Florida Follows in Indiana’s Footsteps by Pushing Bill To Loosen Land Laws and Ramp Up Starter Home Construction

Florida and Indiana lawmakers are advancing similar proposals to stop local governments from creating land-use restrictions that stifle construction of smaller starter homes.

Florida's Senate Committee on Community Affairs voted Senate Bill 948 out of committee Tuesday night, while at the same time, Indiana's House approved House Bill 1001. Both are aimed at reducing regulations around homebuilding—but are also controversial for their removal of local government provisions.

Florida's bill prohibits restrictive land development rules in an attempt to make it easier to build starter homes on smaller lots. The Sunshine State currently has the highest concentration of million-dollar home listings and the highest HOA fees. But it is taking steps to encourage more homebuilding for its surging population.

Republican State Sen. Stan McClain introduced the bill in December and it has four cosponsors: a pair of Democrats and a pair of Republicans.

"We have a shortage of housing; we've not caught up," McClain said at the Florida hearing.

Starter homes vs. "compelling governmental interest"

Senate Bill 948 curtails local government rulemaking around local land use. For instance, it generally prohibits them from setting minimum lot size requirements above 1,200 square feet. It also blocks rules setting some parking standards or complicating lot-splits.

Plus, it cuts out some of the regulations for the review process of development applications, while blocking regulations related to setbacks, lot dimension, and open space minimums. McClain said that gives developers more flexibility to build on smaller lots.

An amendment lets HOAs, condos, and co-ops create deed restrictions to opt out. It also gives more exceptions, for instance to construction involving historic properties.

The housing shortage "is caused in part by land development regulations adopted by local governments without a compelling governmental interest," which "substantially burden" property rights, the bill says.

And the public gets time to comment when cities write comprehensive plans and set their urban growth boundaries, McClain said. Starter homes and infill projects get choked by regulation in the meantime.

"This is just to try to make sure that we can continue to find ways to increase our housing stock," McClain said. "Builders are pretty good at being innovative about what kind of house they can build on that lot."

Data from the Florida Realtors show the state's average home sale price was $628,500 in December. The Realtor.com® state-by-state housing affordability report card graded Florida a C+.

"Granny suites" and duplexes

Indiana's bill targets slightly different laws but also aims to curtail local government ability to review and impose guidelines on residential projects. It passed 76-15 in the House and now heads to the Senate.

HB 1001 lets builders construct single-family residences, duplexes, some accessory dwelling units, and affordable housing on some properties owned by religious groups, all without hearings.

It would also prohibit some minimum parking requirements and also remove the ability to regulate some design elements on residential structures. HB 1001 permits mixed-use residential or multifamily residential in areas zoned for commercial use.

"There's no one single proposal that's going to bring housing to the market fast enough to solve the problem independently," said bill author Rep. Doug Miller. "What this bill says is take a wide-spread approach, offering a lot of options, defaulting to a what lot of other state have done, and look at policies that bring housing to the market the fastest."

Several county-level officials in the state say they're concerned the bill stops them from regulating development. Hamilton County's three commissioners said in a statement that the law "undermines the ability of local governments to shape the growth and development of their neighborhoods according to the unique needs of their residents."

The Realtor.com state-by-state housing affordability report card graded Indiana a B+. The state needs 50,000 units of housing to meet current demand, Miller said. He contested that it denies local control, only that it gives local municipalities more options.

Housing as a regional problem

In Florida, some homebuilders and development groups voiced support for Senate Bill 948. But other political and advocacy groups argued it harms local governance powers.

Courtney Mooney, associate director of public policy at the Florida Association of Counties, worried the bill could contribute to urban sprawl as small developments fill in. A 5-acre lot, for instance, could hypothetically host 180 1,200-square-foot lots, she said.

And the law could preempt local government zoning laws, said Rebecca O'Hara, legislative director for the Florida League of Cities. That invalidates other starter home laws, like those promoting accessory dwelling units and missing middle housing.

"This bill forces a strict residential zoning code on every city and county even if there's no housing deficit in the area," O'Hara said.

She added the bill "ignores conflicting state mandates and growth management and renders local government comprehensive plans obsolete."

Aiming at "small inane regulations"

But the law also hits at "small inane regulations" that frustrate builders. Lot width and depth are frequent complaints, said Bryan Eastman, a commissioner for the City of Gainesville. That city cut its lot size requirements to 4,000 square feet with fewer setback rules to build more starter homes.

The city has since seen a "slow turnover" of new home construction, not a "rush" of new homes, Eastman said. He supports the bill because housing is a regional issue and municipalities acting alone struggle to move the needle.

"The width of a lot, the depth of a lot, the side setbacks, things that no one thinks about outside of planning departments," Eastman said. "They have an enormous impact on what you can build within that. And the larger the lot that you have, the more those regulations go in, the larger the house that you have to build just to recoup your money."

Sam Staley, director of Florida State University's DeVoe Moore Center, said the measure speeds up the zoning and permit approval process. It also eases the process for manufactured housing development in the state.

"It's not just about the total number, it's, are we building the right homes, in the right places, for the right housing segments," Staley said. "Unambiguously, this bill is going to increase the number of starter homes."