Florida Law Keeps Developers From Having To Subsidize Affordable Housing
Affordable housing has long been a crisis issue in Florida, which leads the nation in housing unaffordability. One study by Apartment List shows that 56.5% of renters spend 30% or more of their income on housing.
The state fund for affordable housing gets raided by the state legislature year after year, its monies diverted to other issues. So, throughout the state, local governments have enacted laws that require developers to kick in money or units for affordable housing in exchange for getting their own projects approved. Developers have balked at having to shoulder this expense.
So-called "linkage fees" come into play when governments require a developer seeking project approvals to also provide a specific number of affordable housing units or to contribute to a housing fund.
Jupiter, Winter Park and Coconut Creek have all implemented linkage fees, according to the Florida Housing Coalition.
"Commercial and high-end market rate residential development increase the need for employment of low wage workers who will be in need of affordable housing within the community," the nonprofit states on its website.
Citing a Florida House staff analysis, commercial real estate industry group NAIOP said that linkage fees in the state range from $0.37 to $2.42 per SF for new developments.
Last year, the state legislature passed HB7103, which requires any such requirement be cost-neutral for the developer. HB 1339, which passed this year and went into effect July 1, is an adjunct bill that goes a step further by specifying that linkage fees for affordable housing are also subject to the same cost offsets.
The bill requires local governments that levy linkage fees on new development projects to fully offset those costs. A municipality can make it cost-neutral for a developer by allowing it a density bonus or more floor space, or reduce or waive impact fees.
NAIOP Florida President Darcie Lunsford, executive vice president at Butters Realty & Management, said in a statement that the new law clarifies any potential ambiguity.
“With more local governments looking to shift costs for affordable housing initiatives onto commercial projects, this became a priority for NAIOP chapters across the state, and a bona fide deal-killing threat for development," she said. “Considering that commercial real estate is nearly a $26B industry in Florida, supporting 227,512 jobs, it was imperative that we protect its viability, particularly in this fragile economic climate."