Podcast - Florida Live Local Act: Expanded Definitions Create New Opportunities

Time Stamps: 

0:32 – Introduction

0:58 – New definitions in the Live Local Act

4:02 – Original infrastructure the original 2023 Live Local Act bill provides today

5:29 – Mixed use programs and what they mean

6:37 – Tax benefits of the Live Local Act

10:37 – Updates on traffic and parking requirements with the Live Local Act

12:05 – YIGBY (Yes in God’s Backyard) and what it means

14:27 – Personal Opinions on changes with the Live Local Act

16:50 – Employer sponsored housing for Health Care Employees under Live Local

17:36 – What developers can do to leverage the Live Local Act

Pedro Gassant: I'm Pedro Gassant of the law firm of Holland & Knight, and I'm a partner here in the Real Estate group with a specialty in land use and zoning, where we have over 2,200 attorneys here at the law firm of Holland & Knight. We're an international law firm. And I'm joined by my colleague, Mischaël Cetoute.

Misch Cetoute: Hi, my name is Mischaël Cetoute. I'm an associate here at Holland & Knight in the land use and zoning group. And today we're talking about Florida's Live Local Act, specifically the 2025 updates to the act. So jumping right in, I want to talk about these new definitions that we've seen added to the Live Local Act, specifically around commercial, industrial and mixed use. How do they work and function? And what do you see as the impact on a property?

Pedro Gassant: So one of the most salient aspects of the changes to Live Local is the fact that there are now definitions for commercial, mixed use and industrial. And what that means is that the zoning title that governs a particular property no longer governs. And one of these examples I like to use is that you can have something that's zoned agriculture, but because of the uses that are permitted within the agricultural zoning, if it meets the definition under Live Local, you can still do the Live Local program.

Misch Cetoute: All right. Let's pause there and unpack a little bit. Because I think what you said might blow some minds. So you're saying that a site might be zoned agriculture, but because of these new definitions, it might be eligible for a Live Local where you could put a mixed-use or a residential project, assuming, you know, it's affordable. So how does that work?

Pedro Gassant: So let's take a step back. So the Live Local program allows you to say, I want the maximum density that's permitted within a city or a county to be permitted on my property without going to public hearing and to get it approved administratively. The recent definitional changes for Live Local essentially say that there are certain definitions that allow you apply Live Local, irrespective of what the zoning label is for that site. So let's say you have a 10-acre piece of property. That property is zoned agriculture. And you would think, OK, it only permits fruits and vegetables and growing of those types of plants. Under Live Local, if it permits any of the commercial uses that are permitted under the definition, you're permitted to utilize Live Local, which means you could build the highest density permitted within that county or in that city on that piece of property that you have believed has been agriculture for maybe 30, 40, 50 years. One of the aspects of the definition is that I think it refers to the idea of citrus-packing facilities. That's something that would be an agricultural use, but that use is defined as commercial. And because that use is defined as a commercial, it provides for the opportunity for folks to utilize and leverage Live Local under that dynamic and under that circumstance. The way to think about Live Local is that you should not allow yourself to just say, well, the zoning that I have on my property, is it a zoning that's labeled for commercial? Is it a zoning that's labeled for mixed use? Is it a zoning that's labeled for industrial? And therefore I don't qualify. What you have to do is look at the zoning that you have, and see which uses are permitted to make a determination whether it fits within any of the definitions that have been applied and created under Live Local.

Misch Cetoute: So there's potentially an opening here for someone who has a property that allows citrus packing or some types of wholesale distribution of fruits and vegetables to opt into the Live Local program and get those benefits.

Pedro Gassant: There's certainly an on-ramp. There's certainly some opportunities there. We would have to look at the specifics of it to make a determination whether it would be a viable path. But there's definitely opportunities to leverage Live Local under that path.

Misch Cetoute: So let's actually dig in a little bit more to what you were saying at the beginning. Live Local allows you to get the highest density. Can you talk specifically what does the original sort of infrastructure of Live Local, the 2023 version of the bill, provide today?

