As 2018 begins, the following three land use and local government trends are likely to be prominent.

Public-Private Transactions

Public-private deals by local governments grew in popularity in 2017. In a public-private transaction, a local government enters into an agreement with a private entity, whereby the private entity agrees to build one or more public facilities, such as a parking garage or new city hall, in exchange for profitable private property rights relating to the underlying public land.

Take, for example, a city that wants to build a public parking garage. As opposed to the city functioning as a developer and hiring third parties to design and build an expensive facility with public funds, in a public-private deal, the city, as landlord, may enter into a contract with a developer, as tenant, for a ground lease on the project's underlying land. At the outset of such a project, the local government typically selects a developer through a request for proposals or other competitive bidding process. Once selected, the private entity designs and builds the new parking garage at its expense, pursuant to a development agreement with the local government. Often, such projects include retail or office uses as additional revenue streams. In these cases, the developer recovers its costs and receives a return on its investment from such uses, while the city receives ground rent and a percentage of revenues.

Assuming public-private transactions are negotiated and documented in a reasonable manner, such deals can provide strong benefits to local governments and profitable business ventures for private companies. While navigating the intricacies of a public-private transaction can prove challenging for the inexperienced participant, this delegation to the private sector encourages a more efficient, higher-end, and cost-effective method of building major facilities for local governments.

Parking Requirement Reductions

​In 2017, local government officials often indicated their support for decreasing the amount of parking spaces required under applicable zoning codes. Take, for example, the city of Miami's recent approval of 275-square-foot residential micro-units, and corresponding consideration of reduced parking space requirements for such buildings. Underlying these decisions is the Miami 21 “Transit Oriented Development concept,” which allows projects built within one of the city's several TOD areas to reduce their requisite parking by upwards of 30 percent.

This support for a decrease in parking requirements is based on multiple factors. First, parking requirements of many zoning codes were adopted several years ago under different transportation circumstances. The proliferation of Uber, Lyft and other ride sharing services has led to a significant reduction in people using their own vehicles for transport. Second, traffic congestion in South Florida is at historically high levels. As a result, local governments want to create disincentives for persons to have cars.

Because the construction of parking spaces is very costly, developers often build only the number of spaces required by code. Therefore, to the extent that the number of required parking spaces under a zoning code decreases, it is highly likely that the actual number of parking spaces provided at a project will decrease correspondingly.

Affordable and Workforce Housing

​The high cost of owning or renting a home in South Florida made the topic of workforce and affordable housing a popular one in real estate development circles in 2017. The lack of affordable housing creates many problems, including inhibiting the ability of employers to recruit qualified employees. To the extent an employee cannot find housing near a potential place of employment, this lack of affordable housing creates a disincentive for accepting a job offer. In many cities, efficient mass transit helps alleviate the long-distance commutes to and from work. That's not the case in South Florida. Given that South Florida housing prices are unlikely to decrease significantly in the near future, coupled with the various issues above, local governments will likely continue to support zoning incentives for affordable and workhouse housing.

​Affordable housing is generally defined as housing affordable to families whose incomes fall below 60 percent of the area's median income, whereas workforce housing is generally defined as housing affordable to families whose incomes fall between 60 percent and 140 percent of an area's median income. Many zoning codes incentivize developers to include affordable or workforce housing as a portion of new mixed unit projects. For example, in certain city of Miami development zones, projects can earn two square feet of additional area, up to a certain percentage of height and floor space, for every on-site square foot of affordable or workforce housing provided. Similarly, many local governments, including Miami-Dade County, lower, if not entirely waive, impact fees and other costs for projects that include affordable housing. Despite these incentives, affordable and workforce housing projects—other than those funded by state of Florida tax credits—remain scarce.

Alexander Tachmes is a partner at Shutts & Bowen, where he is chair of the land use and government relations practice group of the Miami office and a member of the real estate practice group.

Josh Heller is an associate at the firm and a member of the land use and government relations practice group and the real estate practice group.