Live Local Bills Seek To Strip More Power From Local Governments, Boost Tax Break

Two new bills were introduced in this year's legislative session that seek to amend the landmark Live Local Act legislation of 2023 and accelerate housing development across the state.

Rep. Vicki Lopez, a Republican who represents Key Biscayne and Brickell, introduced the bills this week when the Florida Legislature's regular session opened. One would allow developers to claim Live Local's tax exemption before they start construction, and another further limits municipalities' ability to impose restrictions on proposed affordable housing projects.

Anthony De Yurre, an attorney with Bilzin Sumberg who helped draft the two amendments, said they were needed so developers can leverage the law successfully and begin delivering workforce housing as the law intended.

“It's just that life and death issue right now,” De Yurre said. “We can move down the path of greenlighting all these deals, or they're just all going to get shelved and they're going to collect dust.”

The Live Local Act was last amended in May to expand tax breaks for income-restricted projects, reduce local zoning requirements and limit local governments’ control over the zoning process.

But developers argued the act and its amendments didn't go far enough to make projects work in Florida's costly environment, particularly the tax abatement.

The current tax exemptions that the Live Local Act provides give developers a 75% tax break for units at 120% area median income and 100% for those at 80% AMI, but the exemptions don’t take effect until after construction is complete.

The need to wait until completion has made lenders hesitant to commit to construction loans because they don't have assurances to underwrite the final cost of the building.

"It's still, now, there's opportunity for there to be an opt-out, and it's statewide, so it creates this lack of predictability for [lenders]," De Yurre said. "And who needs the most predictability in the world? It's a lender." 

HB 923 seeks to close that gap in the Live Local Act by allowing developers to secure tax exemptions as soon as they submit a site plan for approval. As long as developers follow the approved site plan and meet statutory requirements, they can secure their tax exemption rights from the submission date and pre-determination approval. 

This would guarantee future tax exemptions when leasing the units a few years down the line, De Yurre said, which is what lenders are looking for when providing financing.

“We had meetings with tons of lenders, and every time we try to work around it, that becomes the issue,” De Yurre said. “Then we talk about that option [HB 923], they go, ‘Aha, yes, that will solve the biggest problem we have.’”

Another of Lopez's proposals, HB 943, hones in on local government control, prohibiting more measures that counties and municipalities might take to exert influence on the development process.

The bill prevents local governments from restricting density, lot size, height or floor area ratio below the highest allowed levels for housing projects where at least 40% of the units are income restricted and prohibits additional regulations or costs on affordable housing projects. It also bars local governments from enacting new permit fees or requiring projects to have a mix of uses.

“This legislation removes unnecessary barriers to affordable housing development, streamlines approval processes, and modernizes land use policies to promote sustainable growth,” Lopez said in a statement.

The need for this bill arose from inconsistent interpretation of the Live Local Act across the state, De Yurre said.

While the law allowed developers to override local density and height restrictions, municipalities continued to impose obstacles, including extra fees, which hindered affordable housing development, De Yurre said.

“I don't want to say that municipalities are being antagonistic to the bill, because, for the most part, I can't say that,” De Yurre said. “But in their application, in many instances, and I don't want to say it's done on purpose, but in their application, they've neutered a lot of the potential impact of the bill.”

Both of Lopez's bills have companion legislation in the state senate. HB 923's counterpart, SB 1594, was advanced to discussion by the committees on community affairs, finance and rules on Thursday. The municipality restriction bill, HB 943's counterpart, SB 1730, was advanced to the finance and rules committees Friday morning.