The lack of affordably priced housing, especially rental housing near wage-earner jobs, remains one of Sarasota’s most vexing economic and social challenges.
Fortunately, at long last, that persistent problem has spawned action — from local and state governments and, to an extent, the private sector.
Locally, the city of Sarasota recently expanded a density bonus program that allows developers to build more units in a project if a certain number of them are made available at affordable prices.
That change came on the heels of the new state law that alters the rules governing many local governments’ affordable housing policies and increases the state’s role in affordable housing programs.
Senate Bill 102, otherwise known as the Live Local Act, went into effect July 1. It added $150 million in funding for state affordable housing construction and rental assistance programs and somewhat expanded their eligibility.
More importantly, though, the Live Local Act creates new rules for local governments.
Perhaps the biggest change in the law is that cities and counties now must approve administratively residential or mixed-use projects that contain at least 40% affordable units even if the project is on land zoned for commercial, industrial or mixed use.
In other words, as long as the project meets relevant regulations for housing, the developer does not need to seek a comprehensive plan amendment or rezoning to get the project approved.
Moreover, local governments cannot require a comprehensive plan amendment or rezoning as a condition of approval.
The state defines affordable housing as that for which monthly rents or monthly mortgage payments including taxes and insur-ance are less than 30% of median household annual gross income. In Sarasota County, those payments would be about $1,650 a month.
The law also now allows developers access to information about all city and county properties already designated as appropriate for affordable housing. Under the old law, developers had to ask the city or county which specific properties were designated for affordable housing.
The old law also prohibited affordable housing projects on leased land; it had to be purchased. The Live Local law now allows projects on leased land.
The goal of both of these changes is to make it easier to propose and get approval for developments with significant affordable housing by reducing the local approval process requirements.
The law also made tax changes to incentivize the building of more affordable housing. Nonprofits now get an ad valorem tax exemption on land they own and lease for 99 years to affordable housing developments. Developers now get a property tax exemption on some properties used for building affordable housing. Local governments are now allowed to add their own property tax exemptions for affordable housing projects if they so desire.
Developers also can get a refund of up to $5,000 per unit for the sales taxes paid for construction materials used to build affordable housing.
Finally, corporations that donate to the state affordable housing funding program can get a tax credit for those donations.
These provisions should lower the cost to developers of building affordable housing units. That will work well with the city of Sarasota’s new density bonus program to encourage more affordable units in new developments.
Probably the most controversial part of the Live Local Act was a ban on local rent control ordinances. This was prompted by a rent-control ordinance voters approved last November in Orlando.
Given that rent control is well known to reduce the rate at which new housing is built, the Legislature felt that allowing local rent control measures would directly undermine the goals and state spending in the Live Local Act.
The Live Local Act will almost certainly help lead to more affordable housing being built in Florida. But the gap between housing supply and demand in Florida, and in the Sarasota region, is huge.
In the best case, some new funding and better incentives will close that gap a bit. Optimistically, I would guess by about 10% based on what I have seen in other states. With 90% of the gap still to close, more reforms are needed.
A few months ago, the Florida Policy Project released a report recommending four best practices to improve housing affordability, measures that have worked in other states.
Best Practice 1: Upzoning
This allows residential density to increase organically, by allowing neighborhoods to evolve to higher densities. Specifically, this creates infill opportunities consistent with neighborhood characteristics by removing housing type restrictions or creating opportunities for dividing up existing parcels.
Best Practice 2: Light Touch Density
This expands the housing options available to residential neighborhoods, permitting single-family houses, duplexes, triplexes, fourplexes, tiny houses, accessory-dwelling units and small-lot homes to increase housing diversity and supply.
Best Practice 3: Legalizing Accessory-Dwelling Units
This allows for adding smaller housing units typically suited for a single person or small households on existing lots.
Best Practice 4: Reducing Minimum Lot Sizes
This allows more housing units per acre while retaining other regulations to protect neighborhood character.
All of these practices can be implemented at the local level today to start reducing local housing affordability problems.