A coalition of builders and Realtors filed suit in Florida’s Second Judicial Circuit Court in Leon County last month challenging the City of Tallahassee’s mandatory inclusionary zoning ordinance as unconstitutional. Builders and Realtors contend the ordinance violates substantive due process, is an unlawful taking, and unlawful tax.
“While inclusionary zoning was likely imposed with the best of intentions in mind, the city has effectively added a regulatory barrier that will increase the price of new home construction by tens of thousands of dollars,” said Len Tylka, Florida Home Builders Association president and a West Palm Beach builder and engineer.
Tallahassee’s mandatory inclusionary zoning requires that 10 percent of new homes in a development with 50 or more homes (single- or multi-family homes) be sold for $159,378 - despite what the actual market rate price for the new home might be. The ordinance identifies specific locations within the city where mandatory inclusionary housing is to be developed, and these areas include some of the most expensive land in the city.
“If land cost $100,000 per lot to develop, that only leaves $60,000 to cover the cost of building the home,” said Ed Dion, a Tallahassee remodeler and member of the Tallahassee Builders Association. “Logically, the only way to build and sell a house at $159,378 is to share the cost with the remaining 90 percent of market rate home buyers in an inclusionary zoned development. And that’s when home prices escalate.”
A study by Reason Public Policy, a national nonpartisan public policy organization, shows that inclusionary zoning increases the price of market rate homes by $22,000 to $44,000 per home. That’s because homes in an inclusionary zoned development are increased to subsidize the lower priced homes.
“Inclusionary zoning will result in an even wider gap between the ‘haves’ and ‘have nots,’” said Tallahassee Board of Realtors Immediate Past President Penny Herman. “Lower incomes will qualify for the inclusionary zoned homes, higher incomes will qualify for the market rate homes, but middle income families will effectively be squeezed out of realizing the American dream of homeownership.”
Tallahassee is the only city in Florida to impose a mandatory inclusionary zoning ordinance. The apparent goal is to achieve more affordable housing.
TBA, TBR, and FHBA have been among the strongest advocates for affordable housing in Tallahassee and across Florida. FHBA is one of the founding members of the Sadowski Coalition that helped to establish Florida’s Affordable Housing Trust Funds - one of the country’s premier affordable housing programs. The trust funds, which derive funding from fees on all real estate transactions, provide the City of Tallahassee and Leon County with dollars for their affordable housing programs.
Additionally, FHBA members in Tallahassee and throughout Florida are among the most active builders of Habitat for Humanity homes, and have adopted Builders Care programs in Tallahassee and across Florida.
Plaintiffs on the lawsuit include the Tallahassee Builders Association, Florida Home Builders Association, Tallahassee Board of Realtors, DeVoe Moore, and Ed Dion.