreds of U.S. companies, millions of people and billions of dollars within its borders. Texas became the ninth-largest economy in the world, but the nation’s housing crisis is hurtling the state toward an uncomfortable reality: It’s becoming unaffordable. Read Part 1 here. Part 2 is here.

Housing advocates weren’t confident that sweeping reform would be accomplished during Texas’ 88th legislative session, and for the most part, they were correct. As the biennial proceedings came to a close May 29, only a handful of the more than 200 bills aimed at housing relief were on their way to the governor’s desk.

Developers, property rights groups, academics, affordability advocates and private citizens spent months testifying before lawmakers about the threat posed by a shortage of housing supply. Elected officials on the right and left put aside differences to rally for a common cause: more housing in Texas for more Texans who need it.

It appears that much of their breath was wasted — at least until lawmakers meet again in two years. The fight to maintain local control coupled with opposition from powerful neighborhood groups and their elected officials was enough to derail the progress many hoped would be made.

Photo: Texas Senate
Constituents look on during during Texas’ 88th legislative session.

“I’m never confident about anything passing just because our legislative process in particular is like Schoolhouse Rock! meets Friday the 13th,” Dallas Builders Association Executive Director Phil Crone said. “It’s just designed to kill every bill possible.”

Advocates notched some wins, including the creation of a state low-income tax credit program and the preservation of Texas’ public facility corporation program. But bills that would have loosened restrictions on building setbacks and heights, lot sizes and accessory dwelling units failed to go the distance.

Despite the outcome, the bipartisan campaign to increase supply made it clear that a growing number of lawmakers recognize Texas has a problem — one that will be exacerbated by projections showing the state’s population could nearly double to 47.4 million by 2050 with housing supply already behind by at least 322,000 units.

That dawning consensus sparked a conversation around whose problem housing is to solve. At the heart of the debate is whether centralizing land use is the best path to change or if snatching authority away from cities and counties is a brash overreach of power.

“There has always been this tug of war between government — it’s nothing new,” former Gov. Rick Perry, who claimed the Texas Miracle as his legacy after serving from 2000 to 2015, told Bisnow. “Finding the balance between thoughtful, fair regulation and overregulation has been the bane of our existence for some time. There are some folks who say we don’t regulate enough, and there are other folks that say they’re overregulating us and it’s costing us.”

During the session, a wave of advocates called for more centralized power to build density and drive down costs. But cities and counties insist policies that dictate housing supply should be made at the local level, with dozens of staff members and elected officials testifying in opposition to bills that sought to infringe on their turf.

“It’s local governments that know best how much density is attainable,” Texas Municipal League Executive Director Bennett Sandlin said. “Even if you think that from a state level we need to encourage more density to generate more affordable housing across the state, you can’t get past the fact that state legislators have no idea what type of infrastructure is in place in those neighborhoods that are going to be affected by their proposal.”

‘God-Given Prerogative’ Or ‘Weak Sauce’?

Land use authority once rested with state governments, but in the early 20th century, states distributed more of that oversight to cities and counties, said Jenny Schuetz, a senior fellow at Brookings Metro. Now, as a lack of supply reaches crisis levels across the U.S., some states are feeling the impact on their bottom lines and are beginning to take that power back.

“Local governments assume it is their God-given prerogative to write zoning, but it’s actually not,” Schuetz said. “The state has the legal authority to set guardrails on what localities are able to do.”

Photo: Wikimedia Commons/Larry D. Moore
Downtown Austin from the Palmer Events Center in 2019.

Municipal governments have made it illegal to build apartments on roughly three-quarters of America’s residential land, according to The Brookings Institution. In cities like Austin, widely perceived as a ground zero in America’s affordability crisis, Schuetz said that share has been as high as 80%.

“Local governments really create the environment in which housing is produced,” she said. “That can have big implications when they set rules that are much more restrictive than what the market wants to build.”

