Scarcity of Land and Infill Development Spur Litigation

Litigation is becoming more commonplace in real estate development, in part due to the shrinking availability of developable land in South Florida, which in turn has fostered a heightened need for, and sensitivity to, infill development and greater pushback from local officials and residents seeking to preserve the status quo in their respective communities. This, coupled with new state laws such as the Live Local Act (“Live Local” or “the Act”) – which pre-empts municipalities from regulating certain development activities – has set the stage for a rise in real estate litigation, especially with respect to land use and zoning matters.

Moreover, as Florida’s population continues to grow, so does the demand for housing. Notwithstanding this reality, some local governments are unwilling to embrace new development and appropriate increases in density. These local governments are at times implementing impermissible zoning regulations, permitting delays and moratoriums to thwart development, which is leading to an increase in lawsuits from developers and landowners seeking to protect their property rights and uphold long-standing state policies promoting growth.

Responses to Live Local Pre-Emptions of Local Land Use Controls

In 2023, the Florida Legislature boldly and decisively confronted one of our state’s most pressing issues – the rising cost of housing – and through the passage of what is commonly known as the Live Local Act mandated that certain local zoning ordinances that restrict housing availability be superseded and pre-empted by state law. Faced with this clear and unequivocal directive to promote attainable housing in the state, some exclusionary jurisdictions have chosen to either ignore the law completely or assert contrary positions to delay and thwart its clear intent.

The Live Local Act aims to address the state’s affordable housing crisis by pre-empting certain local government regulations to facilitate the development of affordable housing. The Act (as strengthened during the 2024 legislative session) overrides local zoning, density and height restrictions, allowing multifamily and mixed-use residential projects in areas zoned for commercial, industrial or mixed-use purposes.

Specifically, in exchange for a developer’s agreement to restrict at least 40% of a project’s units as “affordable” (ie, to households with incomes at or below 120% of the area median income) for a period of at least 30 years, the Act provides that a local government: (i) must authorise multifamily and mixed-use residential (where at least 65% of the total square footage is used for residential purposes) in any area zoned for commercial, industrial (with limited exclusions) or mixed use; (ii) may not limit the density of a development below the highest residential density permitted in the jurisdiction; (iii) may not the limit floor area ratio (intensity) of a development below 150% of the highest floor area ratio permitted in the jurisdiction; (iv) may not restrict the height below the highest height permitted for either commercial or residential development within the jurisdiction within one mile of the proposed development or three storeys, whichever is higher (with limited exceptions for properties surrounded by single family communities); (v) must provide either a partial reduction or full parking elimination for properties within a certain proximity of transit facilities or transit-oriented development areas; (vi) may not require zoning or land use changes, special exceptions or conditional use approvals, variances or comprehensive plan amendments to obtain the height, density or use benefits provided for under the Act; and (vii) must administratively approve a proposed project if the zoning code and comprehensive plan provisions applicable to multifamily development are met.

In response, some local governments have expressed concerns regarding the Act’s pre-emption of their traditional land use authority. As of 6 March 2025, several legal actions have been initiated in Florida concerning the Live Local Act, including the following noteworthy cases:

1. Condra Property Group v City of Hollywood (2025)

This lawsuit, filed by Condra, challenges the City of Hollywood’s rejection of a 17-storey, mixed-use project with 282 condominiums and apartments and about 35,000 square feet of commercial space. The developers argue that the City improperly applied height restrictions by rejecting the nearby Margaritaville Resort as a height benchmark and incorrectly determined that special zoning district heights do not apply to Live Local. The case is ongoing.

2. Bal Harbour Shops, LLC v Bal Harbour Village (2024)

Bal Harbour Shops proposed to construct three high-rise towers atop the luxury shopping centre, including 600 residential units. The lawsuit alleges that the Village violated Live Local by stonewalling the proposed development and adopting provisions not found in the Act to impede the project. In September 2024, a Miami-Dade County Circuit Court judge denied the Village’s motion to dismiss the lawsuit, allowing the case to proceed.

3. Walden Lake, LLC v City of Plant City (2023)

This dispute centres on the City of Plant City’s refusal to consider a preliminary plat for a project consisting of 470 townhomes and 1,530 apartments under Live Local. The City rejected the application, stating the site was not located in a commercial, mixed-use or industrial district. The City amended its zoning code to exclude golf courses as a qualifying use. Walden Lake contends that golf courses should qualify for administrative approval under the Act. The ongoing lawsuit, filed in 2023, seeks clarity on whether the intent of the Legislature in enacting the Act prevails over the City’s zoning interpretation.

