S
outh Florida developers are enthusiastic about the Live Local Act, a state law that allows them to build more units than zoning permits if they include affordable apartments in their projects. However, panelists at The Real Deal South Florida Real Estate Forum cautioned that bigger projects may not be feasible under the act.

    "Just because you can build 1,000 units per acre or go up to 80 stories near Miami International Airport doesn't mean it's a realistic project," said land use and zoning attorney Anthony De Yurre. "You can only build as much as your pro-forma will underwrite."

    Developers Gaetano Caltagirone and Asi Cymbal joined De Yurre on the panel, discussing how the Live Local Act can help create affordable housing. The law grants developers major tax breaks and allows them to build up to the tallest height within a 1-mile radius of a site, with at least 40% of units designated for households earning no more than 120% of the area median income.

    While allowing more density makes it financially feasible to include affordable units, there's a limit to how big developers can build. The panelists agreed that building high is often too cost-prohibitive and unrealistic, even with Live Local Act incentives.

    In Florida, about 20,000 to 25,000 units are underway under the act, but most of them are up to 75-feet tall due to expenses for sprinklers and other life safety mandates. The next feasible height tier is up to 120 feet, but developers would then have to push back on high parking requirements.

    Parking costs can be a significant burden, with prices ranging from $10,000 to over $35,000 per spot in a garage. At his Laguna Gardens complex in Miami Gardens, Cymbal retroactively applied the Live Local Act and was able to use tax breaks, but didn't use any of the law's height and density incentives.

    Under Live Local, developers can get a tax exemption of up to 100% of the assessed value of units for projects where all apartments are designated for households earning up to 120% of the AMI. Cymbal estimated that his project would see a $200-plus per door net benefit from the law's incentives.

    The law also allows developers to propose condos or condo-hotels for market-rate units, which can create interesting partnerships between affordable housing and luxury developers. De Yurre hinted that more affordable housing laws may be coming next year, including proposals to reduce parking mandates or eliminate them altogether.