House Bill No. 7103 – Affordable Housing, Development Review & Impact Fees, Oh My!

During the 2019 legislative session, State Representative Jason Fischer introduced and sponsored House Bill No. 7103.  The proposed bill contained language that amended various state statutes, all dealing with development in Florida.  On June 28, 2019, Governor Ron DeSantis signed the bill into law.  While the bill is not controversial, it contains language that greatly effects the development community, both on the private side and the local government side.  Here’s what you need to know.

Affordable Housing – Sections 125.01055 & 166.04151, Florida Statutes

Chapter 125 of the Florida Statutes sets forth the various parameters of county government in Florida, and section 125.01055 specifically allows counties to adopt ordinances that increase the supply of affordable housing.  Chapter 166 of the Florida Statutes sets forth the various parameters of municipal operations in Florida.  Section 166.04151 contains the same new requirements contained in section 125.01055, more fully described below.

A county or municipal “inclusionary housing ordinance” may require a developer to provide a specified number or percentage of housing units in any given development or allow a developer to contribute to a housing fund or other such alternative in lieu of building affordable housing units.  By way of House Bill 7103, if such a requirement exists, the local government must now provide incentives to fully offset all costs to the developer of its affordable housing contribution.  The incentives can include a reduction or waiver of fees (such as impact fees, see more below) or allowing the developer to utilize density bonuses or greater than normally allowed floor space in a given land us designation or zoning category.  This new provision does not apply to areas of critical state concern as defined in section 380.0552, F.S.

On another note, House Bill 7103 adds some language to Section 420.502, F.S., (the Florida Housing Finance Corporation), that seems to call for a state housing finance strategy to provide workforce housing to essential services personnel in areas of critical state concern, as designated by statute.  The language recognizes the various constraints that are hampering development and construction of workforce housing, particularly the rising costs of construction and insurance, the shortage of low-cost housing and the “dwindling availability of developable land”.  Time will tell what this statewide strategy may look like and what it will require of local governments.

Development Review – Sections 125.022 & 166.033, Florida Statutes

Like the sections mentioned above, the amendments to sections 125.022 and 166.033, F.S., mirror each other and are applicable to county and municipal governments, respectively.

This portion of House Bill 7103 imposes administrative “time clocks” on the review, processing and approval (or denial) of development permits and orders.  Within 30 days of receiving an application for approval of a development permit or order, a local government must review the application for completeness and either issue a letter stating all required information has been received or issuing a letter that specifies the application’s deficiencies, better known as a Request for Additional Information or RAI.

If an RAI is received, the applicant has 30 days to respond by submitting the required information.

Once the local government deems the application complete, it has 120 days to either approve, approve with conditions or deny the application.  If, by local governance, the development perit or order is required to be acted on through a quasi-judicial hearing, the local government has 180 days to approve, approve with conditions, or deny.  These timeframes may only be extended by mutual agreement of the applicant and local government.

Further, House Bill 7103 requires that the final action of the local government (approve, approve with conditions or deny) must include “written findings supporting” the local government’s decision.  The concept of detailed written findings of facts in quasi-judicial proceedings has long been litigated and court’s have consistently held that they are not required.  (See, Bd. Of Cnty. Com’rs of Brevard Cnty. v. Snyder. 627 So.2d 469 (Fla. 1993), holding that written findings of fact may be useful but are not required if the record demonstrates there was competent substantial evidence in support of the board’s decision; see also, Alachua Land Investors, LLC v. City of Gainesville, 15 So.3d 782 (Fla. 1^st DCA 2009)).  But the statutory amendments brought on by House Bill 7103 seem to now affirmatively require a quasi-judicial body to set forth its decision-making reasoning and the facts it relies on to reach such a decision.

From a local government standpoint, this language in House Bill 7103 is hugely important.  Some local government boards dedicate portions of their quasi-judicial hearings to findings of fact, some make specific motions, some fill out standard forms and some have their board members simply state their reasons on the record at the hearing.  Will these “forms” satisfy the new statutory language?  Will hand-written notes of board members or even the “written” minutes of oral statements at a meeting suffice?  It is doubtful that each and every local government in the state of Florida is going to produce a consistent and reliable “written findings of fact”. Which means, over time, the courts are likely going to need to shed some light on exactly what types of written findings will constitute compliance with the new laws.

A Quick Look at Comprehensive Plans

I could write an entirely separate blog detailing the ins and outs of comprehensive plans.  But who would want to read that?!  Instead, lets take a quick look at language in House Bill 7103 that amends section 163.3167, F.S.

