Orange County’s Housing for All Initiative Proposes New Fees for Non-residential Developers

Local governments can impose financial or other conditions on private developments to fund infrastructure deficiencies caused by the development, but they cannot require developers to pay to fix pre-existing infrastructure problems not caused by the development.

Two ways to increase the stock of affordable housing are inclusionary zoning and linkage fees.  Under inclusionary zoning, as a condition of multifamily development approval, developers must set aside in their market rate projects a percentage of units comparable to market rate units but which are affordable to low-income renters. As an incentive to provide affordable housing, local governments can grant developers concessions like expedited approval, density bonuses, and waivers from open space, set-back, or parking requirements.

Linkage fees are charged to non-residential developers, and the revenues are used to fund affordable housing construction by putting revenues into a fund used to implement affordable housing solutions. Linkage fees result in developers sharing the cost of solving the affordable housing crisis.

Orange County’s Housing for All Initiative tasks Orange County with pursuing a Nexus Study with the City of Orlando and Seminole and Osceola Counties for a regional linkage fee, which would be assessed against non-residential development, to provide a dedicated funding source for affordable housing.

Putting aside the merits of inclusionary zoning or linkage fees, affordable housing solutions should be implemented on a regional basis because, if only one jurisdiction tried to tackle the problem alone by changing its land use ordinances and rules, it could create an economic incentive for developers to migrate to other cities or counties without similar regulations.  Developers will always travel the path of least resistance.

Orange County’s Affordable Housing Task Force anticipates submitting its Nexus Study to the Board in June.  It will be interesting to see if there is regional political will power to give this proposal traction and to see if there is push back by developers.  This news release, https://newsroom.ocfl.net/2021/02/orange-countys-housing-for-all-initiative-continues-providing-affordable-options-for-residents-despite-covid-19-challenges/, updates the community on Orange County’s Housing for All Initiative and includes links the Orange County’s studies.

Jay Small practices in the areas of condemnation, property rights and inverse condemnation, and land use.  If you have any questions about how government regulations can affect your property, contact him at (407) 425 – 9044 or by email at [email protected]

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