Florida lawmakers tackle affordable housing, condo safety, foreign investment
Affordable housing, insurance lawsuit reform already signed into law
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.
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