‘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
Author: OLIVIA LUECKEMEYER

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

‘Are You Respecting Their Dignity?’: Employee-Surveillance Trend Deeply Splits Employers

A new Littler Mendelson survey of in-house attorneys and corporate leaders found two-thirds were concerned about the technologies’ impact on employee morale and compliance with privacy laws.

From keystroke loggers to screenshot-capturing software and webcam eye-trackers, employee-monitoring tools have been on the rise since the COVID-19 pandemic drove white collar workers out of their cubicles and into home offices.

But a new survey from Littler Mendelson found a deep divide among employers on whether the technologies are a good idea. The survey of 515 in-house lawyers, C-suite executives and HR professionals in the U.S. found 45% of companies are using them, but 41% are not and aren’t considering doing so. Twelve percent are considering adoption, and 1% have made the decision to adopt but haven’t yet done so.

Sixty-five percent of respondents expressed concern about the technologies’ impact on employee morale and trust in the company, and an equal percentage expressed concern about their impact on compliance with privacy laws—by, for example, exposing personal information, such as passwords or health conditions.

Littler, which bills itself as the world’s largest employment and labor law practice representing management, waved the caution flag in the report, which surveyed knowledge workers doing their jobs remotely, mostly in tech, financial services and banking.

“Surveillance is unpopular with many employees and could adversely impact employee wellness and mental health, a concern noted by more than one quarter (27%) of respondents. In a competitive labor market, employers known to engage in electronic monitoring practices may have difficulty attracting and retaining top talent.”

Jordan Isrow, a former general counsel at Oxygen Development, said the downsides could increase as the technologies become more sophisticated and potentially invasive.

“AI tools are becoming more sophisticated, and I think you have to draw the line somewhere,” Isrow said. “Yes, you have a higher degree of insight into what your employees are doing, but you’re also maybe creating … a dissonance in the culture that could ultimately be to the detriment of the overall business performance.”

Even so, Isrow, now a partner at Government Law Group, said he would support the use of such tools if he were still in-house, but with caveats.

“I say yes, to a degree, because remote work has changed the entire dynamic of how managers manage. People used to go into the office and clock in, and for the most part you had localized oversight,” he said.

“You could tell if John left his office and he hasn’t been there for the last three hours, or you can see if someone has been talking at the water cooler and they’re not doing what they should be doing. COVID changed that whole dynamic.”

While the conversations might be uncomfortable, Isrow said employers should be up front about what monitoring tools they are using and why.

“I think that it really is incumbent upon management—the executive ownership or the board of every company—to have transparent conversations with its workforce,” he said.

“Policies are just as strong and important here as the law itself in the sense that the handbook is an understanding or agreement between an employer and employee as to what we expect from you and what you expect from us. For me, that’s a starting point. That builds trust between companies and employees.”

The Littler study found the use of surveillance technologies was most prevalent at the largest businesses. It found that 61% of respondents at companies with more than 10,000 employees are using the tools.

Attorneys say employers generally have wide latitude to monitor employees, as long as they have a legitimate business reason for doing so, operate within the bounds of state privacy laws, provide adequate notice, and get consent from their employees.

But the federal government is starting take notice of how companies track employees and has questioned whether automated surveillance might violate workers’ rights and safety.

Late last year, Jennifer Abruzzo, the general counsel of the National Labor Relations Board, said that certain monitoring practices might impair employees’ right to organize or engage in collective bargaining.

And earlier this month, the White House’s Office of Science and Technology Policy put out a call for public comment on how companies use these tools and how it might harm workers’ mental health or contribute to discriminatory employment practices, especially when used to make decisions about promotions and discipline.

“One of the golden rules of employment law is you must treat employees consistently,” said Becky Baker, a partner with Vinson & Elkins’ labor and employment group. “Are you somehow targeting one category of employee or is your monitoring having a disproportionate, adverse impact on employees of a certain protected class? I think that’s the bigger area of risk, as opposed to just an invasion of privacy claim or a violation of state monitoring law claim.”

Robert Foehl, a professor of business law and ethics at Ohio University, said he can see the justification for using productivity tools for certain jobs. “But if it’s being done across the board without reference to the job, that to me is a different thing, and it indicates an unhealthy culture.”

Foehl, who formerly served as retail giant Target’s first director of corporate compliance and ethics, added: “There are several of these tactics that seems to indicate a low level of trust, and I think that’s a big issue.”

Critics of the tools also argue that their use actually might undermine productivity. A paper published last year in the Harvard Business Review, found that workers under surveillance felt less responsibility for their behavior.

