Developers in Florida are increasingly considering the addition of affordable housing units to projects that are already under construction or completed, rather than only at the planning stage. This trend was discussed by a panel at the Urban Land Institute’s Fort Lauderdale Forum, where industry leaders examined how the state’s Live Local Act is influencing development strategies.
The Live Local Act offers incentives such as property tax breaks for developers who include below-market rent apartments in their buildings. These incentives can help make residential projects more viable amid high interest rates and rising construction costs.
Eyal Peretz, founder of Fuse Group Investment Companies, shared that The Arcadian—a 502-unit apartment project in Fort Lauderdale—was not originally designed as a Live Local project but is now undergoing changes to designate some units as affordable housing. “The Arcadian started as a non-Live Local project and went through some transformation, and we are going through a process right now where we are about to submit [it as] a Live Local project,” Peretz said. He noted that phase one of construction will be finished by year-end.
Doron Broman, founder and CEO of Moderno Development Group, described similar adjustments at Rivr Lofts, a 352-unit building also in Fort Lauderdale. Although construction began before the Live Local Act was enacted, Moderno is now considering converting some smaller studio units into affordable options under the program. “Every project we’re looking at, we’re looking at adding a Live Local component to it,” Broman said. “Most projects don’t pencil in today. So, with the Live Local Act that gives you additional income, that means, maybe, the project will pencil in.” He added that qualifying tenants would earn up to 120 percent of area median income—about $90,000 per year—and many current residents already meet this criterion.
However, Russell Galbut of Crescent Heights pointed out challenges with mixed-income developments: “It’s really a small percentage, and that’s because you have 60 percent of your building that has to pay for the other 40 percent,” he said. “If it doesn’t work in paper and pencil, it will never work in brick and mortar.” Galbut also highlighted expedited municipal approval for projects with affordable housing components: “Time kills many great projects.”
Financing remains an obstacle for some developers pursuing mixed-income properties under the law. Peretz stated: “We see an issue with financing… But I’ve been hearing from a lot of developers with issues on that side of things.” Panel moderator Alfonso Costa Jr., chief operating officer of Falcone Group, emphasized ongoing efforts to educate lenders and agencies like Fannie Mae and Freddie Mac about these new types of deals: “Working with the takeout agencies Fannie Mae and Freddie Mac on takeouts, and then HUD as well… it’s more of an educational process.”