The majority of bills that would have preempted local development codes didn’t survive the session, but the fact that so many were proposed is something of a wake-up call, Sandlin said. Cities and counties that once rested on their laurels may finally be motivated to take action or risk losing control, he said.

“If you know it’s coming and you know the dangers of a one-size-fits-all, maybe that gives the impetus for us to study and figure out some best practices so we don’t get that top-down mandate,” Sandlin said.

The danger of blanket legislation lies in having to abide by rules that might make sense for one community but not another, Sandlin said. Critics of some preemption bills claim they are a conservative legislature’s way of stripping control from larger cities, which tend to lean liberal.

Democrats were behind the failure of several bills that would have removed barriers to development, including legislation around ADUs, lot sizes and building height requirements. Those lawmakers are rightfully skeptical of bills that roll back local governance, given the harm preemption laws have historically had on urban districts, said Ben Martin, research director for advocacy group Texas Housers.

“If land use reform is going to continue to be advocated for at the state level, there’s going to need to be some kind of vision or reconciliation about how this is different and more progressive than other Republican efforts to diminish local control in ways that harm cities,” he said.

State Rep. Donna Howard, a Democrat from Austin, took to Twitter to explain to angry constituents why she voted against ADUs.

Those arguments didn’t go down well with some Texans.

Putting Up Guardrails

Those in favor of preemption say the state has an obligation to step in when existing mechanisms fall short of addressing a growing problem. Thus far, housing affordability is an issue cities and counties have failed to solve, Crone said.

“There are times when local control turns into local out of control, and the state has to jump in and put some guardrails up,” he said.

Municipalities in Texas have for years assumed that a right-leaning government would never mimic the regulatory actions of a progressive state like California and impose top-down solutions. But movement in red states and the number of land use-related bills filed by Texas lawmakers this year challenged that long-held belief.

Photo: Pixabay/alexman89

“This session caught our attention,” Sandlin said. “This density thing, we thought it was more of a coastal problem, more of a right-versus-left sort of deal. We didn’t realize the extent to which everybody is thinking about it.”

Density bonuses are one tool that most major cities have embraced as a low-cost way of achieving affordability without the arduous rezoning process. These programs typically trade things like more units, taller buildings and shorter setbacks for rent-restricted units.

Dallas’ Mixed Income Housing Development Bonus program had 38 projects in various stages of development at the end of March. In Austin, the city’s Affordability Unlocked program loosens requirements for density and parking, but at least half of a project’s units must be set aside as affordable.

The initiative has thus far resulted in seven projects comprising 392 affordable units, according to data from the city of Austin. Five more projects that would add another 429 affordable units were almost complete as of early May.

Housing advocates view any progress as a win, but those additions are a drop in the bucket compared to the total number of multifamily units permitted in Austin each year, which a 2020 city-commissioned study estimated to be upward of 4,100 on average.

The success of initiatives like Affordability Unlocked is threatened by resident opposition to density. A lawsuit filed by the same group that tried to derail the city’s rewrite of its Land Development Code in 2020 is now calling for the program to be repealed based on allegations that Austin officials failed to notify affected homeowners about zoning cases.

The lawsuit also calls for a judge to stay new development until concerns are resolved.

“That is truly concerning on our part because we really believe that we should be continuing to move forward so we don’t have even more of a crisis than we have right now,” said Nora Linares-Moeller, executive director of HousingWorks Austin, adding litigation could stop thousands of new housing units from being built.

This is where state intervention can be effective in safeguarding existing programs while shielding local officials from opposition and the political pressures of NIMBYism, Schuetz said. Senate Bill 491 would have overridden policies in cities like Austin that prevent apartment buildings from being built near single-family homes, but it died before making it to a vote.

“There’s essentially a political process that’s protecting the rights of incumbent homeowners at the expense of basically everybody else,” Schuetz said. “The state government getting involved would benefit a lot of additional groups at the expense of people who don’t want more neighbors.”