The study, based on a survey of 100 employees in the U.S., found that workers who were monitored “were more likely to report that the authority figure overseeing their surveillance was responsible for their behavior, while the employees who weren’t monitored were more likely to take responsibility for their actions,” the authors wrote.

Foehl said while employers prize productivity, they also should consider their employees’ humanity.

“You really need to think about are you respecting the human beings that work for you, are you respecting their dignity, their autonomy and sense of privacy,” he said. “When employees feel valued, they are more productive across the board.”

Article Link: ‘Are You Respecting Their Dignity?’: Employee-Surveillance Trend Deeply Splits Employers
Author: Maria Dinzeo

Developers In A ‘Mad Rush’ To Take Advantage Of Florida’s Live Local Act

When Condra Property Group bought the single-story motel at 2007 North Ocean Drive in Hollywood, Florida, last year, it was planning to redevelop the site into a 10-story luxury hotel. But the project required a height variance, got tied up in the approval process and never broke ground, the developer’s land use attorney said.

Then in March, Florida Gov. Ron DeSantis signed Senate Bill 102, known as the Live Local Act, a dramatic overhaul of the approval process for housing development across the state. As a result, Condra is planning to submit an application to build an 18-story apartment building on the site instead, according to emails seen by Bisnow.

Under the provisions of the Live Local Act, the local government is prohibited from denying the application, Government Law Group attorney Keith Poliakoff said.

The passage of Live Local has already begun to transform development processes across the state of Florida ahead of the law’s July 1 effective date. The law’s far-reaching provisions — which curtail local governments’ authority to approve and deny projects, redefine what affordable housing means and inject hundreds of millions in funding toward new developments — have set off a wave of pre-development activity, industry players said.

“What we’re seeing is a mad rush by smart developers to find industrial, commercial and mixed-use properties,” said Poliakoff, who is based in Fort Lauderdale and represents developers and local governments. “For the first time in so many years, they’re able to build residential on land where it was previously prohibited. And they’re finally given the density and height necessary to make the development of those blocks profitable.”

Several sources told Bisnow they were already preparing proposals for developments that fit the new legislation, with some planning to submit their plans on July 1. They said the law has led a new group of developers who weren’t previously in the affordable housing space to consider projects.

But there is some concern that the $711M in first-year funding the law provides could quickly be depleted — and there is an expectation that the rules around approval could change or be challenged in court.

“You have to be ready to go now,” said J.C. de Ona, the Southeast Florida president at Centennial Bank.

De Ona said Centennial, which has invested over $150M in Southeast Florida’s affordable housing sector, is already hearing from clients that are trying to get “that first wave of funds” that are unlocked this summer.

“The money that’s going to be available I think is going to go pretty quick,” he said. “You’re looking at the entire state of Florida.”

SB 102, which was introduced to the Florida Senate in January and signed into law March 29, was designed to encourage affordable housing development through a mix of loans and tax incentives while also changing zoning rules and prohibiting local municipalities from blocking developments that fit the law’s requirements.

The law provides $711M in funding for existing affordable housing loan programs in the upcoming fiscal year and more than $1.5B in the next 10 years to fund development across the state.

As developers prepare projects that fit the new law’s guidelines, the local governments that will be responsible for implementing the law are still trying to understand how it will impact their approval processes.

“We’ve talked to some local governments, and everybody’s in the same position right now,” said David Deutch, co-founder of Pinnacle Communities, which has built around 10,000 housing units through its affordable housing division while also developing market rate products. “There’s lots of questions. There’s lots to digest in the bill, and everybody’s trying to figure out ‘What does this mean for us?’ and how best to implement this.

“Everybody’s excited about the opportunity, but the devil’s in the details,” he said.

‘The Legislature Usurped Local Power’

Under the Live Local Act, municipalities and counties are prohibited from restricting the density of projects “below the highest allowed density on any unincorporated land in the county where residential development is allowed,” so long as the project meets the law’s other provisions.

The law also changes how height restrictions can be assessed, prohibiting localities from blocking projects because of height so long as the project is “below the highest currently allowed height for a commercial or residential development located in its jurisdiction within 1 mile of the proposed development.”

The provisions put new limits on how local governments can approve properties, saying municipalities “must authorize” projects under certain circumstances and that local governments “may not restrict” density or heights outside of the limits set out in the legislation. By putting these limits in place, the law has taken away some aspects of city planning that have historically been done on the local level.

