Florida lawmakers will be called again this year and will be called to navigate solutions to the state’s housing affordability crisis that balances the intentions of groundbreaking live local acts with city and county needs after last year’s amendments to undermine the housing incentives of the law.
Florida approved the Live Local Act in 2023 in response to the record-breaking rent escalation of the community’s pandemic, with multi-family developers taking advantage of zoning flexibility and taxation systems to leverage legislative codified tax systems.
However, last year, legislature changed the law to allow cities and counties to deny property tax exemptions on “middle-middle” homes. And last year, only a handful of apartments qualify for exemptions were made by all municipalities in central Florida that could opt out of the program.
Cities and counties could be a major hit to live local affordable housing projects
Developers who specialize in buildings with achievable workforce, such as Alliance Residential and Hill Point, say the rugs have been pulled from under them. Both have lobbyed Tallahassee lawmakers and provided some relief. Meanwhile, cities and counties have their own complaints that local living will reduce power and reduce revenues than development.
Bobby Anderson, managing director of Alliance Residential, said one of the biggest issues is that developers are willing to undertake missing middle projects without exemptions, making developers unable to obtain funding to build new labor housing with Live Local mandated rent.
“Right now, live, my hometown is broken,” Anderson said. “I think it’s a good-intention bill, and I know there are a lot of people who don’t like it. But the reality is, we have a housing crisis and we need to come up with ways to deal with it.”
Eligibility for tax exemptions changes year by year based on whether a county or region is deemed to have sufficient housing units for a median income bracket population of 80-10%.
Last year, the surplus in the Central Florida area (Orange, Osceola, Lake and Seminole counties) was 799 units, according to the University of Florida Singburg Housing Research Center. This year, so many new apartments were completed in 2024, the number of surplus units has reached a maximum of 5,274.
At the same time, availability numbers in Polk County have fallen to a deficit of 2,636 this year, from last year’s surplus. This means projects that Polk is not eligible to claim the 2023 tax credits that it can currently be. Landlords must agree to keep their rent below the market rate for 30 years.
Hillpoint recently completed the new workforce housing communities in Lakeland and Davenport, and managing partner Stephen Kampici said he intends to advocate for the 2025 exemption.
“So, if it’s still available, I hope it will happen, we’ll submit and limit future units,” he said.
Anderson said his company was hampered by other technologies in the Live Local Act. He has projects in Osceola and Orange counties that he joined the program before the county opted out of the missing middle break, so he can maintain his tax-free duty, but he cannot sell his assets. He had a buyer with a contract to buy a labor-powered home in St. Cloud, but the Osceola County real estate appraiser killed the deal because he said the exemption could not be transferred to a new owner.
“I haven’t put it in the program anymore. There’s no profit,” he said. “I got it – we save taxes on it, and that’s a fair amount. But compared to a $80 million deal, it’s just a small portion of the money about what the incentive is and no one is giving us the advantage of entering things into the program.”
Preparing Hill Point for Construction in Live Local Apartments in Mineola
Some of these issues can be resolved at the 2025 Legislative Conference through HB 923/SB1594. The bill, introduced by Rep. Vicki Lopez, R-Miami and Senators R-Carla, proposes multiple changes to the Live Local Act, including:
Because you can assign tax exemptions to the property rather than the owner, you require that the municipality have a surplus of middle units available for three years in a row, then opt out of the tax exemption so that the developer can lock the exemptions with site plan approvals rather than completion/lease-up. If a municipality changes the code to limit a live local project, it allows the developer or property owner to sue damages or injunctive relief
Campisi said it is moving forward with new projects, including Pointe Grand Minneola, despite headwinds affecting multi-family development. It was Lake County’s first apartment community and secured development permits except for the Rezone. This is a process that I avoided for local life. Hillpoint has a separate Lake County property that has been contracted this month, smashing through the ground at Mineola.
Campisi said he is confident that by the time the project is constructed and occupied, new multi-family construction has begun, and the Orlando area will return to the negative column due to the lack of middle housing. “Our estimates are that Lake County, and many of these Florida counties, will return to places in 2027 and 2028 where they can’t opt out with tax-free due to a lack of achievable housing units.
Any tips on developing Central Florida? Please contact me at lkinsler@growthspotter.com or (407) 420-6261. Follow GrowthSpotter on Facebook and LinkedIn.
