Background
The Florida Legislature recently passed a revised affordable housing law that significantly impacts the opportunities available to developers. The law, which was signed by Governor Ron DeSantis in June 2023, aims to increase the supply of affordable housing in the state, while also providing financial incentives to developers.
Key Provisions
The revised law includes several key provisions that affect developers:
Increased Impact Fees
The law increases impact fees on new residential development, which are fees levied by local governments to cover the costs of infrastructure and services associated with new growth. These fees can add a significant amount to the cost of development, making it more difficult for developers to build affordable housing.
Inclusionary Zoning Requirements
The law requires cities and counties with populations over 50,000 to adopt inclusionary zoning ordinances. These ordinances mandate that a certain percentage of new residential units be designated as affordable housing. This requirement can reduce the profitability of development projects, particularly in high-cost areas.
Density Bonuses
The law allows local governments to grant density bonuses to developers who build affordable housing units. These bonuses allow developers to build more units on their property than they would otherwise be permitted to, which can increase the profitability of their projects.
Affordable Housing Tax Exemptions
The law provides tax exemptions for certain types of affordable housing development. These exemptions can reduce the cost of development and make it more feasible for developers to build affordable units.
Impact on Developers
The revised affordable housing law will have a significant impact on developers in Florida. The increased impact fees and inclusionary zoning requirements will make it more difficult for developers to build affordable housing, particularly in high-cost areas. However, the density bonuses and tax exemptions may help to offset these increased costs.
Developers will need to carefully consider the provisions of the new law when planning their projects. They should work closely with local governments to understand the applicable requirements and explore opportunities for incentives.
Conclusion
The Florida Legislature’s revised affordable housing law is a complex and far-reaching piece of legislation that will have a significant impact on developers in the state. Developers should carefully consider the provisions of the new law when planning their projects and work closely with local governments to understand the applicable requirements.
Kind regards
M. Davis