Pedro Gassant: The original version of the bill was always meant to provide for an opportunity to preempt density, which means the maximum units that you could have on a piece of property, and height within a certain area. And so what Live Local did was say, look, if you provide 40 percent of your units capped at 120 percent of the area median income for a period of 30 years, then you're automatically entitled to the max number of units per acre that your jurisdiction permits and the maximum height within a mile or three quarters of a mile, depending upon which aspect of Live Local you're utilizing in order to develop the site without going to public hearing. And the idea behind Live Local is really to increase the volume of affordability within the state and provide for more opportunities for people to have a place to live. Miami-Dade and Florida as a whole has become much more unaffordable for people to live in, and a legislation has been crafted in order curate the opportunities for folks to live in our communities and to provide them with opportunities while also ensuring that the residential developers and that the developers who are in the market have an opportunity to really provide them with the opportunity for living affordably within the state.

Misch Cetoute: And to that point about increasing affordable supply of housing, whether that is a mixed use or a residential facility, can you tell us a little bit more about how the act maybe requires or regulates mixed use? One of the main questions that we get is, OK, if I do a mixed-use program, does it all have to be affordable? Can I use, you know, all types of hotel or restaurant uses within this project? What is the breakdown on a mixed-use versus strictly residential project and has that changed?

Pedro Gassant: So it has changed. Under Live Local, you are required to have at least 65 percent of your units as residential. One of the changes that occur within the act is that it requires that the local government cannot require you to have more than 10 percent for your spacing as non-residential. So it mandates 65 percent and then says that a local government can't say, hey, 35 percent of it has to be non-residential in order for you to qualify for Live Local. And so that has been one of the big changes, is that it's created these parameters and guardrails to ensure that different municipalities and jurisdictions don't create limitations on the ability to be able to create Live Local. And in some circumstances, it doesn't make sense to say, hey, we want to have 35 percent of this building to be non-residential when you want to be to provide for more residential opportunities and more affordable housing on the side.

Misch Cetoute: Let's shift gears a little bit and talk about tax. So I know that in the beginning, there was a lot of excitement about the potential tax benefits of Live Local Act, specifically getting the exemption for whether it's a newly constructed property or something that's recently renovated is up to debate, but I'm curious, one, for you to unpack what exactly the tax benefits are, and then two, if you could talk a little about how you've seen [it] apply in real life.

Pedro Gassant: So I think you have to first take a look at the distinction between what we were just talking about, which is entitlements, right? So you have to have 40 percent of your units capped at 120 percent of area median income (AMI) for a period of 30 years. That's not the scenario under the taxes. Under the taxes, you need to have at least 71 units that are capped that 120 percent of the area median income in order to qualify.

Misch Cetoute: So let's pause there. You're saying there, in order to get into the tax program, you have to have at least 71 units.

Pedro Gassant: That's correct.

Misch Cetoute: But in theory, if you wanted to just get the entitlements, perhaps you could have a project that's 50 units?

Pedro Gassant: That is correct. Under Live Local under the entitlement would be what we were just talking about, 40 percent of the units. You get the maximum density, maximum height, maximum floor area ratio. You get all of those items under that aspect. But under the new bucket, which we're talking about now, which is tax, you have to have at least 71 units that are capped at most at 120 percent of the area median income. And as opposed to being 30 years, which the entitlement regulation, you have to make a commitment for three years under Live Local for the tax exemption. And what it does is there's another bifurcation I'm going to create. So if you cap 71 units at 120 percent of the area median income, then you're entitled to a 75 percent ad valorem tax exemption. But if you cap those same 71 units at 80 percent of their median income then you would be entitled to a 100 percent ad valorem tax exemption. You don't have the 30-year period as you have on the entitlements. You only have a requirement for three years, and the process is one in which you have to get certified by the Florida Housing Finance Corporation and then get the actual exemption from the local property appraisal.

Misch Cetoute: In practice, the state is not actually the entity that's giving you the tax refund. You're not getting a tax refund from the state. You're going to your local property appraiser.

