Three new bills that recently went into effect in Florida aim to spur development in one of the hardest-hit real estate markets in the country. Collectively, the bills exempt densely populated urban areas from certain processes; expedite permitting processes; and shift the burden of proof off of developers.
The most controversial of these bills is the state’s new land planning law—the Community Renewal Act. The law gives developers in dense urban areas (including Broward, Dade, Duval, Hillsborough, Orange, Palm Beach, and Pinellas counties) the opportunity to be exempt from paying concurrency fees, which help fund road, school, and other types of improvements needed to accommodate new development. Other major provisions enable development permits with an expiration date between Sept. 1, 2008, and Jan. 1, 2012, to be extended and renewed for two years and exempt large-scale projects from going through the Development of Regional Impact (DRI) process where regional boards analyze how such plans affect nearby communities.
“The purpose of the legislation is to provide some stimulus for economic development in Florida. We do not have income tax, so we rely on sales tax and growth to fund our economy, and given the impact of the real estate-related downturn in Florida, the legislature felt that they wanted to take what action they could to lower, not remove, some of the regulatory barriers during this economic downturn,” says Wyman Duggan, a land use attorney at the Jacksonville, Fla.-based law firm Rogers Towers. “When the bill was going through the legislature, the concern was that it was going to make it too easy to do large-scale development.”
That concern has already spawned a lawsuit. On July 8, a group of local governments filed a lawsuit, which barely addresses the concern that the bill will lead to increased sprawl and traffic congestion and instead accuses the state of violating two technical provisions of its constitution. The lawsuit doesn’t come as a surprise. “There is an ongoing public policy discussion in Florida about the limits of growth,” Duggan says. “In fact, a referendum has been certified with the fall 2010 budget that would amend the constitution to require that all land use amendments be subject to popular referendum.”
Generally, developers are optimistic that the bill—assuming it’s not overturned—will help spur growth, says Carla Coleman, executive director of the Urban Land Institute’s Southeast Florida/Caribbean district council. “It extends building permits for a couple of years,” she says. “Financing continues to be a challenge, but a lot can change in two years.”
In the short term, though, the development community expects the Community Renewal Act to have little impact as developers still must face two gigantic hurdles: dried-up capital markets and a high level of inventory. “Let’s face it, the backlog of residential units in Florida is huge. It’s going to take a good long time to work through that inventory. The credit markets are maybe starting to loosen up depending on who you listen to,” says Robert M. Rhodes, counsel at the Jacksonville, Fla.-based law firm Foley & Lardner. ”It has a more positive impact longer term if we can finally develop a sane transportation mitigation policy for Florida.”
|Community Renewal Act (Senate Bill 360)||House Bill 227||House Bill 521|
|What it Does||Eases government oversight; exempts developers building in dense urban areas from paying for road improvements if traffic generated by the projects exceeds local capacity; extends building permits for two years||Changes the burden of proof for challenged impact fees from the developer to the government||Diminishes the more stringent legal standard for petitioners to meet when challenging tax assessments from clear and convincing evidence to a preponderance of evidence|
|What Developers Like||Provides stimulus for economic development in Florida; extends building permits||Levels the playing field for private competitors||Will likely cause both local government and individual property appraisers to pause and pay more careful attention to their actions|