When The State Steps In: Could It Happen In Texas?

States across the political spectrum, including California, Oregon, Montana and Florida, have enacted top-down policies in the past few years aimed at advancing the production of housing and bringing down costs.

In most cases, it is too early to tell whether legislation has been effective, but Scheutz said state intervention usually implies the problem has become too big to ignore.

Photo: Wikimedia Commons/Leonard J. DeFrancisci

“What we’re seeing across a number of states, including Texas, is that when enough local governments make it hard to build housing, there are economic consequences that are bigger than any city or town, sometimes even bigger than an entire region,” Schuetz said. “And that’s usually when the state gets involved.”

A surge in housing costs driven by inadequate supply is hindering Texas’ track record of recruiting businesses from out of state. After hitting a record high in 2021, the number of corporate relocations dramatically declined, and many experts say increased costs are in large part to blame.

“A lack of affordability impacts economic development and the ability to attract and keep companies in areas throughout Texas,” said Debra Guerrero, senior vice president of strategic partnerships and government affairs for multifamily developer The NRP Group. “We have to have choices for people, and the more choices you have for people near where they work, you create more successful communities.”

California passed several bills and proposed a few more intended to increase the production of affordable units and strengthen tenant protections in a bid to solve the state’s severe housing shortage and homelessness epidemic.

The state’s historic duplex bill, signed by Gov. Gavin Newsom in late 2021, essentially overrides single-family zoning by allowing owners to subdivide their lots or convert homes to duplexes regardless of local ordinances. The efficacy of that legislation, intended to kick-start supply, has been weak at best, with a January 2023 study by the University of California, Berkeley Terner Center for Housing Innovation showing that Senate Bill 9 activity is limited or nonexistent across 13 cities.

Texas stopped short of approving some bills that would have undermined a local government’s ability to dictate land use. Senate Bill 1412, which would have prohibited cities and counties from banning ADUs, narrowly failed to pass toward the end of the session. This should come as no surprise, housing advocates say, given how disparate Texas is from a state like California.

“They have a different balance of state and local power and a different political atmosphere,” said Christopher Ptomey, executive director for the Urban Land Institute’s Terwilliger Center for Housing. “I just can’t imagine anyone would stay in office very long trying to put those kinds of policies in place in Texas.”

Yet the failure of many preemption bills doesn’t mean cities are off the hook, said Roger Arriaga, executive director of the Texas Affiliation of Affordable Housing Providers. Many of the proposed laws that were submitted for the first time will likely be reintroduced in two years.

“I fully expect they will come back again,” he said. “Shame on you if you’re a city that saw that happening and chose not to act on it or at least take it under advisement before the next session comes around.”

Other states more politically in line with Texas have overridden local sovereignty. Florida Gov. Ron DeSantis in late March signed the Live Local Act, which not only sets aside funds for affordable housing but also supersedes city and county regulations around zoning, density and height requirements.

Developers have since rushed to take advantage of looser rules.

“For the first time in so many years, they’re able to build residential on land where it was previously prohibited,” Government Law Group attorney Keith Poliakoff told Bisnow. “And they’re finally given the density and height necessary to make the development of those blocks profitable.”

Photo: Flickr/Texas State Library and Archives Commission
Texas Capitol in Austin

The passage of House Bill 2127, authored by Rep. Dustin Burrows, a Republican from Lubbock, is a massive hit to local control because cities and counties can no longer enact ordinances that go further than what is already allowed under state law. The bill also overturns any conflicting regulations that are already on the books.

Known colloquially as the Death Star Bill, the legislation could be disastrous for low-income tenants, Martin said. The law is vague, he said, but will essentially prevent local governments from making their own decisions when it comes to eviction protections, the rights of tenants to organize and the administration of local rental assistance.

“Many small successes offset by one very large setback — that’s how I would characterize this session,” he said, adding that preemption of local development codes is exempt from the law.