“For one of the first times that I can remember in state history, the legislature usurped local power,” Poliakoff said. “It has now taken over land use and zoning decisions and has taken over a municipality or county’s right to govern the development of lands within its jurisdiction if that land can be utilized for attainable housing.”

Poliakoff said he expects local governments to still try and reject projects on the basis of density and height after July 1, but he said those decisions would likely lead to lawsuits from developers.

“Municipalities are going to push back and are going to try to do everything in their power not to implement the law because they are upset that it usurps their power,” Poliakoff said. “I’m already hearing through the grapevine that a lot of the eastern cities that contain land on the barrier islands are going to push back. But the law is very plain, very easy to understand. And it will be hard for municipalities to get around the clear and strict and unambiguous language that’s contained in the statute.”

Other attorneys and developers told Bisnow they have had conversations with local officials who support the intent of the Live Local Act and are leaning into it.

“The jurisdictions I’m working with so far are embracing it,” said Iris Escarra, an attorney and co-chair of the land use practice at Greenberg Traurig. “They’re trying to implement it and they’re trying to see how they can incorporate it into their traditional application processes.”

Escarra said she has spoken to politicians and their constituents who are concerned about a lack of affordable housing in the state and think this legislation has the potential to streamline the approval process.

“The leadership of the state is telling the local governments that they need to cut through the red tape,” Escarra said. “The state wants affordable housing. The state wants to give flexibility. The state wants you to do it expeditiously.”

But with less than eight weeks until the law goes into effect, local governments are still working to develop rules and the process for getting approvals.

“The only thing that I think is going to cause a little bit of havoc, at least initially, is how many of these are going to be filed, how quickly they’re going to be filed,” Escarra said. “The local governments pretty much run a regular ship.”

Landowners Think ‘They’ve Hit The Lottery’

The Live Local Act also includes a number of provisions meant to encourage affordable housing development beyond state loans and the flattening of the approval process.

It expands the definition of affordable, allowing developers to claim some tax credits for units leased to tenants making up to 120% of an area’s median income.

In Miami-Dade County, that means developers would need to make units affordable to a single person making $81,960, according to Department of Housing and Urban Development data. In Broward County, a single person would qualify if they made less than $76,200. In both cases, developers who build to the Live Local Act could charge rents above $2K per month for 40% of the designated affordable units while listing the other 60% of units at market rate.

“I will say there is an intense amount of interest” from developers, said Becky Wilson, an Orlando-based land use attorney at Lowndes.

“There are a lot of groups that believe that with the combination of the tax incentives, along with skipping the political approvals, they can make this work.”

The law will also open up commercial and industrial zoning to residential development, provided the property has at least 40% of its units restricted at the new affordability level. Developers are looking at converting properties like big-box stores, old office buildings and shuttered fast-food restaurants into residential properties, sources said.

“There’s people out there that are looking into it a bit more now to see if they can get incentives at the property they’ve been looking at and see if they get the zoning they want with the bill,” Centennial Bank’s de Ona said. “A deal that was not financeable before, we can make them financeable because there’s more equity available.”

The law could also alter the industrial development landscape, as property owners may begin to weigh the return on investment from building warehouses against the potential of a mixed-income residential development.

“Everyone who owns a piece of industrial property today believes that they’ve hit the lottery,” Wilson said. “Finding a place to build a warehouse is going to be expensive because the owners think, ‘Wait a minute, this is a new 10-story apartment complex.’”

As the development community, along with local and state governments, prepare for Live Local to go into effect, there is a broad expectation that the law will need to be updated and clarified. Some expect new legislation will be introduced to clarify some of the rules and restrictions put in place by Live Local.

“July 1 is the starting point for implementing this bill. It’ll take time,” Pinnacle’s Deutch said. “It will take a concerted effort on behalf of local governments and the development community to sort through the issues and come up with strategies that make sense, as opposed to just being adversarial.”

In the meantime, developers are working with lawyers on new proposals even as they acknowledge that uncertainties in the economy continue to make financing projects a challenge.

“I mean, what do you have to lose getting it approved administratively?” Wilson said. “I would anticipate a lot of business getting these projects approved, and then I don’t know if they actually get built.”

Article Link: Developers In A ‘Mad Rush’ To Take Advantage Of Florida’s Live Local Act
Author: Matt Wasielewski, South Florida

Impact of affordable workforce housing law still being assessed by developers, experts

Keith Poliakoff, Government Law Group
GOVERNMENT LAW GROUP

It’s been more than a month since the passage of a statewide law that would grant developer massive building rights throughout Florida if residential units are reserved for workforce housing.

