JACKSONVILLE — The impacts of the recession have been widespread and deep in Florida’s commercial real estate industry, but those who have survived this long may be in for some relief from new state legislation.
Four new state bills will go into effect July 1 that will impact the real estate development industry — exempting densely populated communities from certain processes, expediting some permitting processes, diminishing the standard of proof and shifting the burden of proof off the developer. Another bill was approved during the 2009 legislative session, but must be put on a ballot for final approval.
Bob Rhodes, an attorney at Foley & Lardner LLP, said the state Legislature has deferred strategic money matters to take a tactical stance on stimulating the economy by helping the commercial real estate industry.
“The state Legislature is trying to give the building community encouragement to continue building,” Rhodes said. It is “trying to prime the economic pump for the building community.”
Rogers Towers PA land use attorney Wyman Duggan said that collectively, these bills will help developers who already have financing in place on projects that are ready to start construction, saving them possibly millions of dollars. But it doesn’t address the largest issue facing the industry today: a lack of available financing.
“It’s going to make almost as much of a difference as a governmental action can make in Duval County,” Duggan said.
Rep. Lake Ray, R-Jacksonville, said the Legislature’s goal was to remove potential hurdles to development, and while the legislation doesn’t directly address the issue of financing, it does reduce the amount of time developers would need money while developing a project and offers financial relief in the form of fewer fees.
“We can’t control the banking industry, but the things we can control, we should,” Ray said.
Not everyone agrees that the bills are in the best interest of Florida residents. Hometown Democracy organizer Janet Stanko said she’s opposed to any legislation eliminating permitting or streamlining permitting processes. Hometown Democracy is an advocacy group for a constitutional amendment that would put changes to local comprehensive plans in front of voters.
Overall, Stanko said of the legislative session, “it was a ruinous year for the environment and for those who want to control growth responsibly.”
Senate Bill 360: This bill, which was signed into law June 1, will give developers in well-populated communities the opportunity to be exempt from paying concurrency fees, which fund road, school and other types of improvements needed to handle new development. The bill also exempts those communities from going through the Development of Regional Impact process for projects that would have a large impact on the area and allows those projects to go through an expedited review for Future Land Use Map Amendments, which are required to change the land use classifications.
House Bill 73: Requires the Department of Environmental Protection and water management districts to adopt programs to expedite permit processing for certain economic development projects.
House Bill 227: Changes the burden of proof for challenged impact fees from the developer, or the entity applying, to the government.
Duval County does not impose impact fees, but other surrounding counties in the metropolitan area do, though several have suspended them. Before the bill’s passage, the developer’s burden of proof was a very difficult standard to meet.
House Bill 521: Diminishes the former, more stringent legal standard for petitioners to meet when challenging tax assessments from clear and convincing evidence to a preponderance of evidence. Although petitioners will have a better chance of winning assessment challenges, Duval County Property Appraiser Jim Overton said it will cost local governments more money to defend themselves in lawsuits.
Senate Bill 532: Last year the Legislature limited the maximum annual increase in the assessed value of nonhomestead property to 10 percent. This new bill reduces the maximum annual increase in the assessed values of those properties to 5 percent. This bill must be put on the ballot for a vote before it is enacted. It also requires the Legislature to provide an additional 25 percent homestead exemption for people who have not owned a principal residence during the past eight years. If voters approve it in November next year, the bill would go into effect Jan. 1, 2011