Supporters like Gov. Greg Abbott said the bill was intended to remove regulations that hinder business and hurt the state’s economy. Opponents say the law targets blue cities and has far-reaching implications for labor rights, noise complaints and nondiscrimination ordinances in addition to tenants rights.

“Cities are going to be very cautious about adopting new innovations and regulations to protect low-income people and help them stay stably housed,” Martin said. “Existing protections in cities around the state may or may not be on the chopping block, and we’re going to have an uneven response from different cities in terms of whether they’re going to take a proactive or reactive approach to their current activities and ordinances.”

An Experiment Gone (Partially) Wrong

When Texas has taken a more heavy-handed role in creating more housing, the outcome hasn’t always been successful. Public facility corporations, approved by the legislature in 2015, are widely viewed as a failed attempt to bring about affordability.

PFCs grant a 100% property and sales tax exemption to developers who dedicate half of their units as affordable. Thirty tax-exempt apartment projects sponsored by PFCs were acquired, completed or under development between 2016 and 2020. They had a combined property value of $1.2B and annual property tax exemption of $32M, according to a study by researchers at the University of Texas.

Rep. Gary Gates, a Republican from Richmond, estimated that since 2020, another 225 PFC deals have removed more than $10B from property tax rolls.

Allegations of rampant abuse prompted state legislators to introduce bills this session to reform the program or repeal it altogether. Opponents of the incentive argued it provides a windfall for developers without achieving the intended benefit of improving affordability.

“Big private equity shops have come into our state and purchased multifamily properties using this structure just to avoid paying taxes, significantly increasing the property’s cash flow, significantly improving their bottom line, with little to no benefit in the ultimate goal of real affordability,” Nathan Kelley, a trustee with Houston Regional Business Coalition and a developer himself, testified at an April 12 Senate committee hearing.

PFCs are a useful tool and can be a critical piece of getting developers to invest in low-income areas of Texas, housing advocates argued. But some thought the incentive was too broken to fix. Senate Bill 805, authored by Sen. Paul Bettencourt, a Republican from Houston, would have removed the tool altogether, but it died in committee.

“Get rid of it,” Molly Cook, an emergency room nurse and Democratic candidate for state Senate District 15, said at the April committee hearing. “It didn’t work. It was a mistake. We can come back, we can write it again next year and make it work. But for now, this is a trauma patient — put a tourniquet on it and stop the bleeding.”

Of the six PFC bills introduced this session, only House Bill 2071 made it to the governor’s desk. The bill, authored by Rep. Jacey Jetton, a Republican from Richmond, would close loopholes in the statute, including one that allowed PFCs to be approved without the consent of local taxing jurisdictions.

New rent and income restrictions are also included to ensure projects are achieving the goal of adding more affordable units.

“The bill added some protections, some transparency and is now going to have a lot more oversight,” Arriaga said. “We saved the program from being eliminated, which is huge.”

Lack Of Action ‘A Limit To Our Success’

Whether unlocking density would translate to more affordable units is a subject of much debate. Those who identify as YIMBYs say broader access to land for development will lead to more homes and lower prices. But skeptics say that approach could lead to more high-end product and very little affordability.

In a study conducted at the University of Minnesota, researchers found that new construction in Minneapolis pushed up rents at nearby older buildings by 6.7% compared to similar buildings that weren’t in gentrified areas. New construction had the opposite effect on higher-priced housing, where rents were 1.7% lower near new construction than in the comparison group.

The solution should land somewhere in the middle, Arriaga said.

Photo: Flickr/Department of Housing and Urban Development

“If you have no oversight on what is created as affordable, that could result in a proliferation of luxury units, but it could also create the slums of the future, which we don’t want by any stretch,” he said. “There has to be a reasonable approach to housing in both camps. It can’t be NIMBY, and it can’t be yes to everything.”