However, the true impact of the law, which won’t go into effect until July 1, is still being assessed by developers, planners, and attorneys.

“There is universal recognition that something needs to be done to build more affordable housing,” said Ana Bozovic, founder of Analytics.Miami and a governor at the Miami Association of Realtors. “But it’s still early. Developers need to get their heads around it.”

Edward “Ned” Murray, associate director of the Jorge M. Perez Metropolitan Center at Florida International University, said the legislation is certainly a “big deal.” But with rises in land costs, insurance costs, and insurance rates it isn’t clear if the incentives will be enough for builders to construct more affordable housing.

“It’s hard to say at this point until the projects come forward,” Murray said.

Senate Bill 102, also known as the Live Local Act, provides money, tax breaks, and generous zoning for developers who include affordable or workforce housing in their projects.

Among some of the provisions of the law:

An infusion of $771 million in funding for affordable housing projects via the Florida Housing Finance Corporation.
Requires counties and municipalities to authorize multifamily and mixed-use residential projects on any land that is zoned commercial, industrial, or mixed-use if at least 40% of a residential project is reserved for people making below 120% of an area’s median income (AMI). If the project includes office and retail, 65% of the residential units must be reserved for households making below 120% AMI. Those projects will be approved by an administrative level and won’t come before an elected body for a vote.
Grants those developers the maximum density (i.e. units per acre) within that city or county as well as the maximum height limit within a mile of that project.
Allows developers to pursue Live Local Act building rights if just 10% of a project is reserved for people making below 120% AMI with approval by a county or city commission.
Keith Poliakoff, an attorney with Fort Lauderdale-based Government Law Group, said the incentives alone are enough to make it profitable for developers to build attainable housing in even expensive coastal areas. “The bonus densities and height equalized the playing field,” he said.

The law also annihilates local zoning regulations designed to restrict development. This includes a charter amendment in Miami Beach that requires voter approval for increases in density that’s been in effect since the late 1990s.

“If someone has an industrial, commercial, or mixed-use zoned property, they would be crazy not to consider utilizing this law. This enables them to redevelop their property to the maximum value,” Poliakoff said.

However, many of the provisions of the law are still unclear, Poliakoff said, and he anticipates a lot of cities, and people, will challenge the law in court.

“There is a lot grumblings out there and it is not just people worried about height and density coming into an area,” Poliakoff said. Another major issue is the future of infrastructure. “There is nothing in the law to require or verify that there is enough water and sewer to support the new development,” he added.

Article Link: Impact of affordable workforce housing law still being assessed by developers, experts
Author: Erik Bojnansky

Florida lawmakers tackle affordable housing, condo safety, foreign investment

Affordable housing, insurance lawsuit reform already signed into law

Gov. Ron DeSantis (Photo-illustration by Ilyan Hourie/The Real Deal)

Against the backdrop of controversial measures regarding permitless carry, a six-week abortion ban and Gov. Ron DeSantis’ feud with Disney, Florida state lawmakers have advanced a number of bills this session that could alter the landscape for developers, brokers and property owners in the Sunshine State.

Among the most consequential real estate bills to pass this session is Senate Bill 102, which sets aside more than $700 million for affordable and workforce housing and incentivizes developers with major tax breaks, at a time when South Florida has emerged as one of the nation’s least affordable housing markets.

The Legislature could also vote on bills tied to demolitions of properties in historic districts, challenges to development approvals and more before the session ends on May 5.

Affordable housing

The law, called the Live Local Act, supersedes local governments’ zoning, density and height requirements for affordable housing in areas zoned for commercial or mixed-use development, and strips local municipalities’ ability to enact rent control, which was previously only possible during a housing emergency. It will also replenish a state housing fund that has been gutted by Florida lawmakers for years.

The law was signed by DeSantis in late March and takes effect July 1.

It provides funds and incentives to affordable housing developers and is intended to encourage market-rate developers to incorporate mixed-income housing into their buildings. The $711 million it sets aside could also help fill funding gaps that exist in part because of recent cost increases in construction, land, insurance and financing.

“This landmark legislation is the first of major consequence to help ensure affordable housing will be built,” said attorney Keith Poliakoff of Fort Lauderdale-based Government Law Group. “It takes a lot of the handcuffs off the developers who develop this type of housing.”

Condo safety and insurance

After a condo safety law that passed last year sent condo associations scrambling to meet looming deadlines for structural repairs and financial requirements, lawmakers are advancing a new bill that seeks to clarify certain aspects.

