There are several critical tenets of Florida’s Live Local Act (LLA). Chief among them is an affordability requirement for housing development projects constructed throughout the state. For a workforce or affordable housing project to qualify for benefits under the LLA, it must incorporate affordable housing units into mixed-use or multifamily developments. Incentives, including height bonuses, density adjustments, and tax exemptions, are only available to developments meeting specific requirements, and a key one is renting a portion of the units at below-market rates.

Affordability Requirements Under the LLA

The Live Local Act mandates that at least 40 percent of the residential units in qualifying multi-family developments be affordable for households earning up to 120 percent of the local area median income (AMI). This ensures that a significant portion of the units are accessible to lower- and middle-income families. Moreover, these units must remain affordable for a minimum of 30 years.

The revised act, (Senate Bill 328), clarifies that only the affordable units in a qualifying development must be rental units. The development property on the whole may include a mix of for-sale and rental products.

 How to Calculate Affordable Rates 

The Live Local Act defines “affordable housing” based on Area Median Income (AMI). This is a metric that determines the median income level for a specific geographic area. To remain compliant with LLA regulations, rent for the affordable units in your development project must be capped at a percentage of a household’s income. This is typically around 30 percent of the household’s gross income.

That means rent for 40 percent of your units must fall within this threshold. The remaining 60 percent of the units in the mixed-use development, however, can be rented at competitive market rates for the area.

When assessing affordability, first understand AMI for the specific area where your development is planned. Next, calculate rents for the affordable units in your development, which are based on the percentage of AMI. For example, if the AMI for a family of four is $80,000, the income limit for those earning 120 percent of the AMI is $96,000. The affordable rent calculation would be 30% x $96,000 / 12 months = $2,400 per month.

Contact Us at Seacoast Consulting Group with Questions

As you evaluate affordability and assess rental income potential and project feasibility under the Live Local Act, get in touch with our team at Seacoast Consulting Group. We keep close watch over changing regulations so we can advise clients on how these legislative updates will impact building projects in the tri-county area. To learn more or ask your questions about commercial construction in South Florida, call our office today at 786-433-8740.