Land use reform is just one piece of the affordability puzzle, Texas Housers Communications Manager Michael Depland said. The state must also expand incentives and funding for low-income housing and drastically improve renters rights.

“We cannot reform land use and declare ‘mission accomplished,’” Depland said in an email. “These fights require the same amount of muscle and attention to effect change for low-income households.”

House Bill 1058 establishes a state low-income tax credit program and was on its way to the governor’s desk as of publication time. After three sessions of trying — and failing — to push the program through, Arriaga said the bill is considered a pivotal win in the fight for housing relief.

The program would add another $25M each year to the roughly $80M Texas receives from the federal government, Arriaga said. Advocates hope lawmakers will beef up that allocation once they see the impact to the state’s bottom line.

“It’s going to allow some developments to get funded that otherwise would not get funded,” Arriaga said. “We’re hoping the legislature will see the value and potentially up what the program is able to distribute, as other states have across the country.”

Traditionalists like Perry believe the state should stay in its lane and let the housing market correct on its own. Eventually, he said, the private sector will respond to demand for cheaper housing without the state forcing its hand.

“I don’t think that’s government’s role,” Perry said. “If you become so popular that the market is able to raise costs to where people can’t afford it, at some time in the future, there will be a self-correction.”

In the first few hours of a special session last week, the Senate passed a $17.6B property tax relief package that, if signed, would save individual homeowners about $681 per year by increasing the homestead exemption by $60K and compressing the school district tax rate.

Perry called this an example of state intervention that isn’t an overreach of power.

“That’s a great example of government sending a message that ‘We got it, we let property taxes get too hot,’” he said. “That’s a major part of the cost of housing in Texas.”

But legislation like Senate Bill 1 does nothing to move the needle on adding supply and bringing down costs.

Housing advocates said all levels of government must partner with the private sector to keep the issue of housing affordability from spiraling further out of control. A blended approach will have to work for now if Texas wants to maintain its economic superiority, they say.

“This isn’t housing for housing’s sake,” Arriaga said. “It’s housing for the economy. Only when everybody is well-employed and well-housed are we going to see the economy continue to prosper. We’re doing great, but there’s a limit to our success if we can’t fix this issue.”

Article Link: ‘When Local Control Turns Into Local Out Of Control’: The Battle Over Who Should Fix Texas’ Housing Woes

High Court Minn. Takings Ruling Could Lead To More Suits

he U.S. Supreme Court’s decision Thursday that a Minnesota county can’t keep proceeds from the sale of a residential condo it took after the owner fell behind on property taxes could lead to additional litigation in the nearly dozen other states that allow for such measures, experts say.

The high court’s unanimous decision Thursday in Tyler v. Hennepin County reversed an Eighth Circuit decision that Hennepin County, which includes Minneapolis, could keep $40,000 in proceeds from a condo sold after the owner had fallen behind by $15,000 on property taxes and related penalties.

The U.S. Supreme Court building is shown May 4, 2022. The high court’s unanimous decision Thursday that a Minnesota county can’t hold on to proceeds from the sale of a condo it took after the original owner fell behind on their property taxes could have a widespread impact on nearly a dozen other states. (AP Photo/Alex Brandon)

“It’s an invitation in those other states to bring their laws into compliance with what the Supreme Court has now ordered,” said Michael Allan Wolf, a law professor at the University of Florida’s Levin College of Law. “If they fail to do so, we could see other cases proceeding.”

“I would imagine [there would be additional litigation] if the right fact pattern presents itself, where there’s a dramatic difference between the amount owed and the value of the property,” Wolf added.

The Pacific Legal Foundation lists 12 states, plus the District of Columbia, that have laws on the books allowing localities to keep the surplus after selling a tax-delinquent property. Alongside Minnesota, they include Alabama, Arizona, Colorado, Illinois, Massachusetts, Maine, Nebraska, New Jersey, New York, Oregon and South Dakota.

