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Don’t let Florida become California

Increasing the supply of affordable housing takes a few common-sense steps. But local politicians are the big obstacle. They don’t have the will or courage.

  • Sarasota
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Thirty-five years ago, CEOs in the Florida Council of 100 and a few of the more intelligent state elected officials and lawmakers worried that if Florida’s public policy makers were not careful, Florida would become another California. You know … 

A hell-hole of over-taxation and over-regulation to the point of killing the economy and driving people to leave.

Thankfully, that did not happen then and has not happened — yet. But the conversation is still as relevant today as it was in 1990 — perhaps even more so. In fact, one of the keynote speakers at the Florida Housing Summit last week in St. Petersburg entitled his talk: “How to Keep Florida from Turning into California (in all the wrong ways).”

M. Nolan Gray, research director for California YIMBY (Yes in My Backyard), began his remarks by indicating bluntly Florida is well on its way to California: “You have already adopted all the same rules as California.”

For home builders and prospective home buyers, it probably feels that way — Florida is increasingly California-izing. For sure, the cost of housing — while not at California’s insane levels — has risen dramatically in the past 20 years. So much so that Florida is no longer the low-cost, low-tax place it once was. 

Even still without a state income tax, Florida has become expensive — and is becoming increasingly so by the day. Especially so for the poor and middle class.

As we’ve stated in this space many times before, it’s all about the housing.

The costs of homebuilding, home ownership, apartment rents, property insurance, property taxes and local development regulations are pushing Florida rapidly toward the California cost spectrum. 

Making matters worse, of course, are the Biden inflation and high interest rates — both reminding many Baby Boomers of those horrible days in the early 1980s when many homeowners were paying 19% negative-amortization interest rates. That made housing unaffordable then.

Inflation and high interest rates are making housing even more unaffordable now. Indeed, housing affordability is a crisis everywhere in the United States. Everywhere.

But in truth, while Washington policies have fueled higher housing costs, at the root of the problem everywhere are local zoning laws.

Disastrous zoning laws

Over time, the mountains of restrictive, property-rights-killing zoning codes have become unreasonable, unwieldy and far too complicated. They are an almost impenetrable Amazon jungle — agonizingly frustrating for property owners to cut through and for homebuilders to build homes fast enough to accommodate all the people moving to Florida. 

The bureaucracies, ordinances and regulations are doing what government’s chief role has always been — to be a punishing agency that appropriates, compels and prohibits; an instrument that harms, restricts and halts free people.

When Houston changed its minimum lot sizes from 5,000 square feet to 1,400 square feet, it fostered the construction of more than 80,000 new housing units, reducing costs for young couples.
Image courtesy of John Burns Research & Consulting

Here’s one tiny example: Adrian Moore, vice president of the Reason Foundation, a member of the Florida Policy Project board and a resident of Sarasota, was one of the moderators at the summit. He shared how he and his wife are trying to sell their single-family home on Siesta Key.

Prospective buyers walked away after learning Sarasota County ordinances forbid converting Moore’s home to a duplex — even though duplexes surround Moore’s home on all four sides. They were built before the county changed the zoning rules. And even though owners and neighbors in the surrounding duplexes are coexisting just fine, Moore has no control over his property.

Experts at the Florida House Summit illustrated the wider and disastrous effects of local zoning laws with data that should make everyone realize: This is really bad. To wit:

Rosemarie Hepner, vice president of the Terwilliger Center for Housing at the Urban Land Institute, flashed a slide showing how many years it would take an individual or family earning 80% of Area Median Income to save to buy a home:

  • Miami: 34 years
  • Sarasota-Bradenton: 32
  • Orlando: 31
  • Cape Coral-Fort Myers: 30
  • Tampa Bay: 28
  • Jacksonville: 28
  • Lakeland: 27

Here was another one: the percentage of homes affordable to buy if you earned 80% of AMI:

  • Tampa Bay: 41%
  • Jacksonville: 40.4%
  • Lakeland: 40.3%
  • Cape Coral-Fort Myers: 34.5%
  • Sarasota-Bradenton: 33.4%
  • Orlando: 31.9%
  • Miami: 31%

Every Florida market ULI measured is not producing enough homes and apartments to meet demand.

Look at the two Florida maps. They further illustrate the crisis. Lesley Deutch, managing principal of John Burns Consulting & Research, showed two other startling slides:

It takes an annual income of $118,000 to purchase a median priced, three-bedroom home in Tampa; but those homes are in Zephyrhills and Plant City, long commutes. It takes an annual income of $65,000 to rent a new apartment — one bedroom, one bath and 860 square feet.

“A lot of people are spending 60% of their incomes on housing,” Deutch says.

Now check out the table showing typical workforce incomes. None could qualify for the median home; only three of the two-income households could qualify for the apartment.

