April 19, 2023
As a digital multifamily brokerage firm, Offerd is closely monitoring Florida's affordable housing crisis. The state's population explosion, fueled in part by migration during the COVID-19 pandemic, has exacerbated the housing shortage. A new bill, signed into law last week by Governor Ron DeSantis, seeks to alleviate this critical issue.
The "Live Local Act" aims to increase the supply of affordable housing and restore the state's Sadowski Housing Trust Fund, originally established in 1992. According to a Green Street analysis, the fund's capital has been diverted for other purposes over the years. The Act represents the largest investment in housing efforts in Florida's history, injecting $711 million into various programs.
Key features of the Live Local Act include:
· Property tax discounts and exemptions for affordable units with rents at least 10% below market rate
· Tax credits for donations toward community development and low-income housing projects
· Low-cost loans for affordable housing developers
· Down payment assistance and focused support for military communities
However, the bill also introduces changes that may not be as affordable-housing friendly. It eliminates local municipalities' ability to permit universal rent control throughout Florida, potentially driving up monthly leases when current residents vacate their rental units. Green Street suggests that landlords will benefit as rents rise across many markets in the state.
The bill also allows developers to bypass zoning changes for multifamily and mixed-use developments that allocate at least 40% of units to affordable housing and serve incomes up to 120% of the area median income(AMI). This approach has gained popularity in other states and municipalities as a means to increase the affordable housing pool before approving new developments.
Overall, the Live Local Act reduces supply barriers and incentivizes developers to build affordable housing. However, Green Street notes that soaring insurance costs for development underwriting and challenging financing may limit starts in the immediate future.