Florida Governor Signs Beefed Up Live Local Act

Legislation Takes Immediate Effect, Now Includes Condos, Some Neighborhood Protections

Florida Gov. Ron DeSantis has signed a bill that amends the state’s Live Local Act that passed last year with clarifications around density, height and zoning requirements. (Getty Images)

By Joshua S. Andino
CoStar News

Florida Gov. Ron DeSantis has signed a bill that amends the state’s Live Local Act, doubling down on the original law’s intent to clear red tape, spur new residential and mixed-use development and bring down housing costs.

The Live Local Act originally passed at the beginning of 2023, providing major funding and tax incentives for developers to build mixed-use and multifamily projects, overriding some local zoning regulations and banning rent control across the state outright.

But while the law was considered a major step toward addressing the state’s housing affordability crisis, local governments pushed back, implementing development moratoriums or dragging their feet on building approvals that under the new law were now strictly a matter of administrative routine without public hearings.

Disagreements over the law led the Florida legislature to double down, passing what’s being called a “glitch bill” by legislators to address the problems that arose from the original law. The new legislation, signed Thursday by DeSantis, clarifies uncertainties in the law that local municipalities had used to prevent development or extract concessions from developers.

The new changes to the Live Local Act were outlined in Bilzin Sumberg’s 5th annual development conference earlier in May. (Joshua S. Andino/CoStar News)

The clarifications prevent municipalities from restricting projects up to 150% of the currently allowed floor area ratio; provides height protections for single-family neighborhoods; removes parking requirements for transit-oriented developments while reducing parking requirements by 20% for developments within half-a-mile of a transit hub; and added tax exemptions for land and common areas included in developments, not just the residential units. The law now also extends to for-sale condo units, in addition to apartments.

The new law also prohibits Live Local Act projects within airport flight paths, noise zones, and those that exceed airport height restrictions.

The Live Local Act is “the most comprehensive change to Florida’s zoning laws in decades,” said Anthony De Yurre, a land use and zoning attorney with law firm Bilzin Sumberg, in a prepared statement. De Yurre, who helped craft much of the legislation, added that developers have been “waiting for these revisions and clarifications to tweak their projects or update” their plans. “The final bill enhances the probability of Live Local Act projects getting approved, financed and built,” De Yurre said.

For similar articles and additional Commercial Real Estate news, visit Costar and click here <—-

Stocks’ recent win streak

Last week stocks made their longest weekly gain since February with the Dow closing above 40,000, a fresh new record, and the S&P 500 hitting 5,300. Strong first quarter earnings and early signs that inflation is cooling have sent stocks higher. The short lived meme stock rally also contributed to increased trading volume from retail investors.

Analysts have been raising earnings forecasts for the current quarter at an unprecedented speed, as more and more believe a soft landing is in store. A number of factors will affect how markets perform through the rest of the year, including inflation, the Fed’s monetary policy, and the election. However, if the stars align and inflation cools faster than expected, it’s possible stocks could keep making all time highs, although not without ample volatility along the way.

When you build “luxury” new apartments in big numbers, the influx of supply puts downward pressure on rents at all price points — even in the lowest-priced Class C rentals.

“In Florida — which continues to make itself a supply magnet with strong demand + the boost from the new Live Local legislation — three markets (Fort Myers, Sarasota, Daytona Beach) are seeing Class C rent cuts around 10-12%. “

via

Via Jay Parsons • Rental Housing Economist (Apartments, SFR), Speaker and Author

Yes, when you build “luxury” new apartments in big numbers, the influx of supply puts downward pressure on rents at all price points — even in the lowest-priced Class C rentals. Here’s evidence of that happening right now:

There are 12 U.S. markets where Class C rents are falling at least 6% year-over-year. What is the common denominator? You guessed it: Supply. All 12 have supply expansion rates ABOVE the U.S. average.

In Florida — which continues to make itself a supply magnet with strong demand + the boost from the new Live Local legislation — three markets (Fort Myers, Sarasota, Daytona Beach) are seeing Class C rent cuts around 10-12%. Not shown on this Top 12 list, but there are three large Florida markets with high supply also seeing Class C rent cuts of 4-5%: Orlando, Jacksonville and Tampa.

Other key markets nationally to highlight: Ultra-high-supplied big markets like Austin, Phoenix, Salt Lake City, Atlanta and Raleigh/Durham are all seeing sizable Class C rent cuts of at least 6%. Small markets on the list include Myrtle Beach, Wilmington NC, Boise and Colorado Springs.

