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Business Observer Thursday, May 7, 2009 13 years ago

Urban Shift

It may not have been by divine inspiration, but the most time consuming, costly development rules that bedeviled developers and promoted sprawl over urban areas are no more — overwhelmingly.
by: Jay Brady Government Editor

It may not have been by divine inspiration, but the most time consuming, costly development rules that bedeviled developers and promoted sprawl over urban areas are no more — overwhelmingly.

And at the 11th hour on the last day they streamlined growth management.

After an unusual amount of back and forth even for the Legislature, the House went along with one final amendment by the Senate, gave up on a couple of its own, and passed “The Community Renewal Act.”

By amending the state growth management laws, the bill eliminates a major development hurdle in already dense urban areas, known as traffic concurrency, which requires developers to ensure the entire area around their development can handle increased traffic.

The new law also removes the cumbersome and expensive development of regional impact (DRI) process from those urban areas and extends most existing state and local permits for two years. The permit extension is a significant savings for all builders and developers holding permits that they'd rather delay acting on until the market rebounds.

The bill's approval was the final action taken late May 1, the last day of the two-month regular session. Only the budget and the joint conference committee bills were to be taken up during the extended week of the two-month session.

The Senate sponsor of SB 360, Sen. Mike Bennett, R-Bradenton, puts the importance of the legislation in perspective this way: “It's the biggest and best growth management bill we've seen in years.”

The legislation was a response to state planning laws that some experts claim are some of the most complex and burdensome in the country. And some economists point to the state's and local governments' development regulations, particularly in Florida and California, as the underlying cause of the real estate meltdown that led to the recession.

Jay Clarkson, President of the Florida Home Builders Association, calls the bill “a commonsense approach to creating incentives that promote responsible development in urban areas, thereby reducing sprawl.”

The House approved the final bill on a 78-37 vote. The Senate approved the bill 30-7 making it virtually veto proof.

Streamlining bloat
As the recession was getting under way in February 2008, problems that business groups attributed to the state planning act caught the attention of the state's top planner, Department of Community Affairs Secretary Tom Pelham.

At a planners' conference that month, he called the state growth management laws “a huge, bloated piece of legislation.” And while it may be just about as huge as ever, it is clearly a little less bloated.

Adding to the drive to streamline the regulations is the faltering economy. As noted by Sen. Don Gaetz, R-Fort Walton Beach, for every 10% increase in the cost of business, 160,000 jobs are lost. That was Gaetz's argument in Senate floor debate on the workers' compensation bill repeating the testimony of a group of economists before the Senate Select Committee on Florida's Economy, which Gaetz chaired.

There's little doubt that the myriad of growth management laws, rules, plans, codes and regulations has a steep cost for businesses and workers. A major Gulf Coast developer's representative calls the current laws “obsolete.”

The concerted effort in the Legislature to streamline the state's burdensome development rules led to the tug-of-war of back and forth amendments between the House and Senate.

Four versions of the bill produced no less than 33 amendments offered in the committee process, and another 31 amendments were brought on the fly as the bill hit the House and Senate floors over the last week of the session. Three other growth management bills further complicated the debate.

In Florida, at least, the major issue revolves around a sprawl-inducing planning concept known as “concurrency.” The idea is that before development may be permitted, the developer must show that facilities, such as roads, sewers and school seats, will be in place at about the same time as a project is completed.

Pelham repeatedly acknowledges that the concurrency laws have encouraged sprawl rather than a more compact form of urban development that law drafters had originally envisioned. The reason: more suburban and rural areas have more available road capacity.

And where there's more capacity available there's usually a faster path to final project approval. So, it typically makes more economic sense to build closer to where facility capacity is already in place and thus away from the urban core, Thus, sprawl.

So ironically, the concurrency rules have clashed head on with the state's own urban policy as expressed in the very first sentence of the state's “Growth Policy Act,” which reads, “Fiscally strong urban centers are beneficial to regional and state economies and resources, are a method for reduction of future urban sprawl, and should be promoted by state, regional and local governments.”

Exceptions no longer exceptions
In 2005, the legislature adopted major amendments to the state's growth management laws when, in a quirky pair of coincidences, the bill had the same number, SB 360, and was also the last bill acted on that year.

This year, at the urging of Bennett near the end of Senate debate on May 1, the Senate agreed to meld affordable housing legislation into the Senate bill and sent it back to the House for final approval. Rep. Gary Aubuchon, R-Cape Coral, sponsored the affordable housing bill.

The key provision of 2009's growth management bill is designed to address the concurrency problem by designating, and making mandatory, so-called transportation concurrency exception areas (TCEA) in dense urban areas. Since 1995, these areas have been optional strategies for local governments to encourage urban infill and redevelopment, but have produced only 31 of them including in eight communities along the Gulf Coast.

