Federal and State Premptions Changing the Housing Landscape – “Real Estate Matters” 6-27-26

For nearly 12 years, Real Estate Matters has been the voice of real estate in Palm Coast and Flagler County, Florida.

You can’t have affordability without affordable housing. The United States is short between 3.5 million and 5.5 million homes. Bowing to NIMBY voters, local governments have been reluctant to address the problem. Now, Florida and the federal government are enacting their own solutions.

Watch the Podcast and read the Show Notes below for more details.

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Be sure to check out the continually updated interactive Flagler County Map of Developments and Subdivisions.

Raw Show Notes

Our behind-the-scenes guide to the show’s flow, including topics we didn’t have time to get to on the show. This is raw and likely contains typos. Data reflects the date of the show’s recording.

Show Notes for 6-27-2026

Recorded 6-26-2026

Welcome to the tranquil side of Florida. This is Real Estate Matters, the voice of real estate in Flagler County and Palm Coast for nearly 12 years.

I’m Toby Tobin, publisher of real estate news website, GoToby.com, and a Florida-licensed Realtor with Grand Living Realty. I’m joined by Co-host Annamaria Long from the Flagler Homebuilders Association, one of our sponsors.

Thanks to Our Sponsors:

• Flagler County Home Builders Association
• Hammock Community Church – On A1A in The Hammock – Small enough to know you but large enough to serve you. North of the toll bridge with the message sign out front. It’s not just for Hammockians. Like me, many people cross the bridge.

Guest: None

June stats update (as of 6-26)

• 252 homes sold at a median price of $366,000 vs 257 at $358,445. DOM=43 vs 52 one year ago.
• <$250K – 6 sold, 4 for cash, DOM = 9
• $1M+ – 10 sold, 5 for cash, DOM = 40
• Listings – 1.166 vs 1,405, DOM = 74 vs74
• Pending sales – 375 vs 319, DOM = 50 vs 62, List price = $379380,000 vs $366,500
• GINNdex – 3.1 vs 4.4

Check out the latest article on GoToby.com. It’s a report on May results and a summary of the first 5 months, including a neat map of May home sales layered by price so you can see the effect of location on home values. The map has been viewed over 1,940 times.

Today’s Topic

Federal Housing Legislation

Congress recently passed the 21st Century ROAD to Housing Act. It represents the most significant federal housing package in decades, rolling together nearly 50 individual proposals targeting the nation’s severe supply shortage and affordability crisis.

Key Pillars of the Legislation

1. Curbing Wall Street Institutional Investors

In one of the bill’s most discussed and debated provisions, large institutional corporate investors are barred from directly purchasing more than 350 single-family homes.

• The Goal: To stop major private equity firms from crowding out families and first-time buyers in the residential market.
• The Nuance: To protect housing development, lawmakers included specific exceptions for “build-to-rent” properties and “renovate-to-rent” projects (where an investor heavily rehabilitates a home that fails local structural building codes). The bill also creates a dedicated HUD outreach resource and helpline for tenants renting from these large institutional landlords.

2. Slashing Red Tape & Streamlining Supply

The bill heavily prioritizes getting more homes built by cutting regulatory barriers and speeding up development timelines:

• Zoning & Permitting Incentives: It introduces a $200 million annual competitive grant program to reward local governments that successfully increase their housing supply by streamlining local permitting or updating restrictive zoning codes.
• The “Build Now” Act Provision: Ties certain federal Community Development Block Grant (CDBG) funds directly to housing production, offering funding bonuses for fast-moving local development.
• Environmental Reviews: It expands “categorical exclusions” under the National Environmental Policy Act (NEPA) to fast-track reviews for small, infill, and federally supported housing projects.

3. Modernizing Alternative & Manufactured Housing

Recognizing that traditional construction is increasingly expensive, the bill aims to unlock cheaper, factory-built alternatives:

• Elimination of the “Chassis Rule”: The bill updates an outdated federal construction rule that required manufactured homes to permanently sit on a steel frame with wheels and an axle. Because most manufactured homes are never moved once placed, eliminating this rule is projected to cut manufacturing costs by up to $10,000 per home.
• Modular Housing: It reduces financing barriers and updates HUD building codes to expand options for innovative modular and factory-built housing.

4. Expanding Homeownership & Capital Access

• Small-Dollar Mortgages: It creates pilot programs and reviews regulatory fee structures to encourage banks to issue small-dollar mortgages (loans under $100,000), which are traditionally difficult for lower-income buyers to secure for starter homes.
• Public Welfare Investments: It raises the cap on bank Public Welfare Investments to 20%, empowering financial institutions (especially community banks) to inject more private capital into low-income and affordable housing developments.
• Rural & Veteran Support: Preserves rental assistance for hundreds of thousands of low-income rural households and expands housing program access for unhoused or disabled veterans.

