Landowners and developers with projects with affordable and workforce housing components should be aware of new legislation filed related to the Live Local Act.
Stearns Weaver Miller has been closely monitoring the implementation of the Live Local Act from the 2023 Florida Legislative Session (Senate Bill 102). On January 4, 2024, Representative Vicki Lopez and Senator Alexis Calatayud filed House Bill 1239 and Senate Bill 328, respectively. The bills amend several key components of the Live Local Act, including changes to both the land use and “Missing Middle” ad valorem property tax portions of the Live Local Act, as well as funding for the Florida Hometown Hero program.
Below is a summary of the important proposed changes:
Land Use Administrative Approval Process for Projects Where 40 Percent of the Multifamily Units Provide Affordable or Workforce Housing
- Removal of Industrial Property from Qualification: Property that is zoned industrial no longer qualifies for administrative approval of a qualifying affordable housing project. Previously, a local government must allow multifamily or mixed-use affordable housing projects on property that was zoned commercial, industrial or mixed use.
- Because industrial property no longer qualifies for the administrative approval process, the carve out exempting industrially-zoned recreational and commercial working waterfronts, as defined in section 342.201(2)(b), from the administrative approval process was deleted.
- Addition of Floor Area Ratio and Clarifications on the Highest Currently Allowed Density/Floor Area Ratio: Local governments may not restrict the density or floor area ratio of a proposed affordable housing project below the highest currently allowed density or floor area ratio allowed under the local government’s land development regulations if the development otherwise qualifies for the administrative approval process. Previously, local governments could not restrict the density of a qualifying proposed affordable housing project below the highest currently allowed in the jurisdiction, but floor area ratio was not expressly included.
- The highest currently allowed density or floor area ratio does not include the density or floor area ratio of a development that received an administrative approval under the Live Local Act, or that received a bonus, variance, or special exception for density or floor area ratio provided as an incentive for development. This caveat did not previously exist in the Live Local Act.
- Changes to the Maximum Height: Local governments may not restrict the height of a proposed development below the highest currently allowed height for a commercial or residential building within ¼ mile of the proposed development or 3 stories, whichever is higher. Previously, the height could not be restricted below the highest currently allowed height for a commercial or residential building within one mile of the proposed development or 3 stories, whichever is higher.
- In addition, if the height of each building on the property adjacent to the proposed development is 3 stories or less, the local government may restrict the height of the proposed development to 125 percent of the tallest building on property adjacent to the proposed development or 3 stories, whichever is higher. Senate Bill 328 also clarifies that the currently allowed height does not include the height of any development that received an administrative approval under the Live Local Act, or that received a bonus, variance, or special exception for density or floor area ratio provided as an incentive for development. This caveat did not previously exist in the Live Local Act.
- Military Installations: Local governments may not administratively approve a proposed development within ¼ mile of a military installation as defined in section 163.3175(2), Florida Statutes. This carve out did not previously exist in the Live Local Act.
- Mixed-Use Requirement (Counties): For counties, if the proposed development is zoned for commercial use and is within the boundaries of a multicounty independent special district created to provide municipal services and is not authorized to levy ad valorem taxes, and less than 20 percent of the land area within such district is designated for commercial use, the county must authorize the proposed development only if it is mixed-use residential. Previously, the proposed development had to be zoned for commercial or industrial use.
- Mixed-Use Requirement (Cities): For municipalities, if the municipality designates less than 20 percent of its land area within its jurisdiction for commercial use, then a proposed multifamily development must be mixed-use residential. Previously, the municipality had to designate less than 20 percent of its land area for commercial and industrial use to require the proposed developments to be mixed use residential.
- Airport-Impacted Areas: The administrative approval process does not apply to airport-impacted areas as provided in section 333.03, Florida Statutes. Section 333.03 is amended to clarify that sections 125.01055(7) (administrative approval process for counties) and 166.04151(7) (administrative approval process for municipalities) do not apply to proposed developments within 10,000 feet of the nearest point of any existing airport runway or planned airport runway, property within any airport noise zone, or property that exceeds the maximum height restrictions identified by a local government’s airport zoning regulations. This carve out for projects near airports did not exist in the Live Local Act.
- Conforming Use: Developments authorized under this administrative approval process must be treated as a conforming use even after the administrative approval process expires in 2033 and the development’s 30-year affordability period, notwithstanding the local government’s comprehensive plan, future land use designation, or zoning. This provision did not exist in the Live Local Act.
- Violations of Affordability Requirement: If a development violates the 30-year affordability period, the development must be allowed reasonable time to cure the violation. If the violation is not cured within a reasonable time, the development must be treated as a nonconforming use. This provision did not exist in the Live Local Act.
