Amendments to a state law that grants developers extra density and tax breaks in exchange for affordable apartments was signed into law by Gov. Ron DeSantis.
DeSantis signed SB 328 on May 16, according to a memo from the governor’s office. The law amends last year’s Live Local Act, which grants extra density and tax breaks for developers who include affordable housing units in their projects.
“The amended law essentially doubles tax breaks for developers who incorporate at least 71 affordable or workforce housing units in their projects,” said Anthony De Yurre, a land use attorney affiliated with Miami-based Bilzin Sumberg who lobbied for the additional changes.
It also mandates additional parking breaks for projects built near major transit hubs.
“I think you will see a lot of projects being submitted in the city of Miami and around transit oriented projects in Miami-Dade County,” De Yurre said. “We want to do infill projects that are close to transit and close to employment opportunities.”
The original Live Local Act (LLA) enabled developers to build to the highest density a city allows if 40% of their projects’ units are reserved for affordable housing. The law stated that a unit is affordable if its for a household that is up to 120% of an area’s median household income. In addition, the zoning enhancements are to be granted administratively and not via a public hearing.
The amended law, passed by the state legislature in late February, added clarifications, extra incentives, and some protection to the character of single-family neighborhoods related to single-family neighborhoods related to LLA projects. They include:
- A 20% reduction of parking requirements for projects built a half-mile away from a train, bus, or light rail statin.
- The complete removal of parking requirements for projects built in places explicitly zoned for transit-oriented development.
- A prohibition on cities and counties reducing floor area ratio below 150% of the highest density that a local jurisdiction allows.
- Limits on height enhancements for single-family zoned land with at least 25 contiguous houses to 150% of the tallest adjacent building or three stories. The original LLA grants the greatest zoned height within a mile of a qualified project’s site.
- A ban on LLA benefits for land in airport noise zones and airport flight paths.
- The allowance of developers to include market-rate condominiums in a LLA project.
- A clarification that development bonuses that further enhances height are to be granted administratively.
- An enhancement for the Missing Middle Ad Valorem Tax Exemption.
“The Missing Middle provision provides the greatest incentive for developers to provide affordable housing,” said De Yurre.
Under the original law, the 75% to 100% property tax abatement only applied to LLA units. Now it’s proportional to a building’s common areas and land. In other words, if 70% of a building’s units are LLA units, 70% of that project’s property can receive the tax abatement.
Under the LLA, the 75% tax abatement applies to units reserved for households making between 80% and 120% AMI. The 100% tax abatement is for units that make below 80% AMI. The tax breaks don’t just qualify for brand new apartments. Projects that were built within the past five years, or substantially renovated in the past five years, are entitled to LLA’s tax breaks.
“The common area provisions were needed in order to enable developers to include apartments that are below the monthly market rate average,” said De Yurre.
“The property tax abatements make it financially possible to knock off $300 a month on a project’s units,” Shoma Group CEO Masoud Shojaee said during a recent development conference.f
Since the pandemic, housing prices and rents throughout Florida increased dramatically as high-income households relocated to the Sunshine State in order to avoid state income taxes. The state law is an attempt to address the affordable housing crisis that threatened to displace working-class and middle-class families as well as essential workers such as police, firefighters, nurses, and teachers.
Source: SFBJ