Senate Bill 154, now in the Florida House, provides some flexibility to the condo safety measure, which was signed into law a year after the deadly collapse of Champlain Towers South in Surfside in 2021. The latest bill gives local municipalities some authority in enforcement and limits the “milestone” inspection requirements for residential condo or co-op buildings.

The law passed last year requires buildings to have an architect or engineer complete structural integrity reserve studies, which then determine how much a building has to have in its reserves.

More important, it eliminated HOA associations’ ability to waive the funding of their financial reserves, giving them until the end of 2024 to raise monthly dues or enact special assessments to fully fund reserves, if needed, by the start of 2025.

It also requires buildings of three or more stories to go through inspections once they are 30 years old, or 25 years old if within three miles of the coastline, and every 10 years after that.

It takes a lot of the handcuffs off the developers who develop [affordable] housing.
KEITH POLIAKOFF, ATTORNEY

Rather than a blanket requirement, the new legislation would give local agencies the power to determine if condo and co-op buildings within three miles of the coastline need to be inspected at 25 years.

The latest bill would also give associations a bit of breathing room until the deadlines go into effect. Condo boards could waive full or partial funding of financial reserve requirements — if they secure a majority vote of the entire building’s voting interests — but only until the end of 2024.

That could provide temporary financial relief for many communities that are strapped for cash, said Miami attorney Marci Cohen. A number of properties statewide are playing catchup, trying to make repairs, fund their reserves and keep pace with other growing costs.

The Legislature also tackled insurance reform with House Bill 837, which DeSantis signed into law in March. The measure, which proponents say is intended to weed out frivolous lawsuits and could encourage insurers to stay or return to Florida, makes it harder and more expensive to sue insurance companies — including property insurers. It also reduces the statute of limitations, limits damages and eliminates certain attorneys’ fees.

Restrictions on foreign investment

A bill restricting foreign investment in Florida real estate that previously had bipartisan support is now the subject of intense criticism. House Bill 1355 would ban Chinese nationals from purchasing real estate anywhere in the state, unless they are U.S. citizens or residents who currently own property in the state. It also restricts foreign investment from six other countries.

Experts caution that the bill would send a negative message to investors from other countries, though it likely wouldn’t have a huge immediate effect on foreign investment in South Florida, where Chinese investment has dwindled since before the pandemic.

Lender Daniel Ettedgui, who flew to Tallahassee to speak out against the proposed legislation, called the bill racist. “If you do that today with the Chinese, what’s next?” he said. “History is repeating itself.”

As things stood late last month, the bill would force Chinese investors to register their existing ownership of such properties with the state, which some critics compared to Nazi Germany requiring Jews to register their property with the government.

It would also ban foreign nationals from Russia, Iran, North Korea, Cuba, Venezuela and Syria from purchasing agricultural land in the state, and from buying land within 20 miles of a U.S. military installation or critical infrastructure facility.

Legislators across the country have spoken out over the potential national security threats that come with foreign investors and their governments owning agricultural land, but many brokers said the proposed bill goes too far. It could restrict Chinese buyers from purchasing condos or houses for their children attending college, as well as Chinese investors who buy into retail and office properties.

“As it stands, the Florida bills could make it difficult for families to purchase homes for students studying in Florida,” said Ana Bozovic, founder of real estate data firm and brokerage Analytics Miami. “Is that something we really want to restrict?”

Article Link: Florida lawmakers tackle affordable housing, condo safety, foreign investment
Author: Katherine Kallergis

Andrew Ingber Joins Government Law Group as an Associate Attorney

Andrew J. Ingber

Government Law Group (GLG) is pleased to announce that Andrew J. Ingber has joined the firm as an Associate Attorney. Mr. Ingber brings significant litigation experience and a commitment to achieving favorable outcomes for clients.

Mr. Ingber joins GLG after working at a large Florida law firm, where he successfully litigated high-exposure cases in the areas of premises liability, products liability, and pharmacy negligence for corporate clients.

Mr. Ingber received both his Juris Doctorate and undergraduate degrees from the University of Florida.

During law school, Mr. Ingber worked as a summer clerk to United States Magistrate Judge Alicia O. Valle, in the United States District Court for the Southern District of Florida. He also served as Vice President of the Levin College of Law Alternative Dispute Resolution Team and was a member of the Journal of Technology Law & Policy.

“We are thrilled to welcome Andrew to the GLG team,” said GLG Litigation Partner Jordan Isrow. “His diverse array of litigation experience and expertise in dispute resolution will be a tremendous asset to our clients, and we look forward to his contributions to the firm.”

