What Florida’s Live Local Act Looks Like Now—and What It Means

How does the new exemption impact the watershed affordable housing statute? David Leon, Hollie Croft and Nick Heckman of Nelson Mullins explain.

David Leon, Hollie Croft and Nick Heckman
David Leon, Hollie Croft and Nick Heckman

On March 29, 2023, Senate Bill 102, also known as the Live Local Act, was signed into law. It went into effect on July 1, 2023, and since that time, developers across the county have raved about Florida’s new law. While the zoning preemption is certainly of interest, the act’s “Missing Middle” property tax exemption, which provides incentives for renting to individuals or families whose incomes are at or below 120 percent of the median annual adjusted gross income for households with the metropolitan statistical area, or if not within a metropolitan statistical area, within the county in which such person or family resides, has been of great interest.

The Missing Middle Exemption was significantly altered when House Bill 7073 was signed into law on May 7, 2024. This amendment introduced a new provision allowing a taxing authority within certain counties where the number of affordable housing and available units are greater than renter households for persons in the metropolitan statistical area for persons whose incomes are at or below 120 percent AMI  to opt-out from the missing middle property exemption used for persons or families whose annual household income is greater than 80 percent AMI but not more than 120 percent AMI. In other words, those eligible units that would receive a property tax exemption of 75 percent of the assessed value (the “75% Exemption”) could be excluded if specific requirements are met.


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The amendment, however, astonished the Florida affordable housing industry. It created a property tax exemption for multifamily development financed with Florida Housing Finance Corp. funding that meets specific requirements. While the amendment and Senate Bill 328 provided several other updates to the act, the opt-out and the FHFC Development Exemption are the most significant changes. 

FHFC development exemption

The amendment, to a lot of people’s surprise, added the FHFC Development Exemption as subsection (4) to Section 196.1978, F.S. (i.e., the Missing Middle Exemption), providing developers an ad-valorem tax exemption set to begin in 2026 for portions of property in a multifamily project if such portions of the property provide housing to natural persons or families whose annual household income is at or below 80 percent AMI.

To be eligible, the development must be either new multifamily development or redevelopment. It must have at least 71 units that are used to provide affordable housing to persons or households whose household incomes do not exceed 80 percent AMI and are subject to a land use restriction agreement. FHFC has said that the LURA must be issued by FHFC under one of its funding opportunities. Moreover, FHFC has also stated that developments only receiving Low Income Housing Tax Credits are not eligible for the exemption. However, developments that originally only received credits are eligible to receive the exemption if such development receives additional FHFC funding through FHFC viability funding program and records a LURA on the property. 

Lastly, the exemption requires that the LURA have the following terms: (1) a term of 99 years requiring the property to provide affordable housing to persons or households at 120 percent AMI and below, and (2) include a provision setting forth a penalty equal to 100 percent of the total amount financed by FHFC multiplied by each year remaining in the 99-year term should the development cease to provide affordable housing under the exemption. 

The opt-out

The amendment added paragraph (o) to Section 196.1978(3), F.S. (i.e., the Missing Middle Exemption), and allows for taxing authorities within certain counties to opt out from the 75 percent exemption beginning in 2025 if specific requirements are met. For a taxing authority to opt out of the 75 percent exemption, the county in which the taxing authority has jurisdiction must be within an MSA where the number of affordable and available units is greater than the number of renter households in the MSA for the category entitled “0-120 Percent AMI.” The taxing authority must make this finding based on the latest Shimberg Center for Housing Studies Annual Report.

Once a taxing authority has made this finding based on the report, it must make the election to opt out via an ordinance or resolution (or renewal as provided below). For such an opt-out ordinance or resolution to pass, it must be approved by a two-thirds vote of the applicable governing body and after the taxing authority has provided notice to the jurisdiction of such ordinance/resolution/renewal in accordance with Section 50.011(1), F.S. (e.g., published in a newspaper of general circulation, printed once a week, etc.) before adoption.

Once the ordinance/resolution/renewal is approved and provided to the jurisdiction’s property appraiser, it will take effect on January 1, immediately succeeding the adoption of such ordinance/resolution/renewal. The ordinance/resolution/renewal will expire on the following January 1. In other words, the opt-out has a one-year term that must be renewed each year after the ordinance/resolution is passed. For example, if such an ordinance or resolution were passed in July 2027, the ordinance would go into effect on Jan. 1, 2028.

The opt-out provision does provide a grandfather clause allowing property owners of multifamily projects who are initially granted the Missing Middle Exemption before the adoption of an opt-out ordinance or resolution to continue to receive it for each subsequent consecutive year such property owner applies for and is granted the Missing Middle Exemption.   

Going forward

Each day, the act continues to evolve like every other law.  We will soon discover whether the law evolves into something terrific or becomes another page in the Florida statutes to collect dust. The amendment’s addition of the exemption has provided the affordable housing industry with much-needed relief. Conversely, the amendment’s addition of the opt-out provision has caused some confusion in the development industry for those seeking the Missing Middle Exemption. Currently, based on information provided in the Report, 49 of Florida’s 67 counties are eligible to opt out of the 75 percent exemption, and, as of June 2024, at least three taxing authorities in various parts of the state have already passed such resolution/ordinance to opt out of the 75 percent exemption.

David Leon is a partner in the Orlando office of law firm Nelson Mullins and leads its Affordable Housing Industry Group. Hollie Croft, also a partner at Nelson Mullins, represents developers in the full range of affordable multifamily housing matters. Nick Heckman is a senior associate at Nelson Mullins. His practice focuses on affordable housing and tax matters,

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