Florida’s new legislation, the Live Local Act, has the potential to be a game-changer for affordable and workforce housing development in the state. The act sets aside over $700 million in funding, provides tax breaks, and offers zoning-related incentives for affordable and workforce housing development. This move is expected to contribute to a new boom in housing development, from entirely affordable buildings to mixed-income towers on commercial sites that developers are now looking to purchase.
The Live Local Act aims to help fill financing gaps, making more developments economically feasible. However, combining it with incentives on the local level is crucial to achieve success. These incentives, in conjunction with working cities and municipalities, are the way to fill a void and a gap in the housing market.
Brian Sidman of Miami Beach-based Redwood Dev Co. said that the problem isn’t going to be solved by developers buying private land due to the high cost of private land. Still, he called the legislation “a great start” and applauded Governor Ron DeSantis and the Florida Legislature.
Redwood is analyzing the State Apartment Incentive Loan (SAIL) program to see which of its projects could secure low-interest loans for workforce housing. Redwood aims to build more than 5,000 affordable and/or workforce units over the next five to seven years.
The new legislation sets aside $259 million in SAIL funds and promises $252 million in State Housing Initiatives Program (SHIP) funding to incentivize local governments to partner with developers preserving or building new housing.
The property tax breaks, which existed already for senior affordable housing, will provide a stimulus for affordable and workforce housing that meet specific criteria. Developers could count on a project generating more net operating income if they don’t have to pay property taxes (beginning in 2024), which means they can borrow more debt. Ultimately, that means they could develop more units.
The Live Local Act will put $100 million in non-recurring funds into a competitive loan program that developers could tap to cover inflation-related cost increases for Florida Housing and Finance Corporation-approved multifamily developments that haven’t broken ground yet. It will also provide up to a $5,000 sales tax refund for building materials used to construct affordable housing units funded by FHFC.
The law will preempt local governments’ zoning, density, and height requirements for affordable housing in areas zoned for commercial or mixed-use development. That means counties will be banned from restricting the density of a proposed development below the highest allowed density on any property in an unincorporated area where residential development is allowed.Local governments will also not be able to restrict height below what’s allowed within one mile of the proposed building.
Local governments also must allow multifamily or mixed-use residential developments that set aside 40 percent or more of their units for at least 30 years to affordable housing.
The zoning incentives are significant, but attorneys and developers noted that as buildings get taller, they become more expensive to construct. Developers are already looking at sites to build mixed-income projects, with affordable or workforce housing on the lower floors, and market-rate and luxury above it.
In conclusion, the Live Local Act is a potential game-changer for affordable and workforce housing development in Florida. The new legislation aims to help fill financing gaps, provide tax breaks, and offer zoning-related incentives. However, combining it with incentives on the local level is crucial to achieve success. This move is expected to contribute to a new boom in housing development in the state, from entirely affordable buildings to mixed-income towers on commercial sites that developers are now looking to purchase.