Mr. Ingber brings with him a wealth of experience at both the state and federal levels. He will focus on commercial and governmental litigation at GLG, further strengthening the firm’s reputation for innovative and effective dispute-resolution strategies. With his addition to the team, GLG is well-positioned to continue to provide clients with exceptional legal representation and achieve favorable outcomes in even the most complex cases.

“I am honored to be a part of Government Law Group’s team, and I am excited to collaborate with my colleagues to find creative and effective solutions for our clients,” Mr. Ingber said. “I am committed to upholding the firm’s reputation for excellence and providing the best possible legal representation.”

In his spare time, Mr. Ingber enjoys spending time with family and friends, playing golf, and rooting for his favorite sports teams, including the Florida Gators.

Article Link: Andrew Ingber Joins Government Law Group as an Associate Attorney

New Florida affordable housing funding bill to spur massive redevelopment

Florida Governor Ron DeSantis – JIM CARCHIDI

Florida Governor Ron DeSantis

A new bill signed by Florida Gov. Ron DeSantis that aims to spur development of affordable housing across Florida could lead to a wave of redevelopment of low-density areas.

The Live Local Act (SB 102) increases funding for affordable housing projects, makes it easier for developers to win approval for affordable housing in commercial districts, and prohibits government rent control.

Central Florida has become one of the least affordable housing markets in the nation over the last few years. A surge in migration from other states created frantic competition for homes and apartments, which drove up housing prices and rents.

“To have housing for teachers, police officers, firefighters, all these important things, you can’t do it if they have to drive an hour to work every day,” DeSantis said at the signing ceremony in Naples.

The Live Local Act was approved 103-6 in the House and unanimously in the Senate.

It contains $771 million in funding for affordable housing programs through the Florida Housing Finance Corp. (FHFC). That breaks down to $259 million for the SAIL programs with low-interest loans for developers; $252 million for the SHIP program with loans to developers in partnership with local government funding; $100 million to alleviate inflation-related costs for affordable housing projects; $100 million for Hometown Heroes to provide down payment and closing cost assistance to first-time homebuyers who work in law enforcement, firefighting, education, health care, child care or military/veterans.

It also created a sales tax refund of up to $5,000 on building materials for affordable housing projects funded by FHFC.

“This is transformative,” said David O. Deutch, a partner at Miami-based Pinnacle, one of the largest affordable housing developers in Florida. “There is now a certainty of funding and an iron-clad commitment to affordable and workforce housing in the state.”

The Florida Housing Finance Corp. always has more projects seeking funding than it has money to award, so this act means more projects will obtain funding and move forward. Additionally, Pinnacle can seek out more projects because it has a higher chance of winning funding, he said.

Right now, a lot of worthy affordable housing projects in Florida were stuck because Florida Housing Finance Corp. funds weren’t available and the cost of construction has increased, he said. Those projects are now more likely to move forward.

The extra funding will help developers build affordable housing amid a challenging environment with increased construction costs and higher interest rates that make loans more expensive, said Brian Sidman, founder of Miami-based BAS Holdings, which builds workforce and affordable housing through its subsidiary Redwood Development Co. He’s going to ramp up his development team to take advantage of the new law and meet the overwhelming demand for affordable units.

“We have a significant housing crisis and we need a lower cost of capital and changing zoning in certain areas to allow for workforce development to come in.”

The Live Local Act preempts certain local zoning rules to make it easier for affordable housing developers to secure approval.

“The attainable housing law will immediately change the landscape of development in Florida,” 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.”

Under the act, a municipality 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 housing or workforce housing for 30 years. That means the rentals would be for people earning up to 120% of area median income. This project would be approved by city administration without a zoning, land use change, special exception or comprehensive plan amendment, so the City Commission wouldn’t need to vote. If this is a mixed-use project, at least 65% of the building must be for residential.

The density allowed at such a project could be equal to the highest density allowed anywhere in the municipality where residential is permitted. As for height, the project could be as tall as any building within a one-mile radius in the same city, or three stories, whichever is taller. The developer could also reduce the number of parking spaces if the site is near a public transit stop.

Poliakoff said development dynamics will change across Florida and lead to developers seeking property in prime coastal locales to redevelop. For instance, the city of Hollywood has zoning and height restrictions that prevent the redevelopment of low-rise hotels on the beach into high-rise residential towers.