Pedro Gassant: That's correct. So what the state does is provides you with the initial certification to say that, based on what you've given me, it appears that you qualify for the exemption. But the entity that's actually giving you the exemption is the local property appraiser. And then the property appraiser has its own set of regulations and rules that you have to comply with in order to actually obtain the exemption. One of the things that you noted earlier is that there are certain distinctions between when you can qualify for the exemption, right? So one of the key aspects of the law is something called "newly constructed." What does that mean? Does that mean that I have to build it brand new from the ground up? Or does that mean that I can do a rehabilitation that's substantial enough to essentially make it new? And then what does that mean? There's a variety of distinctions as to what will qualify an individual to be within the "newly constructed" language of the tax exemption.

Misch Cetoute: And so in your application of this law, have you seen any sort of distance between the state's certification of a property as newly constructed and what the property appraiser says and what happens when these entities don't agree? What if the state says yes and the, you know, local municipality for whatever reason says no?

Pedro Gassant: Well, so it wouldn't be the municipality, it would be the property appraiser. But I think the biggest difference is that the state is looking at it from a bird's eye view and the property appraisers are looking at it from a more granular perspective. And so they're taking a much more nuanced look as to what's actually happened at the building, at the property, and does it qualify within their perspective to meet the paradigm of being newly constructed. There have been differences of opinion, it appears, because the Florida Housing Finance Corporation is giving you a general certification, whereas the property appraiser is making it a specific determination as to whether you meet the newly constructed language and whether you in fact meet the requirements to be exempted from the tax requirements.

Misch Cetoute: Awesome. So switching gears from everybody's favorite topic of taxes to another favorite topic, especially down here in South Florida: traffic and parking. Are there any updated parking reduction requirements?

Pedro Gassant: So the latest legislation has really changed a word that has had a major impact. So it used to be and, you know, be within a major transportation hub and be within 600 feet of a parking area. Now it's become or. And so you can be either or in order to receive some of the benefits of the parking. It has actually enhanced the opportunities to reduce the parking requirements so that individuals can get into these affordable homes. It's all being drafted and tailored to ensure that more people get access to affordability.

Misch Cetoute: And now, some people might have an issue with the reduction of parking requirements. What do you think is the legislature's point in requiring that local governments cut these requirements, assuming that the parking requirements were good in the first place?

Pedro Gassant: So one of the issues for any development, any construction, is the cost. The majority of parking spaces cost about $30,000 to build, particularly if it's in a parking garage. When you start thinking about that added cost, it makes it even much more burdensome to provide for affordability. And so I think the legislature properly made a determination, look, we have to get people into homes as soon as possible. The market will determine how much parking is needed, but we need to get them into homes as soon as we can, into homes that they can afford, so that we can address this affordability crisis. So actually, kudos to the Florida Legislature for providing for these opportunities, because it's really going to help drive for the opportunities for more affordability within our state.

Misch Cetoute: And so let's go on to another controversial or groundbreaking provision within the latest Live Local Act, and they're calling it YIGBY, Yes in God's Backyard. Can you talk more about the specific provisions that relate to religious institutions?

Pedro Gassant: Absolutely. So one of the major additions to Live Local is that it creates a new provision that allows for any property owned by a religious institution that houses a place of worship to be able to seek approval from a board or a local municipality if they provide 10 percent of their units as affordable. Now what's important here is that unlike the Live Local that we've been talking about, which has a child provision and that mandates that the government approve it if they meet the requirements. In that circumstance, it simply provides for a more efficient way to get to public hearing because it says that the local government may approve any type of development on these religious institutional property if they provide for 10 percent of their units as affordable. So what does that mean in practice? If I'm on a property that's owned by a church that's vacant, and I don't want to go through the rigmarole that's typically required — let's say I would have to typically change the land use, change the zoning, go through that process, and then go to likely an approval — all I would have to do is create my site plan and go straight to hearing. And then at the hearing, the board can make a determination whether they want to approve that development or not without me having to go through the additional steps in order to get that site plan approved under Live Local. Now, I would still have to provide 10 percent of my units as affordable, but at least it gets me to hearing faster and it gets in a position to have my item heard. Now, how do you get there and how that's going to work depending upon the jurisdiction that you're in? It's going to vary. But under the statute, it provides you with an on-ramp in order to get to hearing as soon as possible.