4. Pasco County legal threats

Although not a lawsuit, the Pasco County Commissioners voted in early 2024 to take legal action against developers attempting to use Live Local to build apartments on land not zoned for such purposes. This pre-emptive stance reflects the pushback in some jurisdictions against the Act’s provisions and the pre-emption of home rule authority, highlighting the tensions between state mandates and local zoning authority.

Tactics Used to Thwart Live Local Projects

Amending development standards

Some jurisdictions have amended their land development regulations and zoning codes to reduce allowable density, height and floor area ratio and limit the scale of developments under Live Local. Others have redefined zoning designations or challenged the Act’s eligibility in districts based on nomenclature rather than the underlying intent in creating the district, thus thwarting the Act’s intended impact. Additionally, some jurisdictions have introduced equivalency or proportionality provisions between affordable and market-rate units or requirements for specific uses, such as including a grocery store or high-end commercial.

In response, Florida’s Attorney General issued an informal opinion on what constitutes mixed-use zoning. The Attorney General concludes that while the name of a zoning classification helps identify whether an area fits into the “mixed use” category, it is one factor to consider among several, including local historical context and practices, land use and development regulations, and the provisions of the comprehensive plan.

Adding processes to curtail the “administrative” review requirement

Some jurisdictions have circumvented the Act’s administrative approval requirement by adding procedural reviews, such as design compatibility assessments, expanded site plan evaluations or pre-approval public comment periods. These steps functionally reintroduce discretionary oversight and delay approvals, undermining the Legislature’s intent to streamline workforce housing development.

Ad valorem exemption opt-outs

Live Local tax exemptions incentivise affordable housing and increase project feasibility. However, some jurisdictions have opted out of these exemptions, reducing financial incentives and deterring development.

Policy and implementation

Many jurisdictions have been slow to release or adopt policies for Live Local projects. Some have enacted moratoriums to “provide time” to amend their codes to account for the Act. Others, as noted, have amended standards to be less favourable to Live Local and, in some cases, violate the Act by refusing to approve projects administratively.

FLUEDRA – An Alternative Dispute Resolution Tool

In addition to local government resistance to housing development through the enactment of anti-development land development regulations, developers also face increasing opposition from “not in my back yard” (NIMBY) individuals who aggressively oppose real estate or infrastructure developments in their neighbourhoods. NIMBYs typically apply political pressure on their elected officials to arbitrarily deny development applications through political campaigns and opposition at quasi-judicial public hearings.

While traditional litigation is effective in addressing this opposition, it can be expensive and time-consuming for both the taxpayer and the developer. One alternative dispute resolution process is the Florida Land Use and Environmental Dispute Resolution Act (FLUEDRA). Enacted by the Legislature as part of the Bert J. Harris, Jr. Property Rights Protection Act, FLUEDRA provides a means for landowners to compel state agencies and local governments to mediate disputes if they believe a development order is “unreasonable or unfairly burdens the use of the owner’s real property”.

Much of the initial burden in the FLUEDRA process, which imposes strict timelines, is placed on local governments, which must forward a FLUEDRA request to a special magistrate within ten days, and respond to a petition within 15 days – making it an effective tool for landowners to expedite a mediated resolution. If mediation fails, an informal hearing is held before the special magistrate, where evidence and testimony can be presented and public input is received. At the conclusion, the magistrate issues a non-binding recommendation, forcing the government entity to accept, modify or reject the recommendation during a public meeting.

FLUEDRA offers numerous advantages, including tolling the time to file litigation and avoiding duplicative application processes. Importantly, FLUEDRA does not create a judicial cause of action for third-party challenges. Due process is ensured through public hearings before finalising agreements, and property owners can ultimately initiate litigation if FLUEDRA fails to achieve a desirable outcome. By promoting communication and collaboration, FLUEDRA can save time, money and frustration for property owners and local governments alike.

Re-evaluating Impact Fees in the Wake of Sheetz v County of El Dorado

Impact fees have long been a key mechanism for local governments to fund public infrastructure improvements by requiring developers to contribute toward the costs associated with new development. In Florida, these fees typically pertain to water, wastewater, stormwater management, roads, mobility, parks and recreation, public safety, libraries, public art, government facilities, schools, inclusionary housing and various in-lieu fees. Despite widespread application, many impact fee programmes have operated with minimal challenges – until now.

