Florida’s New Housing Law Encourages Housing Development Outside Urban Cores

The Live Local Act, which takes effect July 1, could lead to large-scale affordable and workforce housing development well beyond downtowns

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One of the least controversial bills to come out of Florida’s legislative session this year was the Live Local Act, addressing the state’s stratospheric housing crisis. 

The act funds long-running affordable housing programs, closes a loophole that previously allowed Florida lawmakers to siphon money meant for affordable housing, and determines new limits on what local agencies can do in regard to housing policy, including zoning and rent control.

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One measure in particular has garnered the attention and support of real estate developers. The provision overrides local zoning laws to allow housing to be built on any commercial lot if enough of the units are dedicated to affordable or workforce housing. A developer can by right use the maximum zoning allowed within a one-mile radius of the site, thus eliminating a lengthy and costly rezoning process. 

The measure, which goes into effect July 1, opens the door for denser development on cheaper land — potentially a welcome boon to developers and affordable housing advocates alike. Of course, it also means that the one-story CVS on the corner can by right be turned into a 15-story apartment complex if that is allowed anywhere within a mile of that site. 

“The bill as it’s written today has the potential to really change the landscape and the way communities and cities are built,” said Alfredo Riascos, owner of investment sales brokerage Gridline Properties, who’s seen a wave of interest from developers since Gov. Ron DeSantis signed the bill into law in late March.

“The Live Local Act has considerably increased our pipeline,” Riascos said in early June. “Early onset, you see a fast dash of investors trying to take advantage of the early opportunities because eventually it gets priced in.”

The main thrust of the Live Local Act measure is called the 40 percent rule. If at least 40 percent of units in a proposed project are affordable to households making a maximum of 120 percent of the area median income for at least 30 years, local officials must authorize the plans on any site zoned commercial, industrial or mixed-use — up to the maximum density and height allowed within a one-mile radius — without public hearings, a rezoning process, or land use change requirements.

To be eligible for this shortcut, the project must be at least 65 percent residential in square footage, but otherwise restrictions are scarce: the market-rate units can be rental or condo, and the affordable and market-rate units can be segregated from each other.

The sites that are getting the most attention from developers are near high-density areas that are highly desirable, but have zoning restrictions that make multifamily development difficult. “It has benefited owners of development sites that are not on Main-and-Main corridors, that are more on the outskirts, and allows developers to exploit those properties with more density and better height restrictions,” said Risascos. 

“Think about our county, the way all communities have been developed; they’re suburban by nature with a downtown,” said Alan Hooper, a developer at Urban Street Development, which is building a project in Fort Lauderdale’s FAT Village in Broward County. “Instead of piling affordable housing in a downtown core, shouldn’t affordable be expanded out? That might actually be closer to some of these folks  — their circle, their universe, where they live and work.”

It’s an issue that’s personal for Hooper and his partner Tim Petrillo, who also own a string of restaurants, primarily in Downtown Fort Lauderdale, which employ over 100 employees. 

“We would love to be able to build a project where our employees could live affordably,” Hooper said. “A lot of our stuff is downtown, so it’s not affordable.” 

One company has already begun testing the program. Resia filed plans to build 948 units of workforce housing, capped at 120 percent of the area median income, on the site of the Palmetto Metrorail station in Medley, Fla. The site is owned by Miami-Dade County and zoned light industrial, and Resia plans to sidestep the regular approval process that would require public input. 

“As part of this Letter of Intent, the Applicant seeks Administrative Site Plan Review approval of its Project, pursuant to the recently enacted Live Local Act, which permits the Project to be approved administratively without going to public hearing,” the developer wrote in its application.

It’s developments like these that could potentially change the range of housing available in Florida and shift the focus from the glossy waterfront high-rises.

The law levels the playing field for affordable developers, said Jordan Richter of Lincoln Avenue Capital, which specializes in affordable housing development and preservation. “It’s very hard in the current environment, and how in demand luxury multifamily is, to compete with those projects on land costs and other things. There will be more options to trade affordability to find new sites, which is great, and hopefully will lead to new production.”

“The focus over the last 10 years has been luxury,” Brian Sidman, founder and principal of real estate private equity firm BAS Holdings, agreed, but the zoning change alone isn’t necessarily enough to make affordable projects pencil out. Developers often need local cooperation and multiple subsidies, such as in Resia’s case, where the site is owned by the county, Sidman said. “The state legislative component is terrific, but you still need to be able to take that and parlay to working with local cities.”

Still, he said it’s encouraging to see the state move on this issue. “I have a relationship with Ron and I’ve always stated my humble opinion that we need to address this,” Sidman said, referencing DeSantis. “Every chance I’ve had an opportunity to sit with the governor, I’ve said that we need the state to step in.”

The state certainly has stepped in — or trampled its way right through the china shop, you might say. 

“Once this bill takes effect, you’re going to see a lot of opinions and some legal pushback,” said Riascos, as there remains a host of unanswered questions about how exactly the law will be applied, particularly where it contradicts local regulations. “Urban planners have put in tremendous time and effort to create zoning that’s beneficial for all stakeholders. And here you’re putting in this powerful overlay that might supersede years worth of zoning planning.”

The good news is that the initial interest is directed at areas that are more likely to be zoned industrial than in truly single-family suburban neighborhoods, such as areas west of Miami’s central business district, across Interstate 95 (in Allapattah and Hialeah, for example), where large industrial sites are occupied by towing companies, trucking lots and similar tenants. 

“Given their location, and not being close to single-family residential, those sites are going to be first in line for this program,” Riascos said. “And if the majority of the interest is in neighborhoods like that, it’s going to create benefit for all.”

Another open question is to what degree the law will actually help the affordability crisis. As written, it appears fairly light on affordable housing for low-income households, since eligibility is restricted only up to 120 percent of AMI. In Miami-Dade, low income is generally capped at 80 percent of AMI, which stood at $82,550 for a family of four in 2023. Meanwhile, the actual median income was $57,815, according to the latest Census data. 

But Richter says that’s a feature, not a bug, of the Live Local Act. Its strength is that it supports a wider range of housing than those typically subsidized by the government. “The affordability spectrum is one really encouraging part of the bill,” Richter said. “There are incentives for ‘big A’ affordable to workforce to ‘small a’ affordable housing.” 

Chava Gourarie can be reached at cgourarie@commercialobserver.com.