Deutch told the audience one other notable effect of the housing issue is that Tampa-Hillsborough County has experienced a net out-migration of population in the past 12 months, with people moving to Ocala, Lakeland and Citrus County, where housing costs are less.

Best practice ideas

Employers, social service leaders, economists and homebuilders have been decrying these conditions for more than a decade, to little effect.

Sure, virtually every local jurisdiction has adopted density-bonus incentives for apartment builders to include a percentage of below-market rate units in their projects. 

But they have made little difference. They are just more government mandates and interventions that have no effect on housing prices.

So that is what the Florida Housing Summit wanted to address. The summit brought together 250 state legislators, municipal and county elected officials, county and city planners, homebuilders, insurers and nonprofit housing advocates to hear experts offer ideas and reforms to make housing more affordable for Floridians.

The summit was the brainchild of former state Sen. Jeff Brandes, founder of the Florida Policy Project, a research organization dedicated to bringing best practices to Florida in housing, insurance, transportation and criminal justice.

Brandes and the speakers delivered on the summit’s mission — presenting economically rational, practical and sensible ideas, many already being implemented elsewhere in the country. Every city and county elected official, every city and county manager and planner should watch the video of the conference and put the speakers’ ideas into practice.

Here are the summit’s overriding themes:

  • Allow for smaller lot and unit sizes at every level of housing.

After Houston reduced its minimum lot sizes from 5,000 to 1,400 square feet, that fostered construction of more than 80,000 new units, making housing more affordable for young people.

Deutch advocated “simplified,” built-to-rent single-family developments — clusters of homes on small lots with no garages and tiny yards. 

Manatee County Commissioner George Kruse made the logical remark that mandated lot sizes are not needed if zoning codes already have setback and height limits. 

  • Upzone (increase densities) with “missing middle” housing. 

This means allowing a wide mix of housing types in a neighborhood — duplexes and fourplexes side by side and stacked; courtyard buildings; townhouses, medium multiplexes and live-work apartments. 

Three examples cited: Crescent Heights in St. Petersburg; parts of Hyde Park in Tampa; and Wellen Park in south Sarasota County.

  • Legalize “by right” accessory dwelling units. 

Allow a detached or attached additional unit on lots with single-family and multifamily lots. “By right” means it’s automatic; no planning hearings required. 

California is at the forefront of this movement. After the state eliminated a long list of prohibitions and requirements in 2019, construction of ADUs increased from 5,852 in 2019 to 17,460 in 2022, up 198%. 

  • Eliminate minimum parking requirements. 

Minneapolis cut in half parking requirements for large complexes and eliminated parking requirements altogether for projects with 50 or fewer units — as long as they were close to high-frequency transportation.

Rental rates dropped for studio apartments, and infill development with lower-cost units occurred outside of downtown.

  • Light-touch density.
  • Broaden Florida’s Live Local Act to allow multiple types of residential units (including owned units), not just rental apartments.

A lot of hope is being placed on Florida’s Live Local Act legislation, which requires communities to allow mixed-use and multifamily rental development on under-utilized or dilapidated commercial sites.

But Ed Pinto, co-director of the American Enterprise Institute Housing Center and a foremost expert on market-based housing policies, sees unintended consequences. While he believes Live Local “is going to be big over the next five years,” he said it’s also likely to fuel more McMansions.

Pinto cited Raleigh, North Carolina. Developers turned a dead 35-acre mall into a vibrant retail, entertainment and multifamily housing project. In turn, single-family lots across the street shot up in value because of residents being able to walk to the redeveloped center. McMansions are now rising, there, pushing up home prices.

Pinto says Live Local should allow increased densities within an eighth-of-a-mile around the redevelopment to avoid McMansionization.

You get yelled at

Will these ideas find their way into Florida?

It’s difficult to be optimistic. You know the drill. The constituencies to stop development are vocal and organized; they always want more restrictions and hate population growth — dismissing the fact that an under-supply of housing drives up the cost of everything.

Nonetheless, as soon as anyone files a plan to develop in Florida — no matter what it is — the NIMBYs start swarming, and the politicians take cover to avoid being stung.

Commissioner Kruse summarizes it this way: “Nobody really wants to do anything (dramatic), because you just get yelled at.” Plus, he says, they want to be reelected.

In other words, they lack the political will and courage to help the masses. 

Gray countered that with his experiences, in California and elsewhere, he has built coalitions of employers, social-service advocates and a growing number of organized YIMBYs (typically young professionals) to make the case for the changes outlined above. That has worked.

Pinto says pro-housing advocates need to speak up; use California as the horror they don’t want; and say changes need to be made so their grandchildren will have a place to live.

Nolan told the summiteers: “Be the leader your community needs.” 

Either that — or go the way of California. 



Matt Walsh

Matt Walsh is the CEO and founder of Observer Media Group.

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