Live Local Act II: 2024 Proposals to Expand Affordable Housing

Florida lawmakers are currently revisiting and revising the Live Local Act (the “Act”), Fla. Stat. §§ 125.01055, 166.04151 (2023), which was enacted last year to address Florida’s growing affordable housing crisis. The Act’s core goal is to increase the availability of affordable housing by removing or reducing bureaucratic barriers that local governments impose on affordable housing projects by incentivizing private development. Issues raised over its application during its first year in action have prompted the Legislature to consider amendments to the Act to more narrowly tailor its focus on housing affordability in Florida while adding clarity to its impacts on local governments.  

As of this writing, companion bills containing the proposed changes are making their way through the state House (HB1239) and Senate (CS/CS/SB328).  CS/CS/SB328—as amended—has unanimously passed its Senate committees and is scheduled for a vote on February 7, 2024.  Its House companion, HB1239, has not yet had any hearings, which suggests that the House is largely deferring to the Senate to take the lead.  The proposal is a priority of current Senate President Kathleen Passidomo, a real estate attorney. 

The proposed legislation may undergo more changes before passage and is subject to the Governor’s approval. The 2024 legislative session concludes on March 8, 2024.

Effective July 1, 2023, the Act preempts local governments’ land use related powers regarding affordable housing developments in several ways. For example, the Act:

1. Expressly preempts any law, local ordinance or regulation that conditions a multifamily or mixed-use residential development on obtaining a zoning or land use change by requiring that a local government “must authorize multifamily and mixed-use residential” developments “if at least 40 percent of the residential units in a proposed multifamily rental development are, for a period of at least 30 years, affordable as defined in s. 420.0004. . . a [local government] may not require a proposed multifamily development to obtain a zoning or land use change, special exception, conditional use approval, variance, or comprehensive plan amendment for the building height, zoning, and densities authorized under this subsection”;
2. Allows developers to take advantage of the maximum density requirements located anywhere in the local government’s jurisdiction and allowed under its land development regulations;
3. Preempts building height restrictions by allowing an applicant to match the height of the tallest currently allowed commercial or residential building within 1 mile of the proposed development, or 3 stories, whichever is higher;
4. Requires the local government to administratively approve any development that meets the Act’s requirements without the need for additional approvals if the development satisfies the municipality’s land development regulations;
5. Relaxes parking requirements based on the proposed development’s proximity to transit stops; and
6. Grants ad valorem tax exemptions provided that a specified percentage of the residential units in a proposed development are affordable to individuals earning up to 120% of the local area median income.

§§ 125.01055(7)(a)-(e); 166.04151(7)(a)-(e); 196.1978(3)(d)1., Fla. Stat. (2023).

The proposed legislation comes on the heels of some local government pushback to the Act—including threatened lawsuits by Pasco County against developers hoping to use the Act to develop workforce housing on job-creating sites zoned for commercial and industrial uses.   These amendments seek to provide greater clarity on key features of the Act as well as modifying some of the Act’s parameters to accomplish its overall goals without cutting too deeply into the tax coffers of local governments.  The proposed amendments expand the Act’s applicability in some ways, while restricting it in others.  

CS/CS/SB328 expands the Act and further preempts local governments in the following ways:

1. A local government may not restrict floor area ratios (“FAR”) below the highest currently allowed FAR on land anywhere within the local government’s jurisdiction;
2. Allows local governments to grant additional bonuses, variances, conditional uses, or other special exceptions under their own regulations;
3. Creates a new ad valorem tax exemption benefit for “newly constructed” multifamily projects in areas of “critical state concern” with more than 10 income qualifying units, whereas more than 70 units are required to qualify in other areas; and
4. Grandfathers developments built under the Act as conforming uses after the 30-year affordability period expires and allows a reasonable time to cure violations of the affordability conditions before being treated as a nonconforming use.

Jan. 31, 2024 CS/CS/SB328.

            CS/CS/SB328 restricts the Act’s applicability in the following ways:

1. Specifies that prohibitions on density and FAR restrictions are based on “currently” allowed maximums in the local government where residential development is allowed “under the [local government’s] land development regulations”; and
2. Protects single-family residences by providing that the maximum height near a single-family home development of at least 25 contiguous homes by capping building height at 150% of the tallest building within ¼ mile or 3 stories, whichever is higher.

In addition to modifying the Act’s reach, the proposed amendments also seek to clarify potentially ambiguous provisions as it:

1. Provides that if a development in the jurisdiction already meets the Act’s requirements or the requirements of other bonus, variance, or other special exception for density or FAR as provided by the local government as an incentive for development, those are not the “currently allowed” maximums a developer is entitled to under the Act. In other words, if the maximum density in the local jurisdiction (without bonuses) is 200 units per acre, but density bonuses elsewhere in the local code allow up to 250 units per acre, application of the Act entitles the development to 200, not 250, units per acre;
2. Requires that the “at least 40 percent of the residential units in a proposed multifamily rental development” which must be affordable for at least 30 years, must be rental units;
3. Exempts proposed developments within ¼ mile of military installations from the requirement for administrative approval under the Act;
4. Requires that the local government publish its procedures for administrative approval on its website;
5. Reduces parking requirements based on proximity to transit stops according to several categories.  First, a local government “must consider” reducing parking requirements for developments within ¼ mile of a transit stop.  Next, the locality “must reduce” parking requirements by 20% if the development is within ½ mile of a “major” transportation hub (transit station, whether bus, train, or light rail, which is served by public transit with a mix of other transportation options) and the major hub accessible from pedestrian friendly infrastructure or has parking available within 600 feet of the proposed development which is available for use by residents of the proposed development. Finally, the local government “must eliminate” parking requirements if the development is mixed-use residential and located within a “transit-oriented development” area;
6. Requires determination of the value of a unit for property tax exemption to consider the proportionate share of the residential common areas and the land fairly attributable to that unit; and
7. Sets the date for exemption determinations retroactively to January 1, 2024.

Among the arguments by local governments opposing the Act’s incentives were concerns about the constitutionality of the Act’s reduction of local government’s authority to levy ad valorem taxes.  Under Section 18(b), Article VII of the Florida Constitution, a material negative impact on such taxes would require each chamber to approve the legislation by a two-thirds vote.  Art. VII, sec. 18(b), Fla. Const. The Senate Staff analysis has flagged this issue, noting that the two-thirds mandate does not apply to laws having an “insignificant impact,” which for “Fiscal Year 2024-2025 is forecast at approximately $2.3 million.”  Bill Analysis and Fiscal Impact Statement, CS/CS/SB328, 2024 Leg., Comm. Fiscal Policy, 2/2/24 (Fla. 2024).  Pending review by the Revenue Estimating Conference as to whether the reduction of required affordable housing units from 70 to 10 could trigger application of Article VII Section 18(b), the two-thirds vote issue could be an open question as the bills move through the legislature.

"Reprinted with permission from the [February 11, 2024 edition of the “Daily Business Review”] © 2024 ALM Global Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or asset-and-logo-licensing@alm.com."