Florida’s Republican-Led, Nearly Unanimous Housing Reforms

Amid a ballooning housing affordability crisis that voters across the political spectrum have ranked as a top priority, the Florida state Legislature last month passed one of the most wide-ranging housing bills in the country.

The bill, which was quickly signed by Gov. Ron DeSantis, was backed by Republican sponsors including Senate President Kathleen Passidomo but sailed through the Legislature with near-unanimous support from Democrats as well as Republicans. It may have attracted little attention at all but for a provision that totally preempts local governments’ ability to adopt rent control.

That provision angered tenant advocates, including those who supported a rent control referendum that was overwhelmingly approved by Orange County voters just a few months ago, and led to the dissenting votes of six Democratic representatives in the state House. But the bill promises to invest more than $700 million in affordable housing for middle-income families, and achieves a set of state-level zoning reforms that other legislatures have struggled to build consensus around.

“This is an issue that anyone can lead on, and Republicans are taking charge on finding market-driven approaches [to housing affordability],” says State Sen. Alexis Calatayud, who sponsored the Senate version of the bill. “We tried to find every possible way to alleviate the cost burden for families and the workforce in Florida.”

More Housing in Commercial Areas

There are lots of reasons why Florida’s housing crisis has become so dire, including the rapid pace of population growth, a unique set of environmental and geographical challenges and one of the highest proportions of low-wage workers in the country. The Legislature shares in the blame, too, having repeatedly diverted funds meant for affordable housing to other purposes over the last 20 years, adding up to more than $2 billion, according to advocates. The cost of rents has only spiked since the pandemic began.

The bill, known as the Live Local Act, compiles a range of policies meant to reduce the cost of housing. Aside from investments in state programs that provide grants and loans for low- and middle-income housing, the law supersedes local land-use regulations in some areas to promote denser housing. Under the law, local jurisdictions are required to permit multifamily housing in areas zoned for commercial uses if at least 40 percent of the units are affordable to people earning up to 120 percent of area median income (AMI), and they are barred from restricting the height and density of those projects beyond the most permissible standards in their codes.
The law also waives property taxes for projects that include at least 70 units of income-restricted housing, with 100 percent exemptions for units that are affordable to people earning up to 80 percent of AMI and 75 percent exemptions for people earning up to 120 percent.

Critics note that the affordability provisions in the bill are not targeted to low-income people who have the greatest needs. Under the law, a studio apartment for a single person earning up to 120 percent of AMI in Miami-Dade County could be rented for more than $2,000 a month, and a family of four could pay nearly $3,000, while the unit would still qualify for tax relief.

“It’s well above what folks living and working here make,” says Alana Greer, the director and co-founder of the Community Justice Project, a Miami-based legal and advocacy group.

In passing the Live Local Act, Florida jumped to the head of a pack of other Republican-led states that are debating zoning reforms. Montana Gov. Greg Gianforte is backing a slate of housing reforms in the legislature, and the Utah Legislature has been debating a variety of zoning-related policies as well.

“This is nationally important because it has done what no one else has done, which is put together all these different strategies in a new way and then get the buy-in of all Republicans and Democrats,” says Calatayud. “I know we didn’t hit unanimity in the House but we certainly did in the Senate, and I think that’s a huge feat.”

State Preemption Cuts Both Ways

State preemption of local control over housing policy has been seen as both a boon and a threat to affordability. But lately, more state legislators are seeking to set clearer rules to promote lower-cost housing development. In California, Democratic state lawmakers aligned with Yes In My Back Yard (YIMBY) groups have proposed a series of policies that would require cities to permit more housing. Massachusetts has passed laws requiring more permissive zoning near transit stations, and Connecticut legislators recently battled over the terms of a bill meant to permit more accessory dwelling units statewide.

“From an economic standpoint, the strongest argument for states getting involved is when localities are doing something that hurts regional or state-level outcomes,” says Jenny Schuetz, a senior fellow at Brookings Metro who studies housing policy.

The case is clear in places like California, where state housing-production goals and investments in transit infrastructure are compromised by local governments that block new housing from being built, Schuetz says. And Florida’s new law could help produce more housing in commercial areas, where there is sometimes less resistance to development than there is in residential neighborhoods that have opposed policies allowing conversions of single-family homes to duplexes or fourplexes. It’s “not as obvious” that preventing cities from adopting rent control serves the same types of state goals, Schuetz says.

For Emily Bonilla, an Orange County commissioner who backed the rent control referendum that voters approved last November, the state Legislature’s bill is “against what the people want.” Bonilla says she originally called for a rent control policy before the pandemic, but it wasn’t until last year, as rent increases were becoming more dramatic, that the other commissioners agreed to study the plan. The rent spikes in Orange County are disproportionately coming from corporate landlords, she says.

“What’s happening right now is not the way renting has traditionally been done. We now have these huge corporations that are buying up all these rental properties, even single-family homes,” Bonilla says. “They don’t have any connection with people or their tenants. It’s just about how much money they can make their shareholders.”

Corporations backed by private equity firms have purchased tens of thousands of homes across the Sun Belt in recent years. One estimate shows institutional investors controlling 40 percent of single-family rental homes by 2030.

Cities are often constrained by state policy when trying to implement rent control. Boston Mayor Michelle Wu recently proposed a rent stabilization policy, but needs state enabling legislation to pass it. Some 33 states have laws that preempt local rent control, according to the Urban Institute. Prior to the signing of the Live Local Act, Florida law allowed cities to impose rent control for up to a year in the event of a housing emergency that posed “a serious menace to the public.”

For some, the rent control preemption was a “poison pill” in a bill that has some beneficial provisions, says Greer, of the Community Justice Project. It was past time for the Legislature to reinvest in affordable housing, she says, but it’s yet to be seen whether the law will ease the housing challenges for the state’s most vulnerable renters.

“I don’t think anyone in power right now has the luxury not to do something on housing. It is a crisis that is so acute and so top of mind for people across the political spectrum,” Greer says. “We want to see housing built where it’s really needed.”