Twelve-months ago the topics of the day were a Florida law that went into effect allowing teachers to carry firearms in schools, tens of thousands of Hong Kong protesters marching in defiance of a new ban on face masks at public assemblies, and a record 12 Democratic presidential candidates participating in a live TV debate in Westerville, Ohio. To cap it off, in the final months of 2019, the buzz word in preparation for the 2020 Legislative Session was “resiliency” to rising sea levels.
A lot has changed in a year, and although we still expect the Florida Legislature to move forward with “resiliency” (and maybe one day defining it), we are certain this Legislative Session and possibly a preemptive Special Session will look to address a near $3 billion budget shortfall, COVID-19 liability protections, and a surplus of issues that have risen in the aftermath of the pandemic.
In the past month, the Governor’s office and the Florida House have both reached out to FHBA inquiring what actions can be taken to keep Florida builders building. Whether it is streamlining the building permit process and increasing efficiencies, incentivizing electronic plan reviews, continuing virtual hearings, or simply fighting back local governments who look to balance their depleted revenues on the backs of builders – the issues in 2021 will not be hard to come by. Below is a quick excerpt on FHBA priority issues:
Impact Fees
As local government revenues decrease due to COVID-19 shutdowns, many jurisdictions will attempt to increase impact fees to help bail them out. Because impact fees should only be used to support infrastructure projects such as roads, water, sewer, and schools, statutorily defining infrastructure will allow us to reign in local governments who believe new construction is solely responsible for paying for and correcting all the budget deficiencies of past growth.
Luckily, last year’s HB 1339 will allow us for the first time to see, due to a new mandatory annual report provided to the Florida Department of Financial Services, a list of impact fee expenditures for every jurisdiction in our state. This will give us the ammunition necessary to continue the fight in defining infrastructure and ensuring impact fees are collected and used only for true capital projects.
Lastly, an annual impact fee cap will help delay local governments from artificially increasing the costs of homes in order to make up for their own revenue shortfalls. There are examples across the state of local governments doubling impact fees in the height of a pandemic and effectively inflating the costs of new homes during an affordable housing crisis. An annual impact fee cap will help alleviate the drastic increases in fees, give builders the security and budget predictability necessary, and prevent local governments from hindering growth.
Construction Defects Reform
The “Notice and Right to Cure” law was created in 2003 to keep claims out of the court room. An owner notified their contractor of a problem on a project, the contractor inspected it, and they together determined the best course of action through conversation. However, under current practices we see firms issuing cookie cutter 558 claims, many of which are hundreds of pages long, to contractors and their teams. Unfortunately, the notices to contractors about the alleged defects often lack specificity by using broad language and not identifying the location of the alleged defect. Additionally, offers by home builders to repair the alleged defects are routinely rejected as a small group of attorneys are looking for financial settlements instead of fixing the problem. An FHBA priority, this year we will look to clean up these trial bar invasions and restore the true intent of the Right to Cure law.
Natural gas restrictions
There are movements occurring throughout the Country, most recently in New Jersey, where the State’s Legislature is looking to ban natural gas for residential homes by 2026. This year, the construction coalition will look to address this potential government overreach and prevent the ban from occurring in the State of Florida.
COVID-19 Liability Protections
Some states have established “presumption” through Executive Orders or Legislation, which states that if an employee tests positive for COVID-19 it is assumed the employee contracted it at work. Specifically in California, where the state presumes that an employee’s COVID-19 illness is an occupational injury and therefore eligible for workers’ compensation benefits. These policies are clearly devastating for small businesses as it places fear in their decisions to reopen their doors and attempt to climb out of the recession.
This past summer, FHBA participated in a Restore Economic Strength through Employment and Tourism (RESET) task force and together developed draft legislation that will look to exempt essential businesses from COVID-19 liability and provide heightened evidentiary standards for other small businesses. I.e. a requirement to have clear and convincing evidence to establish liability, rather than a mere preponderance of evidence. Both the Florida Senate and Florida House are projected to establish select committees to address Coronavirus related concerns.
Lumber Supply
As you well know, lumber has skyrocketed from below $300 per 1000 board feet in April to an all-time high of $934 back in August due to: Lumber mills misreading the market and cutting back production, the increase of “do-it-yourself” (DIY) as Home Depot and Lowes have increased consumption, and of course tariffs. There have been talks of opening federal lands, however, depending on the election a potential solution would be temporarily or permanently ending the 20 percent tariff on lumber imports from Canada. That would drastically reduce the costs, as those tariffs have been artificially increasing the price since 2017. Unfortunately for FHBA, this issue will be decided at the federal level, however, we will continue to relay the message through our elected state officials.
Final Words
Almost every issue touches our industry one way or another. In 2020 alone, the FHBA lobbying team ensured any jurisdiction that had the audacity to use linkage fees for affordable housing, fully offset all costs to builders and developers. The team also defeated amendments that sought to use excess building permit fees for affordable housing, move monies away from apprenticeship programs, and even sought to use impact fees for affordable housing. These poor policy proposals will surely find their way on an amendment in 2021. As we head into the final days of the 2020 General Election, please remember, Florida’s 2021 Regular Session is right around the corner – convening Tuesday, March 2, 2021.