Any comprehensive plan or land development regulation adopted from 2019 forward must incorporate each development order existing before the comprehensive plan’s effective date.  The adopted plan or land use ordinance must also not impair the completion of the previously granted development order and must affirmatively vest the density and intensity of the approved development order.

Now that is a grandfathering provision!  As a developer, if you hold a valid development permit or order that was issued prior to the adoption of comprehensive plan or land use code amendments, not only does your permit remain valid, so does your allocation of density.  This can be crucial because most comprehensive plan changes these days focus on density and intensity of future development.

Impact Fees – Section 163.31801. Florida Statutes

I could also write a blog on impact fees – the thought makes me shudder.  But House Bill 7103 makes some very important changes to local government requirements in the world of impact fees.

As you may know, local governments must provide accounting and reporting of impact fee collections and expenditures.  If the impact fees are directed to infrastructure needs, the revenues and expenditures must be accounted for in a separate fund.  Further, any administrative fees charged for the collection of impact fees must be limited to the actual costs of collection.  That is similar to the supposed connection between the amount of permit fees and the actual cost to a local government in reviewing and processing such applications.

As a result of House Bill 7103, here is what section 163.31801 now looks like:

• The collection of impact fees may not occur prior to the date of issuance of the building permit for the subject property.
• The impact fee must be “proporitionately and reasonably connected to, or have a rational nexus with” the need for additional capital facilities and the increased impact generated by the new development.
• The local government must specifically designate collected impact fee funds for use in the acquisition, construction or improvement of capital benefits for new users.
• The impact fee revenues may not be used (in whole or part) to pay existing debt or for previously approved projects unless the expenditure is “reasonably connected” or has a “rational nexus” with the increased impact generated by the new development.
• The local government must credit against the collection of the impact fee any contribution related to public education facilities, including land dedication, site planning and design, or construction. Additionally, any contribution must be applied to reduce any education-based impact fees on a “dollar-for-dollar basis at fair market value”.
• If a local government increases impact fee rates, the holder of any impact fee credits, whether granted by statute or otherwise, that were in existence prior to the rate increase, remains entitled to the full benefit of said credit. (This provision, 163.31801(6), F.S., applies prospectively and retroactively).

As it relates to affordable housing, a local government (or special district) may exempt or waive impact fee collection for development or construction of affordable housing.  Lastly, section 163.31801, F.S., does not apply to water and sewer connection fees – which many local governments have not increased in decades.

Some counties have recently worked on amending their impact fee schedules, scopes and intended uses – Clay County for instance.  This new statutory language should be closely examined before a local government implements any new impact fee programs or schedules.  And developers should take a look as well to ensure the benefits afforded the new statutory language are being included by the respective local government.

Private Provider Building Inspections – Fees, “Administrative Fees” (??), and Audits

A few quirky statutory amendments included in the House Bill 7103 language pertains to the administration and costs associated with building inspections.  First, section 553.791(1)(b), F.S., has been amended to more clearly state that a local building inspector “may not” replicate the plan review or inspection performed by a private provider, unless otherwise specifically authorized – such as in the case of an immediate threat to public safety and welfare.

Second, the text of section 553.791(2)(b), F.S., has been changed to prohibit local governments for charging an owner for building inspection fees when that owner has exercised the option of retaining its own, private provider, to perform plan reviews and building inspections.  However, the same language that states a local government may not assess such specific charges also states that a local government may charge a “reasonable administrative fee”.  There is no further guidance on what that administrative fee must be associated with, if anything, or if there are any other limitations or caps on the fee.

On the local government side, the time period for the issuance of a building permit by a local government once they receive the completed application and associated affidavit of compliance from the private provider has been reduced from 30 days to 20 days.  See, §553.791(7)(a), F.S.

Section 553.791(18), F.S., has been amended to mandate that private inspection providers may not be audited more than four times per calendar year unless it is determined by the local jurisdiction that “a condition of a building constitutes an immediate threat to public safety and welfare.”

Local Governments Beware

Along with the history of the bill’s legislative debate, there are a few other smaller changes implemented by the adoption of House Bill 7103 that can be seen here: https://www.flsenate.gov/Session/Bill/2019/07103

Local governments throughout Florida would be wise to study the above described amendments and to act accordingly.  This may require ordinance amendments, staff review changes and public notice adaptations.  The 2019 legislature clearly heard from the development community and have taken some steps to help improve streamlining development review and to create more detail to the use and accountability of impact fees.