With this new law, he said developers could replace those hotels with a residential high rise containing the maximum density in Hollywood – 95 units per acre for a condo built on the ocean in the 1970s – and the same height. As long as 40% of the units are workforce housing, the city can’t deny the project, he said. Poliakoff noted the law has no limits on unit sizes, so the workforce housing units could be small studios and the rest of the project could be luxury apartments.

In Sunny Isles Beach, this law would allow redevelopment of the commercial centers on the west side of A1A with the same density as the condos on the beach, as long as workforce housing is included, Poliakoff said. The same goes for commercial areas in cities that have recently been resistant to more density.

He noted that some municipalities may struggle to afford infrastructure improvements to handle more dense development than they planned for.

“My clients are all looking to buy commercial, industrial and mixed-use properties that have significantly gone up in value because of this bill,” Poliakoff said. “Developers will make billions of dollars off this law and it will increase the amount of affordable and attainable housing in Florida.”

The Live Local Act will result in a wave of redevelopment, said Walter Duke, head of Fort Lauderdale-based appraisal and real estate consulting firm Walter Duke & Partners and chair of the Broward Workshop’s affordable housing committee.

There are many underutilized shopping centers and office buildings in locations that are functionally obsolete and could become affordable housing, he said. Older warehouses also could become affordable housing, he added.

“The days of building single-family subdivisions are over,” Duke said. “We need to go vertical. People will have to embrace density.”

Article Link: New Florida affordable housing funding bill to spur massive redevelopment
Author: Brian Bandell

Judge scolds Boca mayor, 2 council members in lawsuit over luxury beachfront home

The developer of a long-stymied beachfront luxury home proposed in Boca Raton has moved a big step closer to building it after a partial victory in federal court where the judge excoriated the mayor and two city council members for purported bias.

U.S. District Judge Rodney Smith ruled that Natural Lands LLC has a vested or absolute right to build the controversial four-story, 8,600-square-foot home at 2500 North Ocean Blvd.

City spokeswoman Anne Marie Connolly said she couldn’t comment on pending litigation but that once the city receives the judge’s final order, it will decide how to proceed.

Natural Lands first submitted plans for the proposed home in 2012 and, because of its size, got a variance in 2015. The city didn’t deny permission to build until 2019, said Dan Abbott, an attorney who represented the city at trial. Natural Lands then sued, alleging that city officials were biased and denied it due process by communicating privately about its merits in advance of their vote.

This was “a concerted scheme orchestrated at the highest levels of local government” to deprive Natural Lands of its right to build a home, its lawyer, Jordan Isrow said in closing arguments. Why? Political pressure resulting from strong public sentiment opposing private oceanfront development, he said in an interview.

“Just because you have good intentions, just because you’re trying to do right by your constituents or residents, you still have to follow the law,“ said Isrow, a Boca Raton native who also is a Parkland city commissioner.

A rendering of the four-story, 8,600-square-foot-home at 2500 North Ocean Blvd. in Boca Raton. U.S. District Judge Rodney Smith ruled that Natural Lands LLC has a vested or absolute right to build the house.

Opposition to home: Potential to endanger nesting sea turtles

Opponents of the planned home claim, among other things, its potential to harm sand dunes and disorient endangered nesting sea turtles and hatchlings. Natural Lands hired experts to address those sorts of issues, Isrow said.

Natural Lands also contended that the city’s actions were a “taking” or “inverse condemnation” of its property by limiting it to an “accessory use” such as a walkway or private beach.

“Without a clear and vested right, the property is not worth nearly as much as it would be with the vested right to build a single-family home,” Isrow said. Natural Lands paid $950,000 for the 0.3-acre lot in 2011, according to property records.

Isrow argued at trial that his client should be compensated by the city for depriving it of a more beneficial use of the property. The city’s attorney, Dan Abbott, countered that Natural Lands could still build on the site, but not in a way adverse to the environment or the neighborhood.

Developmental Services Director Brandon Schaad agreed. “I think there’s plenty of opportunity to build a less obtrusive, less impactful project that would be a perfectly reasonable home,” he testified. The house would be “something with less glass on the east-facing side, something that’s less large and imposing that’s just more sensitive to its environmental impact.”

Smith ruled against Natural Lands on the “takings” claim. He did award it attorneys’ fees and costs, which Isrow said is “a significant number.”

Judge has harsh language for Boca officials

The judge did not hold back in his words directed toward Boca Raton’s officials.