Missing Middle Ad Valorem Property Tax Program
- Addition of Substantial Rehabilitation Projects: The definition of “newly constructed” was amended to include projects that were substantially rehabilitated, which is defined as the repair or restoration of a unit which increases the market value of such unit by at least 40 percent. If the units for which the property owner seeks an exemption were substantially rehabilitated but have not been certified previously by the Florida Housing Finance Corporation (“FHFC”), a market value analysis is required to demonstrate that the units meet the definition of substantially rehabilitation. Upon receipt of the first certification notice, a property owner is not required to submit a new market value analysis when requesting future certification notices for substantially rehabilitated projects. Previously, substantially rehabilitated projects were not included as a qualifying project.
- The market value analysis must identify the change in the market value of the unit attributable to the rehabilitation of the unit, expressed as a percentage of the market value before the rehabilitation, for each unit that has undergone rehabilitation. Only a certified general appraiser can prepare this market value analysis, and the certified general appraiser must be independent of the property owner requesting the analysis. The appraiser must use its professional standards and comparable property within the same geographic area and of the same type for his/her analysis.
- Time Period to First Apply: The definition of “newly constructed” was amended to require the applicant to first submit a certification notice to the FHFC within 5 years of when the improvement was substantially completed or improved. Previously, the applicant had to apply for the certification notice or exemption application within 5 years after the improvement was substantially completed.
- Area of Critical State Concern: Qualifying projects must either provide more than 71 units dedicated to housing natural persons or families meeting the 80 percent or 120 percent of area median income limitations OR be within an area of critical state concern, as defined in section 380.0552, Florida Statutes, or chapter 28-36, Florida Administrative Code, which contains more than 10 units dedicated to housing natural persons or families meeting the 80 percent or 120 percent of area median income limitations. The qualification of 10-unit projects in an area of critical state concern did not previously exist in the Live Local Act.
- Vacant Units: If a unit in a previous year received the Missing Middle exemption and is now vacant on January 1, the vacant unit is still eligible provided the unit is restricted to providing affordable housing that otherwise meets the requirements of the Missing Middle program and a reasonable effort is made to lease the unit to eligible persons or families. The previous language allowed vacant units that “qualified for”, but not necessarily “received”, the exemption to still qualify.
- Clarification of “Qualified Property” to Exempt the Assessed Value of the Units: The property appraiser shall exempt 75 percent of the assessed value of the units in multifamily projects that meet the requirements of the Missing Middle exemption if the annual household income is greater than 80 percent but no more than 120 percent of the median annual adjusted gross income for households within the metropolitan statistical area or, if not within a metropolitan statistical area, within the county in which the person or family resides. The property appraiser shall exempt 100 percent of the assessed value of the units in multifamily projects that meet the requirements of the Missing Middle exemption if the annual household income does not exceed 80 percent of the median annual adjusted gross income for households within the metropolitan statistical area or, if not within a metropolitan statistical area, within the county in which the person or family resides. Under the previous version, the Live Local Act used the term “qualified property” instead of “units.”
- Valuation of Residential Common Areas: When determining the value of a unit, the property appraiser must include in the valuation the proportionate share of the residential common areas, including the land, fairly attributable to such unit. This provision did not previously exist in the Live Local Act.
- Property Appraiser Review: The property appraiser must review the application and determine if the applicant meets all of the requirements for the exemption. The property appraiser may request additional information as necessary to make this determination and they may grant the exemption only for property for which FHFC has issued a certification notice and the property appraiser has determined the property is entitled to the exemption. This clarification of the property appraiser’s role existed in part, but this provision adds the allowance for the property appraiser to ask for additional information as necessary.
- Clarification of FHFC’s role: FHFC is tasked with confirming that the project meets the income and rent limit requirements and has at least 71 units (or 10 units if in an area of critical state concern) in order to issue the certification notice. Issuance of a certification notice does not constitute a grant of the exemption. Previously, this limitation on FHFC’s role did not exist.
- Remedial Effect: these amendments to the Missing Middle program are intended to be remedial and clarifying in nature and apply retroactively to January 1, 2024.
Florida Hometown Hero Program
- New Funding: For 2024-2025, $100 million in nonrecurring funds is appropriated to the State Housing Trust Fund for use by FHFC to implement the Florida Hometown Hero Program established in section 420.5096, Florida Statutes. These funds are allocated from the funds received and deposited into the General Revenue Fund from the state’s allocation of the federal Coronavirus State Fiscal Recovery Fund created under the American Rescue Plan Act of 2021.
Senate Bill 328 will be heard by the Senate Community Affairs Committee, its first committee of reference, on Tuesday, January 9. House Bill 1239 has not yet been referred to committee.
Stearns Weaver Miller is actively monitoring all aspects of the Live Local Act, including the funding opportunities, ad valorem exemption programs, and land use preemption implementation across the State of Florida.
If you should have any questions on this new legislation, please contact us.
You can also view our previous comprehensive analysis of the legislation here.