Florida House passes amended Live Local Act with more tax breaks, incentives for developers
By Erik Bojnansky
Tampa Bay Business Journal
Published: Mar 4, 2024

An amended Live Local Act, which grants developers more incentives to build affordable housing, awaits Florida Gov. Ron DeSantis' signature.

The Florida House of Representatives voted to approve HB 1239 on Feb. 28 by a vote of 112 to 1. The bill is identical to SB 328 which passed the Florida Senate by a unanimous vote on Feb. 7.

Sponsored by State Sen. Alexis Calatayud (R-South Miami), the bill clarifies and adds provisions to the Live Local Act that was signed into law last year. Its purpose is to provide developers incentives to include affordable and workforce housing units in their projects. This includes granting developers the highest density a local jurisdiction allows if 40% of that building's units are reserved for households that earn 120% of an area's median household income. Those development rights must be approved administratively without a vote from local elected officials.

The new amendments will be enacted as soon as the governor signs the bill. The amended law's provisions include:

A 20% reduction of parking requirements for projects built a half-mile away from a train, bus, or light rail station.

A prohibition on cities and counties reducing floor area ratio below 150% of the highest density that local jurisdiction allows. (Floor area ratio, or FAR, is used in the zoning codes of some cities, such as Miami Beach, to calculate density.)

The allowance of developers to include market-rate condominiums in their projects Clarification that development bonuses that further enhances height and density are to be approved administratively

Enhances the Missing Middle Ad Valorem Tax Exemption for apartments that reserve workforce housing in their projects.

The additional incentives proscribed in the legislation will make it easier for developers to include more affordable and workforce housing units in their projects in a difficult lending environment, said Henry Torres, founder of Coral Gables-based apartment building developer Astor Cos. This is especially true in the city of Miami where impact fees are deferred for affordable and workforce housing builders.

"If we didn't have the incentives the city and Live Local Act gives us, we could not go with the buildings we are developing now," Torres said, referring to Miami projects such as Flagler Enclave and Douglas Enclave.

In addition, the Missing Middle Ad Valorem Tax Exemption will provide developers, and owners of recently completed apartment buildings, more of an incentive to charge below market rate rents for at least some of their units, said Anthony De Yurre, a partner at the Miami-based law firm of Bilzin Sumberg.

The Live Local Act provides a 75% property tax abatement if 71 or more of the units in a building that was completed or substantially renovated in the past five years is reserved for households making between 80% and 120% of an area's median household income. Units that are for households that make below 80% AMI can get a 100% property tax deferment.

At present, those tax breaks only apply to the units. But under the amended version, those tax breaks will also be applied to the land and common areas. In other words, if 70% of a project's units are reserved for workforce housing, then 70% of the entire property is entitled to the tax abatements.

That provisions will provide plenty of encouragement for landlords to reduce their own rents below market value and cap rent hikes at a reasonable level.

"Every dollar you can save on taxes is worth 15 times more in terms of leverage to borrow money," De Yurre said.

In addition, the amended law will likely encourage the development of more transit-oriented projects near transit hubs as well as mixed apartment-condo projects in waterfront areas, De Yurre said.

"It's going to allow for more mixed income market rate projects now that for sale condos are allowed," De Yurre said.