A recent US Supreme Court decision in Sheetz v County of El Dorado has shifted the landscape, furnishing developers and property owners with new legal arguments to challenge excessive or unjustly structured impact fees. The ruling affirms that such fees must withstand constitutional scrutiny, so local governments now face heightened pressure to justify their fee structures or risk legal and financial repercussions.

The Sheetz ruling: a constitutional check on impact fees

The Sheetz case originated when a property owner in El Dorado County, California, sought to build a single-family home. The county imposed a USD23,420 traffic impact fee as a condition for obtaining building permits. Arguing that the fee amounted to an unconstitutional government “exaction” under the Fifth Amendment’s Takings Clause, which requires the government to provide just compensation when taking private property, Sheetz challenged its validity.

In a unanimous decision, the Supreme Court sided with Sheetz, ruling that legislatively enacted impact fees must be evaluated under the same constitutional standards as any other exaction. This landmark ruling overturned California precedent and emphasised that merely enacting a fee through legislation does not exempt it from constitutional scrutiny.

The dual rational nexus test and Florida’s legal framework

Following Sheetz, impact fees assessed at the development review stage must satisfy the established dual rational nexus test, which mandates:

• An essential nexus between the fee and a legitimate government interest tied to land use.
• A proportional relationship between the fee amount and the actual impact of the proposed development on public infrastructure.

Historically, legal challenges to impact fees in Florida have not been considered violations of the federal Takings Clause. However, the ruling in Sheetz provides a new opportunity for such claims and increases legal exposure for local governments. While Florida’s Constitution allows for challenges to impact fees as unauthorised taxes, plaintiffs are not entitled to damages or attorneys’ fees. This might explain why litigation on unjust impact fees has been somewhat limited.

Florida has also adopted requirements to impose procedural safeguards on the enactment and administration of impact fees. With the Sheetz ruling in play, local governments that fail to align their fee programmes with constitutional and state-level legal standards may face significant financial liabilities, including mandated refunds and legal expenses.

Looking ahead: a call for impact fee reform

In addition to the threat of new legal challenges, cities and counties may have to repay fees deemed excessive or unjustified, leading to unexpected budgetary constraints. The ruling in Sheetz signals a critical moment for local jurisdictions to reassess their impact fee policies and highlights the importance of legal counsel when reviewing and evaluating impact fee obligations, not just for developers and property owners but also for local governments.

As the landscape evolves, local governments and developers should proactively assess impact fee structures to avoid costly disputes. A balanced approach today can lead to more equitable infrastructure funding solutions while minimising the risk of future litigation.

Florida’s Condominium Crisis and the Legal Ramifications

Florida’s statutory scheme governing condominiums has also undergone reform in the last few years, the impact of which is now being felt throughout the condo market. In the wake of the Surfside tragedy, the state implemented more stringent recertification procedures for buildings over 30 years old, which is approximately 75% of Florida’s condo stock. The new laws also require associations to perform periodic structural integrity reserve studies (SIRS) and eliminate an association’s ability to waive reserves to fund structural components inspected during the SIRS.

The increased regulatory burden has led to financial distress for many condo associations, with an estimated 15% of Florida condo buildings at risk of insolvency due to new reserve funding requirements.

Residents in coastal buildings have been acutely affected by these new reserve and recertification requirements, which are often more costly for condos located along the waterfront, where corrosion and wear from the elements accelerate deterioration and the need for concrete restoration.

Faced with six-figure special assessment and the reality that their building may be reaching the end of its useful life, condo unit owners and association boards are more routinely turning to condo terminations as a solution. While state law provides a legal framework for terminations, differing interpretations of a condo’s governing documents, evolving case law and disputes over valuation, minority owner rights and redevelopment plans have led to increased litigation in this area of the law. In fact, Florida saw a 35% increase in condo termination disputes between 2021 and 2023, and that trend is likely to continue in the year ahead.

In sum, the availability and affordability of housing in Florida will continue to define the landscape for real estate litigation throughout the state, with local government resistance to state pre-emption, eminent domain battles and condo-related disputes being a few of the driving forces. The outcomes of these cases will not only define Florida’s approach to growth but also set important precedents for other states grappling with similar challenges.