Bear in mind that apartment demand is NOT the issue in any of these markets. They’re all demand magnets. Sure, they’ve seen some moderation / normalization for in-migration and job growth, but they’re still ranking among the national leaders for net absorption.

Simply put: Supply is doing what it’s supposed to do when you add an awful lot of it. It’s a process academics call “filtering” — which happens when higher-income renters in Class B apartments move up into higher-priced new Class A units … and then Class B units see vacancy increase, so they cut rents to lure up Class C renters. And down the line it goes.

But filtering works best when we build a lot of apartments. We didn’t see this phenomenon play out as clearly in past cycles when supply was relatively limited — and (crucially) failed to keep pace with demand.

Less anyone still in doubt, here’s another factoid: Where are Class C rents growing most? You guessed it (I hope!) — in markets with little new supply. Class C rent growth topped 5% in 18 of the nation’s 150 largest metro areas, and nearly all of them have limited new apartment supply. That list includes markets like: Midland/Odessa TX, Knoxville TN, Grand Rapids MI, Dayton OH, Wichita KS, Buffalo NY, Louisville KY, Little Rock AR, and Albany NY.

Among larger markets, Cincinnati and Chicago both saw Class C rent growth near 4% — and both ranked below the U.S. average for new supply.

Most new construction tends to be Class A “luxury” because that’s what pencils out due to high cost of everything from land to labor to materials to impact fees to insurance to taxes, etc.

So critics will say: “We don’t need more luxury apartments!”

Yes, you do. Because when you build “luxury” apartments at scale, you will put downward pressure on rents at all price points.

#multifamily #affordability #housing #rentsActivate to view larger image,

In 2024, Multifamily completions are outpacing new starts at the largest levels since 1975.

This research and article comes from Jay Parsons, Rental Housing Economist (Apartments, SFR), Speaker and Author. <— Click on link to see other articles and research from Jay.

So far here in 2024, U.S. multifamily completions are outpacing new starts at the widest levels since 1975. And that gap is likely to further widen. Ironically: Cheap debt helped fuel the multifamily construction boom, which in turn tamed rental inflation; and expensive debt is helping tame the multifamily construction boom, which could fuel renewed rent inflation.

Through the first four months of 2024, multifamily completions are at multi-decade highs while starts continue to rapidly plunge due to several headwinds: high rates, flat-to-falling rents for lease-ups (depending on the market), and construction costs often coming in above replacement value.

Simply put: It’s very difficult to start new unsubsidized apartment projects right now.

In the short term, supply will likely continue to exceed demand in 2024 — keeping vacancy elevated and putting downward pressure on rents.

In the mid and longer term, you can see how (assuming the job market stays healthy) demand could exceed supply again — perhaps even by next year in some markets, which would in turn put upward pressure on rents (though unlikely to the sky-high growth levels of 2021-22).

It’s difficult to see a scenario where multifamily starts could meaningfully accelerate prior to 2H’25 and more likely in 2026. Even if the Fed trimmed rates a bit, equity and debt players will want to see the current wave of lease-ups stabilize and rent growth return even at moderate levels. Plus, we’ll likely also need to see stabilized asset values rebound enough to bring back the discount to build versus buy (at scale).

hashtag#multifamily hashtag#construction hashtag#apartments

NNN STNL on the brink?

I follow Daniel Herrold on X and LinkedIn and he’s quite knowledgeable on the markets he dominates. It’s interesting insights for certain.

NNN STNL on the brink?

I follow Daniel Herrold on X and LinkedIn and he’s quite knowledgeable on the markets he dominates. It’s interesting insights for certain.

Tampa Retail Real Estate Market Report

Article via Bounat.com – Click Here for complete story and others similar to it.

The commercial real estate brokers at Bounat work diligently to compile a comprehensive list of the top commercial real estate activity in the Florida region on a frequent basis.

Retail leasing fundamentals in Tampa remain solid despite headwinds caused by continued disruptions in the supply chain and lingering concerns post-pandemic. However, these factors are being counterbalanced with the fact that Florida is the fastest growing state in terms of population in the country, and many people are moving to Tampa specifically.

In general, retail demand in Tampa has been consistently strong over much of the past decade, driven by solid population gains, wage growth, and steady consumer spending. Current vacancy is 3.3%, which is up +0.2% compared to Q3 2023, and the vacancy rate for retail real estate in Tampa remained steady over the past year and is well below the national average, estimated at around 4.5%.

