DeBary City Manager Carmen Rosamonda has been surprised by how much the relatively new legislation has been used as a stick against his community and others, even if he supports the goals of Florida’s Live Local Act.
“A lot of developers are using this as a weapon and a threat right now; in the last three or four months, every developer I’ve met has threatened the city with it.”
Rosamonda’s description of weaponization relates to the Live Local Act’s local zoning preemption component, which was intended to help address the state’s affordable housing crisis and garner bipartisan support. Preemption wording mandates that counties and cities accept multifamily buildings on land zoned commercial or industrial, provided that at least 40% of the proposed units are designated as affordable housing.
To gain some clout in such a situation, a developer may make references to its capacity to erect residential units on a piece of land with commercial or industrial zoning, particularly if local officials would prefer not to have residential units constructed there.
This is noteworthy because, while the new law has been widely welcomed and met with enthusiasm, there have been unintended consequences.
“Live Local Act is like throwing a hand grenade on the state of Florida,” said Chuck Whittall, president of Orlando-based Unicorp National Developments Inc.
Currently, Whittall is putting forth a $30 million renovation proposal on Dr. Phillips’ Restaurant Row, which is an outparcel of the Marketplace at Dr. Phillips shopping mall, which is owned by Kimco Realty Corp. of New York. Whittall stated he expects the group will use Live Local Act to have its plans approved there. Kimco intends to renovate a portion of the land with apartments.
Still, other industry professionals see the new law as nothing but positive.
The measure, according to Longwood-based Southern Realty Enterprises‘ veteran land broker Brad Parker, is “the best thing the state has done in 20 years.”
Parker suggested that the Orlando housing market is lacking 70,000 units of housing, and that the Live Local Act might be strengthened in the upcoming legislative session to encourage the development of new homes even more.
“They’re going to have to get the cities and counties out of their comfort zone.”
Preemption can save developers at least a month during the entitlement process. There are also tax incentives included in law. For instance, qualifying affordable apartment units that are rented to tenants under a certain threshold of the local median income will be eligible for tax exemptions of 75% and 100% per unit, based on where the tenant falls on the percentile.
There are, however, concerns about implementation — including overriding zoning maps for cities that, for instance, would normally not allow an apartment community to be built in an industrial corridor.
“There’s a compatibility issue,” said Angel de la Portilla, president of Orlando-based Central Florida Strategies, whose clients include private sector developers as well as local governments. “These are areas where you have warehouses and large tractor-trailers operating in the early morning hours. Essentially, you’re going to have school buses competing with tractor-trailers for limited capacity on roads.”
De la Portilla further explained that one of the benefits for city governments of having clusters of industrial properties, for instance, is that such areas tend to require less infrastructure and service needs, which affects the bottom line for municipal budgets.
“If you build apartments, it requires additional police and fire department services in those areas, and you would need additional capacity for roads and schools. For an industrial area without multifamily, you just need roads to get trucks in and out of the warehouses, as those areas are not as costly to service,” he added.
DeBary officials say the budget implications for cities and counties are further compounded by the tax incentives of Live Local Act.
As an example, Rosamonda told OBJ an already-approved industrial project in the Volusia County suburb is in jeopardy as its developer weighs not building the project and instead selling it to a multifamily developer. The potential pivot on the property is concerning for several reasons, he said.
“We went from an [industrial and commercial] development worth maybe $50 million to our tax base, which would provide 300 to 500 jobs, to an apartment complex.”
Nearly all of those interviewed suggested there could, and perhaps should, be tweaks to the law during the next legislative session.