The new concurrency exception areas will include cities that have an average population of at least 1,000 people per square mile and at least 5,000 people total. Cities like St. Petersburg, Tampa, Sarasota and Fort Myers are on the preliminary list as would be expected, but so too are smaller cities like Punta Gorda and beach towns Madeira Beach, Longboat Key and Marco Island.

The exception areas also include designated urban service areas in counties that, with their cities, have an average population of at least 1,000 people per square mile, and counties that have a population of at least 900,000, but do not have a designated urban service area. That qualifies Hillsborough and Pinellas counties, respectively. Counties with a population of at least one million, such as Hillsborough and Orange, are also defined as dense urban areas.

A preliminary list provided to the Gulf Coast Business Review by the Senate Community Affairs Committee office shows 237 cities and eight counties that meet the bill's definition of dense urban areas, including 32 cities along the Gulf Coast. There are 477 cities and counties in Florida.

More local governments may also be granted exceptions from transportation concurrency requirements for projects that promote public transportation or have designated areas for infill development, redevelopment, or downtown revitalization.

Consumers helped too
Developments up and down the Gulf Coast should benefit considerably if not immediately.

Sarasota Memorial Hospital may likely benefit down the road with future plans for expansion, according to attorney Dan Bailey of the Williams, Parker, Harrison, Dietz and Getzen law firm in Sarasota.

And he says that the stalled Bayside development on U.S. 41 in downtown Sarasota may be able to reconfigure its development in a way that could make it more marketable without having to design their project to meet DRI square footage or condo unit thresholds.

Dave Goodwin, economic development director for the City of St. Petersburg says electronics component manufacturer Jabil Circuit, which has been in the process of reviving its DRI petition that expired Jan. 1, now won't have to re-file because the two-year permit extension applies retroactively to Sept. 1, 2008. A new Tampa Bay Rays stadium could also benefit in avoiding DRI review.

Goodwin agrees with Bailey when he says the law “will definitely create flexibility for developers. There are different options you can use,” he says, adding, “A developer can rescind a development order or continue to use it.”

Developer Henry Rodriguez, who doesn't have any current projects that directly benefit from the legislation, still calls it “a great bill” and says, “It goes in the right direction to streamline development.”

Rodriguez, developer of Villages on the Trail, north of Venice, understands the agony many developers like him have gone through to get projects through multiple layers of bureaucracy. He says, “It's something that needed to be done because it often took three to five years to get things done and the cost of goods ultimately gets passed down to the consumer.”

And that may be key to the primary purpose of the bill, to stimulate economic development that in turn puts people back to work and more money in the pockets of consumers.

The hope is that the new law should spur demand for the existing housing stock and increase property values. Another benefit is summed up by Goodwin: “The state role is being lessened no question about it.” All that should make local governments happy along with developers.

Keys to new growth law

The Legislature finds that the existing transportation concurrency system has not adequately addressed the transportation needs of this state in an effective, predictable, and equitable manner and is not producing a sustainable transportation system for the state. The Legislature finds that the current system is complex, inequitable, lacks uniformity among jurisdictions, is too focused on roadways to the detriment of desired land use patterns and transportation alternatives, and frequently prevents the attainment of important growth management goals. (SB 360)

Key bill provisions:
• Designates transportation concurrency exception areas in dense urban areas;
• Streamlines state review of local comprehensive plans;
• Allows zoning changes to be considered along with plan amendments;
• Extends state and local permits and development orders for two years with exceptions;
• Exempts developments from the Development of Regional Impact review process in dense urban areas with exceptions;
• Allows waiver of state certified job creation projects;
• Extends time to comply with school concurrency and capital improvement element financial feasibility requirements by three years to December 2011;
• Allows charter schools and certain portables to meet school concurrency requirements;
• Removes the 90 days notice requirement for local governments to decrease, suspend or eliminate an impact fee;
• Clarifies the non-taxable revenue bond allocation process by removing an exception to the Florida Housing Finance Corporation for the use of the state allocation pool;
• Expands the ad valorem tax exemption for affordable housing properties.

At A Glance

Possible dense urban area designations:
Treasure Island
St. Pete Beach
Redington Beach
Madeira Beach
St. Petersburg
New Port Richey
Safety Harbor
Temple Terrace
Pinellas Park
Holmes Beach
Belleair Beach
Ft. Myers Beach
Fort Myers
Marco Island
Cape Coral
Longboat Key
Plant City
Bonita Springs
Punta Gorda
Pinellas County
Hillsborough County

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