An updated version of Florida’s Live Local Act, a law designed to clear red tape and spur new residential development that helps alleviate the state’s affordability crisis, has arrived on Gov. Ron DeSantis’ desk.

DeSantis is expected to review the legislation in the coming days, Julia Friedland, the deputy press secretary for the executive office of the governor, told media outlets. The governor’s office did not immediately respond to email and phone calls from CoStar News.

The original law, passed last year by the state legislature, offers tax incentives and low interest loans for developers who commit 40% of the units in any multifamily or mixed-use project as affordable, a definition the law says is up to 120% of the area’s median income. The law overrode local zoning controls, letting developers build projects on areas designated for commercial, mixed-use or industrial purposes, and allowing projects to rise as tall as the nearest highest structure in a mile radius within that jurisdiction.

The law allows projects that meet its criteria to be administratively approved and not require public hearings, a process that can often drag on for months.

Florida’s Live Local Act Sparks New Development While Concerns Fuel Proposed Changes

The law encountered almost immediate pushback from local municipalities as new projects were proposed. In South Florida, cities like Doral and Bal Harbour issued development moratoriums in response to mall redevelopments; Miami Beach’s mayor at the time told the Miami Herald a proposed hotel redevelopment was the worst idea he had ever heard; and Pasco County on Florida’s west coast voted at the end of last year to file a lawsuit striking down provisions from the law.

“There isn’t a local government official that doesn’t tell me we have a housing crisis,” said Vicki Lopez, a Florida state legislator and one of the architects of the Live Local Act, during law firm Bilzin Sumberg’s fifth annual development conference on May 7 at the Four Seasons in the Brickell financial district. “I say, ‘we’re going to build [more housing]’ and they say, ‘but not in our backyard,’” said Lopez about her interactions with local officials.

The amended bill was passed earlier this year with little opposition. The clarifications prevent municipalities from restricting projects up to 150% of the currently allowed floor area ratio; provides height protections for single-family neighborhoods; removes parking requirements for transit-oriented developments while reducing parking requirements by 20% for developments within half-a-mile of a transit hub; and added tax exemptions for land and common areas included in developments, not just the residential units. The law now also extends to for-sale condo units, in addition to apartments.

“I know that a lot of times in Tallahassee we’re known for preempting local governments. But my thought is, if you would just help us do it right, we wouldn’t have to,” Lopez said.

The amended law would also provide some restrictions on development near airport flight paths and includes an opt-out clause for counties that have an excess of affordable housing.

Masoud Shojaee, CEO of developer Shoma Group, said there are only two ways to solve the state’s affordable housing crisis — rent control or the Live Local Act. Shojaee, who was also speaking at the law firm’s conference, called the Live Local Act a “strong tool” that allows developers to be part of the solution.

The act allows developers to completely bypass the political approval process, he said, while the tax incentives for added density allow developers to maximize their land use and offset the costs of the dedicated workforce units. Shojaee added that he was surprised more developers hadn’t made use of the law, saying “I can be part of a solution, and at the same time, I’m making money. It feels really good.”

DeSantis has 15 days upon receiving the bill to “veto the bill or sign the bill,” said Lopez. Otherwise, the bill goes into effect “automatically” after the 15-day period.

Lopez added the state wasn’t done trying to combat Florida’s housing crisis, promising to work on “the most comprehensive housing bill Florida’s ever seen” over the course of the summer.

Florida has done it again. If writing about rent growth in the Sunshine State could be set to music, it would be a case of the same song, second verse. An examination of all markets in the country with a total industrial inventory of at least 100 million square feet shows that Orlando was the top market in the nation for the third consecutive quarter.

Furthermore, four of the top 10 U.S. markets are in Florida.

Additionally, eight of the top 10 markets are still in the Sun Belt. That’s quite a feat given that an increasing percentage of industrial demand has been shifting to markets in the North and Mid-West, but it is a testament to the impact of population growth into warmer climates since the beginning of the pandemic.

Nowhere has that growth been more apparent than in Florida and Texas, which are the leaders for in-migration, and yet none of the Texas markets made the list for the first quarter of 2024.

Even with demand down sharply in Tampa in the last year by more than 70%, it still ranked as the second leading market in the U.S. for the pace of annual rent growth. That’s not surprising, however, considering that vacancy remains under 5%, nearly half of the vacancy rate in Phoenix, which is ranked third.

The vacancy rate in Orlando is higher at 5.7%, however, there was twice as much demand in the past 12 months as there was in Tampa. In both markets, vacancy is very tight in buildings under 25,000 square feet, which is where an outsized share of tenant demand is taking place.

The Jacksonville market rounds out the final Florida market in the top five. Its accelerated pace of demand is tied to its deep-water port and its proximity to a major industrial hub in Atlanta. It is also the only Florida market in the ranking that has seen an increase in demand in the last year, with absorption, or the change in the number of occupied squared feet, up nearly 25% in that time. The only market in the list with a lower vacancy rate was Fort Lauderdale, which trails the pace of rent growth in Jacksonville by less than 150 basis points.

It is also worth noting that these 10 markets represent nearly 40% of all U.S. industrial demand in the last year. But perhaps most notable of all is that of all the top markets for the pace of annual rent growth as of the first quarter of 2024, only the four Florida markets are also in the top 10 for projected rent growth over the next four years.