Options to avert chaos

Will All Development End in the Keys by 2023? (part 4)


#1 How we got to this point (Sept. 27, 2018)
#2 The hurricane evacuation model’s influence on development (Oct. 4, 2018)
#3 What the “takings” lawsuit might look like (Oct. 11, 2018)
#4 Options to avert chaos (Oct. 18, 2018)
#5 In conclusion … (Oct. 25, 2018)

In a little more than five years, new development will come to a grinding halt in the Florida Keys. At least, that is what the State of Florida has decreed for the islands it has designated an “Area of Critical Concern.” Beginning in 2023, it will no longer issue NEW building permits for Keys municipalities. None. Zilch. Zip. Nada. If this comes to pass, what happens next? Will landowners sue because the state (and local governments) is gutting the value of their investment by preventing them from building their dream home on their vacant lot? Will that raise taxes? What will happen to real estate values? Will builders be out of business? The ramifications are wide and far-reaching. The future starts now.

By Frank Greenman& Sara Matthis

Last week, the installment detailed the most-talked-about, and worst case scenario come 2023 when the state no longer allows new development in the Keys — the takings lawsuits. Using the high side of the equation, there could be as many as 10,000 buildable lots left in the Florida Keys. In 2018, the average lot cost is $200,000. The value of the buildable lots, then, is approximately $2 billion in 2018.

If there is no policy change between 2023 and now, it is likely the affected property owners would sue the state and local governments for an illegal taking of their property, and obtain judgments. If the state refuses to contribute to the settlements, then local governments would be subject to collection. In this case, local governments could raise taxes, reduce services, and borrow money to pay the judgments and the Keys fall into a feudal/dependent status with the state for minimum services, while high taxes stifle investment and harm business and property owners. Yikes.

But nature abhors a vacuum and a couple of factors could change the landscape before 2023. The first is the new census scheduled for 2020. Much of the rate-of-growth restrictions are based on population and demographics. The second is the new state leadership that will be put in place in the midterm election next month.

Scenario No. 1: Buy ’em out

Working on the plausible assumption that property owners who can’t build would rather be bought out than have to sue and await an iffy outcome, the county could step up its land-buying efforts. Since 1988, the Monroe County Land Authority has spent $100 million buying both conservation and affordable housing plots. The state also makes funds available through the Stewardship Act and the Florida Forever program. The result is a large reduction in the number of affected property owners, and a more manageable risk to tax dollars.

The other option is what’s called accessory use, or as the county calls it “less than fee.” The properties remain on the tax roll, but government purchases and retires the building right. Property owners can leave the lot vacant for privacy, or get permits for secondary uses such as a garage or pool.

A flexible addendum to this program would be setting aside certain tracts of land that could support residential growth, and trading rights on this tract for properties that can’t be built on in the rest of the county.

Alternate scenario No. 2: It’s the state’s problem

When 2023 rolls around, local governments could continue to issue permits in defiance of the state. If the state wants to stop building in the Keys, the theory goes, let the state enforce it. This also may reduce the liability exposure of local governments, which would not be taking a property owner’s right to build. However, the state may not sit idly by while this hot potato gets passed to them. The state could sue the local governments to enforce its sovereignty, and also obtain a judicial determination of the Keys governments’ liability in the taking cases.

Alternate scenario No. 3: If it ain’t broke, don’t fix it.

For more than 30 years, local governments have improved building codes, enforced environmental restraints, and otherwise followed a state-approved comprehensive plan. The 2023 moratorium, imposed in 1992, is increasingly out of date and arbitrary. With the improvements in sewage, storm water regulation, transportation, and hurricane preparedness, there is no need for the draconian prohibition on building. The state could lift the rate-of-growth restriction that would stop all new development, and continue to manage the time-release of new building allocations.

Alternate scenario No. 4: Fix the evacuation model

If the state is going to premise a building moratorium on efficient hurricane evacuation, then the need for a better model is paramount. There is a wide gap between the reality of hurricane evacuations and the hurricane evacuation model used as a growth management tool. As the current evacuation model calculates 3,500 persons evacuated per hour, and the number of vacant lots is estimated to be somewhere between 3,500 and 10,000, it would only take 1 to 3 hours more (based on the evacuation models used) to evacuate if all unimproved property were developed. As the evacuation model is severely flawed (100 percent evacuation, inflated population, inadequate evacuation data), the additional evacuees may fold into existing plans without any effect on public safety.

Alternate scenario No. 5: More “gifts”

The state’s gift of an additional 1,300 affordable housing allocations — awarded after Hurricane Irma — reduced the scale of the crisis facing the Keys. Not only does it provide an avenue to build new affordable housing that meets hurricane code, it also prolongs the moment the Keys run out of building allocations, even if they are only “beneficial” in that a property owner who wants to build a mansion may be legally satisfied with an affordable, deed-restricted building right. The most recent gift of affordable building rights issued by the state comes with “strings,” such as different evacuation requirements and ownership stipulations. Whether or not these can be enforced is currently in question, as is the state and local governments’ will to enforce such rules.

— Frank Greenman is a retired general land use attorney living in the Florida Keys. He practiced for 38 years, as well as was one of the first councilmen elected to the City of Marathon, established in 1999. Sara Matthis is the editor of the Weekly Newspapers.

Please send your thoughts and comments about this issue to [email protected]. Comments will be gathered and published, as space permits, with the author’s name and hometown. All of the articles will be available at keysweekly.com as they publish.

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