  • Of Mayor Scott Singer, Smith said: “Clearly biased by any stretch of the imagination. He could not even address … what does the term ‘being fair’ mean. He looked at us like a deer in headlamps, who was a person, a trained lawyer that he has never heard of the word ‘fair’ before.”
  • Council member Andrea Levine O’Rourke, the judge said, “feigned ignorance” on the stand and “the record is replete with her bias. Her credibility is completely shot.”
  • Council member Monica Mayotte, he said, demonstrated “complete bias from the start.”

Article Link: Judge scolds Boca mayor, 2 council members in lawsuit over luxury beachfront home
Author: Larry Keller

South Florida real estate projects in the pipeline for the week of April 7

Jupiter Medical Center could expand with a five-story bed tower.
ESA ARCHITECTURE

Jupiter Medical Center has proposed an $110 million expansion.

The nonprofit hospital currently has 248 beds at 1210 Old Dixie Highway. It wants to build a 92-bed addition on the east side of its campus. The new five-story building would total 135,000 square feet.

In addition, a five-story parking garage would be built with 845 spaces, including 80 electric vehicle charging spaces.

Apartments planned in Goulds

Lanai Landings II LLC, an affiliate of L. Milton Construction, wants to build the second phase of its apartment complex in the Goulds neighborhood of Miami-Dade County.

Located on the 1.8-acre site at 14550 Mable St., the nine-story project would total 428,788 square feet, with 274 apartments, 2,741 square feet of retail and 371 parking spaces. Amenities would include a gym, a dog walk and a park.

The first phase of Lanai Landings, with 54 units, was completed in 2020.

Related Group seeks development deal

The Related Group’s affordable housing arm is seeking a deal with Miami-Dade County to redevelop a public housing site in West Little River.

The developer is seeking a 75-year ground lease for the 3.6-acre site at 860 N.W. 95th St. West Palm Courts and Palm Towers currently has 191 public housing units.

Related would build at least 272 apartments, with 191 affordable units and the rest either workforce or market-rate housing.

Pinnacle proposes apartments

Pinnacle has proposed an eight-story apartment complex in North Miami.

The developer, through affiliate Arch Creek Station LLC, has the 1.6-acre site at 12616 Arch Creek Road and 1486 N.E. 127th St. under contract. Totaling 435,831 square feet, the project would have 239 apartments, a 393-space parking garage and four parking spaces on the street. Amenities would include a pool, a fitness center, a dog park, a lounge, a clubroom and a coworking room.

D.R. Horton has Florida City site under contract

D.R. Horton (NYSE: DHI) has proposed a townhouse community in Florida City.

The national homebuilder has the 4-acre site on the east side of Southwest 10th Avenue/Redland Road, just south of Southwest 352nd St., under contract from Baltazar Royal LLC. It wants to rezone the land to build 58 townhouses.

Banyan Cay hotel, golf owner in Chapter 11

The 200-acre Banyan Cay hotel, residential and golf project in West Palm Beach could be sold through bankruptcy after the developer filed for Chapter 11 reorganization protection.

Banyan Cay Resort & Golf LLC filed the Chapter 11 petition in U.S. Bankruptcy Court in West Palm Beach. Gerard A. McHale, the proposed chief restructuring officer, signed the petition for the West Palm Beach-based company. It was previously managed by developer Domenic J. Gatto Jr.

Miami-based attorney Joseph A. Pack, who represents the debtor, wasn’t available for comment.

The debtor owns the 150-room Hyatt-branded hotel under construction at 2020 Banyan Resort Way, a 130-acre golf course designed by the legendary Jack Nicklaus, and development sites approved for 179 condo units, 28 single-family homes and 22 villas.

The Chapter 11 filing stays a $95.1 million foreclosure judgment won in February by U.S. Real Estate Credit Holdings, in care of Calmwater Capital.

In addition to the mortgage, the company owes $5 million in mezzanine debt to foreign investors through the EB-5 visa program. The mezzanine lender started the process of seizing its equity in the company.

“The debtors are optimistic that with debtor-in-possession funding and the breathing room afforded to debtors under Chapter 11, the debtors will be in a prime position to engage in a robust sales process for the almost-completed hotel, golf course, development site for 179 condominium units, villas, and all other real and personal property related thereto that will maximize recoveries for all parties,” McHale stated in his declaration in the case.

HE SAID IT

Keith Poliakoff, Government Law Group
GOVERNMENT LAW GROUP

“The attainable housing law will immediately change the landscape of development in Florida. 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.”

Attorney Keith Poliakoff, founder of Government Law Group, on the Live Local Act, the affordable housing bill signed by Gov. Ron DeSantis

Article Link: South Florida real estate projects in the pipeline for the week of April 7
Author: Brian Bandell