By Alex Soderstrom Staff writer, Orlando Business Journal
An attempt to fix a bureaucratic Orange County issue stalling several local housing projects has failed, creating the potential to further stall development and worsen the area’s affordable housing crisis.
During the 2020 Florida legislative session, which ended March 13, state lawmakers failed to pass a proposed amendment that would have fixed the problem.
Now the county is left to figure out another way to fix the problem. That could prove difficult due to the complex nature of the issue, which centers around the unique way Orange County handles school capacity fees, and the growing fallout of the coronavirus pandemic, which is consuming the resources and times of local government.
The issue is due to the role school overcrowding plays in the rezoning of residential developments. Projects proposed in Orange County are reviewed to determine how many students the developments likely will add to local schools — all in an effort to avoid overcrowding. If the nearby schools can’t accommodate the expected influx, developers often pay a mitigation fee that varies, based on the project’s size and housing type. The fee, which stems from a 2004 voter-approved county charter amendment, allows the school board to use this money to improve schools so it can handle more students.
The charter amendment resulted in an interlocal agreement between the county and the city governments located within it. This means any residential project in the county that impacts local schools cannot get rezoning approval from the local jurisdiction without paying the fee. Orange County is the only county in the state with this process.
But a bill signed into law last year by Gov. Ron DeSantis effectively requires local governments to give school impact fee credits to developers who pay mitigation fees, essentially negating the school capacity impact fees. As a result, the school district staff has stopped recommending new capacity enhancement agreements to the school board due to the contradiction between the county charter and the state law. And that has led to local governments stopping rezoning hearings for new housing projects in areas where schools will be impacted, thus, bottle-necking the new development.
Searching for the solution
The challenge lying ahead is the fact that there’s no easy path or clear solution.
The county and cities must come up with any changes to the process for handling capacity enhancement agreements, Teresa Jacobs, chair of Orange County Public Schools, told OBJ, noting the school board cannot make any changes itself.
And since the county cannot change its charter without voter approval — a new bill would need to be submitted.
Local groups, including the Orange County Public School Board and the Greater Orlando Builders Association, supported a new piece of legislation that would modify the original law and enable the county to process capacity enhancement agreements. But the amendment with this language was removed from a bill on March 13, the last day of the legislative session.
However, all hope is not lost.
A possible approach is the county adopting an emergency resolution that will allow the processing of capacity enhancement agreements until a more permanent solution is reached, Angel de la Portilla, president of Orlando-based government consulting firm Central Florida Strategies, told OBJ. He represents the city of Ocoee, where the $100 million mixed-use Ocoee Village Center is on hold, as an economic consultant. “Local governments must be proactive to find local solutions and not allow the economy to crumble.”
Orange County officials could not be reached for comment.
Both Orange County School Board Chairwoman Teresa Jacobs and de la Portilla told OBJ it’s possible the county will need to change its comprehensive plan to enact a change in the school capacity fee process. Lee Steinhauer, government and legal affairs director for the builders association, also told OBJ that he’d encourage the county to at least develop an interim process for the projects already in the approval process.
Meanwhile, coronavirus threatens to slow down local development across the board. The county announced on March 17 that advisory committees and boards will be postponed until at least April 15. This could jeopardize other housing developments receiving the necessary approvals and rezonings.
The virus outbreak makes this an even more critical time to help development move along, Steinahauer said. “Orange County, like so many other places, is beginning to be hit economically from shutdowns related to the coronavirus. To add on top of that a prolonged shutdown to development would be economically devastating.”
Bringing multiple parties together is needed to find a solution, said Mark Brewer, president of Orlando-based nonprofit Central Florida Foundation. “This is a great example of how the public, private and nonprofit need to work together.”
Meanwhile, at least 15 residential projects, including homes, townhomes and apartments, are on hold, according to Orange County Public School Board documents.
Some of the the halted projects include:
- Park View Preserve: A 282-unit, single-family project planned in Apopka
- Clonts Farm PD: A 72-unit, single-family development slated for Apopka
- IDI Orange PD: A 420-unit, multifamily development projected to go off International Drive
- Orangewood Apartments: A 346-unit multifamily project slated for across from Freedom High School
- Kings Landing: A 70-unit, single-family development planned near Hiawassee
Another one of those projects is Ocoee Village Center. That development would include roughly 200 townhomes and 320 apartments — a welcome addition to the region. But it’s on hold until a mitigation fee related to local schools is approved.
Until then, the area will be without more than 500 units. And they’re in-demand locally, Richard Wohlfarth, the project developer, told OBJ. “They need the housing.”
Avoiding making things worse
It’s important to resolve the mitigation fee issue, because any new hiccups that stall development worsen Central Florida’s affordable housing sector, which already ranks among the least affordable areas in the country.
The region tied as the seventh-worst city for housing affordability in a report released by Washington D.C.-based National Low Income Housing Coalition this month. As bad as that is, the ranking is an improvement from the 2019 report, where Orlando ranked No. 1.
Making matters worse, Orange County was less affordable than the historical average in fourth-quarter 2019, according to a report from Irvine, California-based property data firm Attom Data Solutions. The median home sales price is $249,900, according to the report. Central Florida’s average monthly apartment rent is $1,335, Charlotte, North Carolina-based Real Data Inc. reported.
So, the school mitigation fee issue hampering the development of new affordable housing projects just adds fuel to the fire. “It’s not a great thing, because we need to scale the affordable housing building, renovation or rescue as much as we can,” Brewer said. The housing construction holdup doesn’t help the local affordability issues, especially as home prices continue to climb and 1,500 people move to the region each week, he added.
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