The Expert Consensus: While housing advocates and economists widely praise the bill as a massive step forward—especially in acknowledging the federal government’s role in local housing production—many note that the effects will be incremental. Because it relies primarily on cutting red tape, incentivizing local supply, and includes no new net federal spending, experts anticipate it will take several years to significantly lower nationwide housing prices.

Florida Housing Legislation

Florida’s housing landscape has been dominated by major legislative action, primarily revolving around significant 2026 expansions and updates to the state’s landmark Live Local Act (via House Bill 1389), alongside newly enacted urban redevelopment laws (Senate Bill 1434).

The state continues to aggressively leverage zoning overrides and major tax incentives to rapidly increase multifamily and affordable housing supply, while simultaneously tightening rules to protect developers from local pushback.

1. Major Upgrades to the Live Local Act (HB 1389)

Passed with overwhelming bipartisan support (98-4 in the House, 35-0 in the Senate) and taking effect July 1, 2026, HB 1389 addresses several loopholes and local conflicts generated by the original 2023 law.

• Drastically Higher Bar for Local Opt-Outs: The original act allowed local municipalities to opt out of the popular “missing middle” ad valorem property tax exemption (for units serving households between 80% and 120% of Area Median Income). Under the 2026 update, a city or county can only opt out if it proves a structural surplus of affordable housing in its jurisdiction for each of the previous three consecutive years. Because few Florida markets can meet this standard, this guarantees massive tax-saving predictability for developers.
• Building Permit “Lock-In” Protection: To eliminate political risk, tax exemption eligibility now officially vests at the moment a building permit is issued. If a local government manages to legally opt out later, any project that scored a building permit within four years prior is grandfathered in and continues receiving its tax breaks.
• Banning “Dimensional” Retaliation: Local governments are explicitly barred from using adjacent setbacks or other creative dimensional rules to bypass the state’s mandatory height and density preemptions.
• Expansion to Faith-Based Land: Live Local preemptions now legally apply to land owned by religious institutions, provided the property is larger than 3 acres and has contained a house of worship for at least 10 years.
• What’s Excluded: The new text explicitly clarifies that single-family detached home communities (like “build-to-rent” single-family subdivisions) and parcels separated by more than 200 feet do not qualify for the Live Local property tax exemptions. Farmland is also explicitly protected and excluded from Live Local multi-family zoning overrides.

2. The Infill Redevelopment Act (SB 1434)

Signed into law in late May 2026, this act targets urban core supply by stripping local zoning power over contaminated or underutilized “brownfield” spaces.

• Preemption on Blighted Land: In counties with over 1.475 million residents (such as Miami-Dade), local governments must administratively approve residential developments on environmentally impacted or brownfield parcels of at least 5 acres.
• Density Mandates: Municipalities cannot block these projects if they build up to 25 dwelling units per acre (or the average density of the surrounding jurisdiction, whichever is lower). Public hearings are bypassed entirely to prevent NIMBY (Not In My Backyard) delays.
• The Dead Golf Course Provision: (South Florida only, but a warning shot) The bill addresses a massive Florida issue by allowing the redevelopment of defunct recreational areas like abandoned golf courses. If a developer can prove the course has been closed for at least 12 months, they can convert it to residential zoning by paying double the local park impact fees and providing a 20-foot open space buffer next to existing single-family homes.

3. Financial Relief & Resilience Measures (HB 7031)

• Home Hardening Tax Relief: To offset skyrocketing property insurance costs, this bill creates a sales tax refund program running from July 1, 2026, through June 30, 2029. Homeowners can get a refund of up to $500 for installing impact-resistant windows, doors, and garage doors on primary site-built homes valued at $700,000 or less.

Notice the trend toward usurpation of local rights, a trend I warned of several years ago.

The Takeaway: Florida’s 2026 approach is intensely pro-developer, with a heavy focus on reducing entitlement risks and protecting tax exemptions to attract private capital. The market has already responded: local rent limits for 120% AMI units saw massive 9–10% year-over-year spikes in high-demand counties like Miami-Dade, Broward, and Palm Beach, heavily expanding the revenue and underwriting potential for mixed-income developments.

Wrap up:

Video podcasts of Real Estate Matters are available on GoToby.com. Click on Podcasts on the top navigation bar. Show notes are included so you can see what we didn’t get to on the show. Also, on GoToby.com – the Flagler County Interactive map of residential developments and subdivisions, updated regularly. Currently viewed over 10.800 times.

Let me be your consultant at no additional cost to you. Owners’ associations and Florida’s property tax system are often misunderstood by buyers and sellers, leading to undesired outcomes. I have served on homeowner and condo association boards and a CDD commission. I understand the world of deed-restricted communities. I also served for more than ten years on the Flagler County Value Adjustment Board.

If you are thinking about buying or selling property in Flagler County, call me first. I’ll introduce you to a highly qualified agent or builder and serve as your consultant throughout the transaction at no additional cost. Call me at 386-931-7124 or email me at Toby@GoToby.com.