With the approval of significant revisions to a landmark affordable housing law they passed in 2023, Florida state lawmakers have reinforced their commitment to incentivizing an increase in much-needed housing supply, real estate attorneys and developers said.

The revised version of the Live Local Act passed 112-1 in the House on Wednesday following an earlier 40-0 vote in the Senate, but the ultimate version ended up with some surprises. While changes had been anticipated after tensions arose in some municipalities during the law’s rollout in regard to its preemptions of certain local controls on development and building size, several proposed pullbacks did not cross the finish line.

In the end, the most notable revisions ended up expanding the law’s reach, the real estate professionals told Law360, with most expecting the changes to help move affordable and workforce housing projects along and encourage more in the future.

“While the original Live Local Act made great strides in incentivizing development of much-needed affordable housing opportunities for Florida’s workforce, in practice we have found the ability to deliver these projects is often limited by local regulations that required excess parking to be provided in urban areas and placed limits on the amount of buildable square footage that could be accommodated,” said Jorge L. Navarro, a land use shareholder in the Miami office of Greenberg Traurig LLP. “I believe with these recent additional changes, more developers will be encouraged and incentivized to develop under the Live Local Act.”

The changes in S.B. 328 will take effect immediately if signed by Gov. Ron DeSantis, with the exception of a clarification to tax breaks stipulated to apply retroactive to Jan. 1. Applicants who already submitted proposals under the original law would have the option of proceeding under those rules or resubmitting the plans under the new version.

More Density, Less Parking

A few of the changes stood out as likely to have the most impact in the minds of these professionals.

Every source pointed to a new preemption for Floor Area Ratio — or the alternative Floor Lot Ratio measure used in some jurisdictions — prohibiting local governments from limiting FAR below 150% of the highest currently allowed level in their jurisdiction.

As noted by Miami attorney Steven J. Wernick, who just joined Day Pitney LLP as a partner, the omission of local preemption for FAR, which determines the buildable square footage, prevented many Live Local projects from accessing significant boosts in allowed height and density included in the original law.

Greenberg Traurig’s Navarro pointed to “very limited” existing FAR regulations in many commercial districts in unincorporated Miami-Dade County that had been established to accommodate low-rise shopping centers and office buildings and said this change will “go a long way in making these commercial districts viable sites for redevelopment as workforce housing.”

Revised language clarifying that only the qualifying affordable units in a Live Local multifamily development must be rentals and allowing for developers to mix in market rate for-sale condo units should also have a major impact, several sources said.

“The allowance of residential condominium product that is for sale within Live Local developments is also extremely attractive for developers, as it allows for mixed-income and mixed-use projects, allowing the workforce to remain within urban cores while offsetting construction costs,” said Asi Cymbal, chair of Cymbal DLT Cos., a Miami-based investment, development and construction firm.

S.B. 328’s requirement for a 20% reduction in parking requirements for Live Local Act projects within a half-mile of a “major transportation hub” that has parking available for residences within 600 feet and for the elimination of parking requirements for projects within transit-oriented development zones also drew widespread attention, although Henry Torres of Miami development firm The Astor Cos, said he thinks the reductions need to be even more widespread.

“For the regular neighborhoods, that really doesn’t do a whole lot,” he said, noting that the current regulations in Miami-Dade County require more than one parking spot per unit, even though households in the studio apartments that he has planned for two Live Local projects tend to have one or no cars.

Another provision that drew mention from every source was a clarification that in determining the so-called “missing-middle tax exemption” in the law, local property appraisers must include a proportionate amount of the residential common areas and land on the property, in addition to just the square footage of the qualifying units.

“The expanded tax exemptions will further incentivize owners of existing multifamily buildings to designate units for workforce housing with reduced rental rates and assist with making construction of new workforce housing projects more financially feasible,” Navarro said.

Height Considerations

One of the most prominent changes initially proposed in S.B. 328 that made it through the Senate were revisions to the preemptions on height entitlements for qualifying projects.

The Live Local Act currently allows developers to build up to the greatest height allowed within a mile of the proposed qualifying development, but S.B. 328 was initially drafted to narrow that range to a quarter of a mile and to let local governments restrict the height to the higher of three stories or 125% of the tallest building on the adjacent properties, if all adjacent buildings are three stories or fewer.

The revisions appeared to possibly address opposition that arose in Miami Beach over a proposal to build a high-rise tower next to the city’s historic, mid-rise Ocean Drive strip. But the version that passed kept the 1-mile radius intact and added height restrictions only for properties adjacent to neighborhoods zoned for single-family homes.

Several sources said it was right to protect single-family neighborhoods, but some expressed surprise that the revisions stopped there.

“This change will provide for a more gradual transition of height and density from these submarkets into urban cores, which should benefit local municipalities and residents, Cymbal said, but he added, “We will have to continue finding ways for municipalities and developers to work together to preserve the existing character of an area.”

Similarly, Wernick said: “I had expected to see the legislature consider more carveouts for where there has been pushback from local communities concerned with loss of character. They did that with respect to protecting airport flight path areas, but I was surprised the legislature did not address the applicability of Live Local projects in historic districts or areas of critical environmental concern.”

Anthony De Yurre, a partner at Bilzin Sumberg Baena Price & Axelrod LLP, also said he was surprised that lawmakers decided to ban Live Local projects from areas near airports.

“Airports are large sources of employment for workforce tenants, and this prevents those employees from living closer to their jobs,” he said.

Government Law Group PLLC’s Keith Poliakoff, who has represented local governments and developers, also noted that lawmakers considered eliminating industrial properties from the field of those the Live Local Act opened up for affordable housing development but ultimately left that provision untouched.

“This law also helped to satiate the fears of developers who worried that the law could be going away,” Poliakoff said of S.B. 328. “There are numerous projects that have been sidelined by municipalities who had hoped the law would be amended in their favor. These changes will enable these projects to resume, which will help the legislature to produce its desired goal.”

Outlook

For the most part, the revisions drew predictions that they will keep the ball rolling on the Live Local Act and draw in more developers and lead to more affordable and workforce housing supply.

“Many developers were waiting for revisions to tweak projects or update pro formas,” De Yurre said. “I see the changes as enhancing the ability for these projects to get approved, financed and built.”

Day Pitney’s Wernick said he expects to see an increase in Live Local projects in the urban core and communities with mixed-use districts that are experiencing growth in population.

“S.B. 328 buttons up ambiguities from the original legislation adopted in 2023, giving comfort to developers who’ve been sitting on the sideline that the Live Local Act is here to stay,” he said.

Further clarification of the rules and regulations should draw in more developers, especially for mixed-use and mixed-income developments, Cymbal said, although he cautioned that there will still be projects that will end up not making financial sense to pursue.

Although lawmakers have shown a commitment to the Live Local Act and cleared some potential roadblocks that will likely entice more developers to participate, Government Law Group’s Poliakoff said more challenges are also likely to crop up.

“Unfortunately, I see more uncertainty created by many of these changes, which will prompt municipalities to modify their codes to block its applicability. As a result, I believe these changes will spur more litigation until the courts finally tell the local governments that they must apply the law as written,” he said. “I believe that this first amendment to the Live Local Act will certainly not be the last.”

–Editing by Haylee Pearl.

Article Link: Revisions Show Fla.’s Dedication To Affordable Housing Law
Author: Nathan Hale