Another nine states have legal loopholes that allow local governments to keep surplus funds in some instances, although they generally return the surplus to the former owners. For example, Montana’s law requires the surplus to be returned to owners of residential property, but not commercial owners.

“Some of the other 12 states are very aggressive, and others don’t enforce it as much. But you’re not going to be able to keep the proceeds from a tax sale beyond what the tax liability is,” said David Brunori, a visiting professor of public policy at George Mason University. “What they should do is take their tax money and any fines or interest, and give the rest back.”

Partly at issue is just how narrowly states define “property” when it comes to the question of takings. In the case at hand, the government had argued that takings law didn’t apply to the $40,000 in proceeds.

“The court spent a lot of time talking about general principles of takings and property law, and a lot less time focusing on the specifics of Minnesota law. They seem to be very dismissive of Minnesota law, and instead went back to Magna Carta and early federal statutes … They cited cases involving taxes that were assessed to pay for the Civil War,” Wolf said.

“The way in which the court is widening its focus … could be problematic. If the court continues to do that … it might lead to a more aggressive interpretation and application of the takings clause to the detriment of the government,” Wolf added.

Brunori, meanwhile, said local governments may now look for other ways to claw back some money in the form of penalties or extra fees if they find they can’t keep sale proceeds in cases like the Minnesota one.

“But they’re going to have to be careful, because this is a pretty strong statement from the court,” he said. “Hennepin County could have said, ‘This whole thing is a fine.’ The court didn’t reach that question.”

“The [excessive fines] part is going to be the next battle in courts,” Brunori added.

The high court has heard various takings cases of late, and in many, liberal justices have sided with governments and conservative justices with property owners. This time, however, all justices agreed in siding with the property owner.

“Tyler is … important because it includes an ‘odd couple’ concurring opinion by Justice [Neil] Gorsuch, joined by Justice [Ketanji Brown] Jackson, regarding the Eighth Amendment’s excessive fines clause,” Kevin King, a partner at Covington & Burling LLP, said in a statement sent to Law360 on Thursday.

“Although that opinion is not controlling precedent, it reflects views of two justices who come from opposite sides of the jurisprudential spectrum and as a result, may have a significant effect in lower courts — essentially making it easier for plaintiffs to succeed on excessive fines claims,” King added.

And while the high court has already issued various recent decisions siding with property owners, the latest in the Tyler case further points to a shift of the needle toward property owners in takings disputes.

“I think it sends a strong message not only to the local municipalities and to the states [about] the importance of private property rights to our Founding Fathers and the need to, when [courts] see an injustice … correct swiftly,” said Richard DeWitt of Government Law Group PLLC. “This is an amazing opinion.”

Geraldine Tyler is represented by Christina M. Martin, Lawrence G. Salzman, Deborah J. La Fetra, David J. Deerson and Joshua W. Polk of the Pacific Legal Foundation, Charles R. Watkins of Guin Stokes & Evans LLC, Garrett D. Blanchfield and Roberta A. Yard of Reinhardt Wendorf & Blanchfield, and Vildan A. Teske of Teske Katz PLLP.

Hennepin County is represented by Rebecca Lee Stark Holschuh, Kelly K. Pierce, Jeffrey M. Wojciechowski and Jonathan P. Schmidt of the Hennepin County Attorney’s Office, and Neal K. Katyal, Katherine B. Wellington, Reedy C. Swanson, Nathaniel A.G. Zelinsky and Ezra P. Louvis of Hogan Lovells.

The case is Tyler v. Hennepin County, Minnesota, et al., case number 22-166, in the Supreme Court of the United States.

–Additional reporting by Chuck Slothower. Editing by Philip Shea and Lakshna Mehta.

This story has been edited to include the current job title for David Brunori.

For a reprint of this article, please contact reprints@law360.com.

Article Link: High Court Minn. Takings Ruling Could Lead To More Suits

Author: Andrew McIntyre and David Holtzman