Misch Cetoute: And you're saying that that requirement of affordability is only 10 percent for religious institutions, whereas for, you know, a private developer, typically it's 40 percent.

Pedro Gassant: That's correct. But remember, the difference is the private developer at 40 percent gets an automatic approval administratively without having to go to public hearing, assuming that they meet all of the other land development regulations. But under the religious exception, the Yes in God's Backyard, as you referenced it, would essentially allow for the opportunity for the board to approve it faster than they would normally be able to.

Misch Cetoute: Excellent. Well, I think in terms of questions, we're starting to wind down. So Live Local has changed considerably since the initial 2023 version of the bill. We also know there was an update in 2024. What aspects do you think from the original you would like to have seen preserved? What aspects have changed? And are there any grandfathered provisions that you're looking at specifically?

Pedro Gassant: So one of the things that I think would create an opportunity for more affordable housing would have been if the original provision of Live Local, which allowed maximum height, regardless of whether the height was obtained by bonuses, etc., to be utilized in the height calculation for the new project. Under the recent amendments of Live Local, there appears to have been some concern about community responses to that. And because of that, they eliminated your ability to utilize Live local to use the bonuses that may have been applied to certain buildings. I think that that would have created more opportunities for affordability, right? The higher we can build our buildings, the more units we can fit in those buildings, the more housing affordability we can provide. So I think that that's one aspect I would have loved to see preserved in Live Local, because it would have given more people opportunities in order to get more affordable housing.

I think one of the changes that has been impactful is on the tax side. So one of these issues that you had historically on the tax side is that if Misch bought a property, and that property that Misch purchased, you went through the process, you received the exemption. I come in, Pedro wants to buy that property from you and obtain the exemption as well. But if we're in a jurisdiction that opts out of the program that says "you know what, we don't think that we should be subject to this and we meet the Schimberg requirements because there are more inventory available than there are households to rent them. We're going to opt out from the ad-valorem exemption." If we wanted to do that under the previous version, I couldn't come in and get the exemption if the opt-out provision was in place, simply because the grandfathering provision was impersonal, meaning that it would only follow you as the previous owner. It would not be effective for me, even if Pedro said, "You know what, instead of buying the property, I would buy Misha's entity." It did not run with the land. But one of the changes is that now there's an opportunity even for Pedro with his entity, so long as you had the exemption prior to the opt-out. I can come in and I can buy it, apply for the exemption and qualify continuing the exemption throughout the life of the program. So those are just two off the top of my head that I think would be beneficial and that would continue to help provide for more affordability.

Misch Cetoute: So this last one is interesting. It's about the employer-sponsored housing under this updated Live Local policy. It seems that there's special provisions for healthcare employees. Can you talk a little bit about that?

Pedro Gassant: It's a very nuanced and tailored program. The idea is really to provide for more housing, more affordability for employer-sponsored projects. Historically, in the U.S., if you go back to the early 1900s, a lot of housing was sponsored by employers. You had entire communities that were built by corporations. And I think this is sort of a nod to that historical impact and trying to figure out what ways do we create on-ramps for more affordability. And I think that's what that provision is meant to do, is to create these nestled opportunities for employers to create more affordability through Live Local.

Misch Cetoute: My last question is how can developers leverage the Live Local Act to streamline approvals and reduce entitlement?

Pedro Gassant: Well, there's a variety of ways for developers to leverage Live Local, but it all depends upon the circumstances. It all depends upon the municipality that you're in, the county that you are in, the jurisdiction that you are in. I think one of the best ways to leverage it is to call somebody like Holland & Knight. Get us on the call. We specialize in this. We've done a lot of cases on Live Local, both on the tax side and on the entitlement side, and we can certainly help guide those developers through the process.