At the Douglas Enclave apartment building in Miami’s Little Havana, developer Henry Torres has reduced rents for some of the 199 units without impacting his profits. After finishing the project in 2023, Torres lowered annual rates by an average of $3,000 per unit and compensated for this reduction through a property tax break of about $4,500 per qualifying unit provided by Florida’s Live Local Act. This resulted in approximately $450,000 in savings from his total $950,000 tax bill this year.
Torres noted that the rent reductions also accelerated leasing activity at the property. “It definitely got a lot more smiles on people’s faces. I can tell you that. People are struggling right now, especially the blue collar class,” said Torres, founder of Coral Gables-based Astor Companies. “It helped us tremendously to get units rented faster.”
South Florida developers and landlords have widely adopted incentives offered by the Live Local Act, which encourages landlords to set aside workforce housing units in exchange for property tax abatements. The law applies to projects completed within the past five years that designate at least 71 units as workforce or affordable housing. Under its terms, landlords receive a 75 percent tax abatement for apartments reserved for households earning between 80 percent and 120 percent of area median income (AMI), and full relief for those renting to tenants earning less than 80 percent of AMI.
This year, at least 48 properties across Miami-Dade, Broward, and Palm Beach counties qualified for these benefits. Many buildings were not originally planned under Live Local but retroactively adjusted their designations to access tax breaks during a period when demand had slowed and costs had risen.
Matthew Scott, a land use attorney with Greenspoon Marder, explained: “Developers are looking at projects and saying, ‘Alright, property insurance is going up, property taxes are going up. How do we offset things?’ They run the math and Live Local gives the tax benefit, so that’s less money they have to pay.”
Coral Rock Development Group utilized the program after completing its Metropolitan building in Coral Springs last year by converting it from market-rate to workforce housing. The building reached full occupancy this fall with around 160 apartments available for residents earning up to 120 percent of AMI—at monthly rents roughly $350 below comparable market-rate units.
“We determined through metric analysis that we would accelerate leasing and not lose money,” said Michael Wohl of Coral Rock Development Group. “You need to lease-up faster and stabilize faster, so you can be eligible for permanent financing.”
The success of such conversions depends on whether potential rent reductions can be offset by tax savings—a scenario more likely outside high-priced coastal neighborhoods. In Miami-Dade County alone this year, most recipients of Live Local abatements were located in suburban areas like Hialeah.
Carlos Segrera from IMC Equity Group pointed out that higher-income markets like Coral Gables may not benefit as much from these incentives but added: “If the market [rent] is at $3,000 and you can lease it at $2,700 … now the pro-forma pencils.” At IMC Equity’s The Upland development in Hialeah about 80 out of 340 units qualified for abatement.
Some buildings already charged rents low enough to qualify without further reductions; Pura Vida Hialeah was one such example before being sold earlier this year.
“You are not losing money on the rents, and correspondingly you are getting the abatement,” Wohl said. “So you’d be an idiot not to.”
Affiliated Development received abatements on four properties this year without lowering rents since they were initially developed with below-market pricing; according to Nick Rojo: “It was necessary because of the dramatic spike in operating cost. Insurance doubled. Materials…skyrocketed,” he said.“It really helped offset those costs.”
Landlords must meet administrative requirements such as verifying tenant incomes using paystubs or tax returns based on guidelines set by Florida Housing Finance Corporation or local market data. There are additional challenges: major lenders do not yet recognize these abatements when calculating loan eligibility.
“Fannie and Freddie…do not recognize Live Local savings so it’s really hurt people from total financing they could get,” said Alex Ruiz from Prestige Companies.“If they were going to give me $10 million…and with Live Local I should be able to qualify for $14 million…it doesn’t matter…They [still] give me $10 million.”
While these incentives reduce revenue collected by counties and municipalities reliant on property taxes developers argue they allow continued service quality while providing needed affordability options amid South Florida’s ongoing crisis.
Lissette Calderon implemented similar measures at her No.17 Residences project in Allapattah: one-bedroom units below $2,000 per month—rates she described as rare today—were made possible through tax relief.“This has allowed us to continue to maintain the rents we were hoping…and continue that aspirational living to engines that drive our community,” Calderon said.
Torres echoed concerns about renters’ struggles while emphasizing business realities: “I have a lot of sympathy for people struggling but I have to make sure our building makes money…We have a business to run too.”