Rent growth has accelerated in recent quarters due to strengthening overall leasing fundamentals following the lifting of some pandemic safeguards. Average asking rents as of Q4 2023 are at $25.56/SF, which is up $0.35 from Q3 2023 when the asking rate was $25.21/SF, up over 2% during the past 3 months (quarter to quarter).

There is currently 563,141 SF of new retail space underway, and nearly 1 million SF has been delivered in the trailing 12-month period. While the pace of new development is falling short of previous years, an uptick in demand bodes well for future development.

Retail investment sales activity over the last year has totaled roughly $1.6 billion in total transaction volume, fueled by considerable investment volume in Q4 and Q2 2022. Q1 2022, from a little over a year ago, still holds records for transaction volume with nearly $600M in retail property sales. It was the second highest quarter of retail real estate sales in the area, illustrating just how feverish investor appetite has been over the last year.

Retail investors continue to target deals in secondary markets like Tampa and Orlando as they seek higher yields, which is becoming harder and harder to achieve. Increased competition for assets is forcing an acceleration in overall retail pricing with the average price per SF growing by 10% year over year and by nearly 15% in the last two years. CoStar’s forecast calls for pricing to continue to rise through 2023 before beginning to level out in early 2024.

The most significant single-property trade over the last year took place in Q2 2023 when the Brandon Town Center (303 – 675 Brandon Town Court) sold for $220M at a price of $296/SF with a vacancy rate of 0% at the time of sale. The Tampa shopping center was built in 1995.

If you would like to discuss the Commercial Real Estate Markets or discuss your asset and its future, let’s connect.

http://www.DP-CRE.com

A New Workforce Housing Development Is Headed to Bradenton

The Nest at Robin’s Apartments will see 182 residential units all priced as workforce housing.

by Kim Doleatto via SRQ Magazine – Click here for this complete article and similar stories

The Nest at Robin’s Apartments will bring 182 new residential units to Bradenton—but unlike other projects going up in the region, these will all be priced as workforce housing. The units will be on a vacant five-acre lot next to Robins Apartments, just south of U.S. 301 on First Street East and east of South Tamiami Trail. Even though groundbreaking is next month and the project will take roughly 18 months to complete, builder and developer One Stop Housing has already received more than 100 applications.

Soaring local rents have made national headlines in recent years and interest rates have increased, making affordable housing a hot topic. It’s gaining some traction with local and state governments, with legislation like the Live Local Act, which, among other points, allows for increases in density and height in exchange for the creation of affordable units. It was recently applied to a downtown Sarasota project that’s still in its early stages. 

What’s different about The Nest is that 100 percent of the units will be—and remain—priced for working people, spanning 60 percent to 80 percent of the area median income (AMI).

Units will range from 300 square feet for a studio, (34), to 550 square foot, one-bedroom units (74) and 750 square foot, two-bedroom, two-bathroom units (74). 

The studios will be priced at 60 percent of AMI, which amounts to a one-person household earning no more than $42,240 a year. The one and two-bedroom units will be priced at 80 percent of the AMI, which amounts to $64,320 a year for a household of two.

New retirement regulation

The U.S. Department of Labor released new regulations on Tuesday expanding the scope of fiduciaries in relation to retirement accounts. With the peak of the baby-boom generation in or approaching retirement, rollovers of money from 401(k)s to IRAs are on the rise. Savers move close to $1 trillion each year out of their 401(k) employer-sponsored plans into IRAs and the new regulatory environment will ensure that investments are always in a person’s best interest.

Photo by SD

As a fiduciary ourselves, the regulation is an extension of our business model across financial services. The ruling should better align financial outcomes, lower fees, and decrease lock up requirements – all of which we’re major advocates for. Putting investors first is the ethos of our business and we view the new regulation as a major step towards industry wide best practices.

article via Titan Funds

Refer friends to Smart Cash to earn 6.0%* gross yield for up to 12 months. They’ll earn 6.0%, too. See details.

Home sales drop

via Titan Funds

Home sales for previously owned homes dropped 4.3% in March, and sales were 3.7% lower year over year. Although inventory improved significantly during the month, less people are buying homes due to increasing mortgage rates. All-cash purchases account for 28% of home sales, as more buyers are avoiding loans all together. 

Today’s pool of prospective homebuyers has shrunk compared to previous generations – more debt and higher housing costs have made it difficult to afford a first home. In 2020, 2% interest rates drove a surge in home buying that dried up much of the supply in the housing market. While timing is uncertain, rates will eventually decline and gradually bring buyers back to the table while also supporting a stable supply.