Politics of housing: The Florida Live Local Act

While the Act has many benefits that incentivize the development of affordable housing, the following are arguably the most important to developers:

Land use flexibility

Eligibility: In order to qualify for land use benefits under the Act, at least 40% of the units in the project must be affordable (i.e., rented at the rental rate posted by the Florida Housing Finance Corporation (“FHFC”) for households earning 120% of the Area Median Income (“AMI”), or lower, for at least 30 years), and no greater than 35% of the project can be non-residential. Further, the project must be located in an area zoned for commercial, industrial, or mixed use.

Expanded Uses: The Act expanded the sites that can be developed for housing by permitting multifamily and mixed use residential uses to be constructed in areas zoned for commercial, industrial, or mixed use. This increases the number of sites that could be suitable for residential projects.

Height Bonus: Increases the maximum height to the greater of 3 stories, or the highest height currently allowed for a commercial or residential development located within a 1-mile radius of the project (and within the municipality).

Density Bonus: Increases the maximum density to the highest density permitted anywhere in the municipality where residential development is allowed.

Intensity Bonus: Increases the maximum floor area ratio (“FAR”) to 150% of the highest FAR permitted anywhere in the municipality.

Reduced Parking Requirements: If a project is located within one-half of a mile from a major transportation hub (e.g., transit station, bus station, or light rail), required parking is reduced by 20%. The Act also provides that a municipality must eliminate parking requirements if a proposed mixed-use residential project is located within a “transit-oriented development or area.”

Administrative approval process

In addition to land use flexibility, qualifying projects (subject to the same eligibility requirements as above) benefit from a streamlined administrative approval process. Rather than a public hearing, these projects are approved by working directly with city staff, greatly reducing the amount of time spent obtaining project approvals. A shortened entitlement process not only brings affordable housing to the market sooner, but also reduces carrying costs (e.g., property taxes, insurance, interest, etc.) and other predevelopment costs such as legal and consulting fees. Between the lower costs, and quicker delivery of supply to the housing market, the benefits of utilizing the administrative approval process greatly increase the financial viability of developing affordable housing.

Property tax exemptions

Eligibility: To qualify, a multifamily project must have 71 or more units dedicated to affordable housing, and must have been completed within five years of the application for the exemption.

100% Property Tax Exemption: Units rented to households earning 80% or less of the AMI, with rents that do not exceed the lesser of (i) the rental rate posted by the FHFC for households earning 80% of the AMI or (ii) 90% of the fair market rental value, are eligible for a full property tax exemption.

75% Property Tax Exemption: 100% Property Tax Exemption: Units rented to households earning 120% or less of the AMI, with rents that do not exceed the lesser of (i) the rental rate posted by the FHFC for households earning 120% of the AMI or (ii) 90% of the fair market rental value, are eligible for a 75% property tax exemption.

Improving the act

The Act has already been amended since its adoption in 2023, reflecting a commitment to continuously improve affordable housing policies in Florida. While the Act undoubtedly provides significant incentives to encourage the development of affordable housing, it could be improved further. For example, even though the Act provides land use benefits and a streamlined approval process, eligible projects still must comply with other aspects of the local zoning code, such as setback requirements, which may limit the ability to maximize the benefits of the Act. As a result, certain municipalities opposed to affordable housing are able to leverage their local zoning regulations to hinder the approval of proposed affordable housing projects.

To help reduce these barriers, the Florida legislature could further amend the Act to expand the preemption of local zoning ordinances by, for example, standardizing the application of setback requirements throughout the state. Alternatively, the legislature could incentivize consistency with the state’s goals by providing grants to municipalities that adjust their zoning ordinances. The legislature could also tie such funding to the regularly required State review and adjustment of zoning ordinances to deter local regulation that might otherwise unnecessarily hinder affordable housing development.

Authored by Tim DeKeyser, Ira Teicher, and Dennis Vila.