Governor Ron DeSantis signed House Bill 1389 on June 26, 2026, adding affordable housing financing to the land-use discrimination rules in the Florida Fair Housing Act and waiving sovereign immunity for civil actions under that law. This policy shift, known as Live Local 4.0, took effect July 1, 2026, and lets developers sue local governments under the Florida Fair Housing Act, claims a 2024 appeals court ruling had barred on sovereign immunity grounds.
Changes to Sovereign Immunity
Under the new legislation, municipal attorneys can no longer use sovereign immunity to shield local governments from fair housing lawsuits. The law amends the Florida Fair Housing Act to waive sovereign immunity for local governments when developers allege land-use or permitting discrimination based on affordable housing designations.
This legislative fix stems from a legal battle in Broward County. Pompano Beach rejected Coral Rock Development Group's affordable townhome project, which relied on affordable housing financing, then approved a similar project on the same site by a different builder that agreed to a covenant barring affordable housing there, HousingWire reported. Coral Rock sued in 2021. On December 4, 2024, the Fourth District Court of Appeal ruled in City of Pompano Beach v. Coral Rock Development Group, LLC that the state's Fair Housing Act did not waive sovereign immunity, leaving the developer without a legal path to pursue damages.
After the signing, Coral Rock principal Michael Wohl said the case had sent a message across Florida that affordable housing could be blocked without consequence, adding, "That ends today," HousingWire reported. With HB 1389, local governments that discriminate against projects because of affordable housing financing face civil-rights liability in court.
Mandatory Religious and Public Land Expansion
House Bill 1389 transforms the "Yes in God's Backyard" initiative from a voluntary local option into a mandatory statewide zoning preemption. Local governments must administratively approve qualifying affordable housing projects on land owned by religious institutions, bypassing local zoning boards.
To qualify for this mandatory path, the religious institution's property must exceed three acres and contain an active house of public worship operating for at least 10 years. Developers must also restrict at least 40% of the residential units as affordable or workforce housing for a minimum of 30 years.
The law also opens public parcels owned by counties, municipalities, and school districts to affordable housing development. To bypass local zoning on these public lands, the public entity must co-apply with the private developer. This provision allows school districts and cities to convert vacant school board land and underutilized public parcels into workforce housing without undergoing lengthy public zoning reviews.
Guarantees for Developers and Tax Incentives
Developers gain regulatory and financial certainty under Live Local 4.0. The law bars local governments from using dimensional setbacks or stepbacks to limit the allowable height of a qualifying Live Local project. This prevents municipal boards from forcing stepbacks on upper floors to restrict high-density buildings.
The bill provides financial security to lenders and developers by locking in property tax exemptions early. Property tax exemptions for middle-market units vest when the city issues the building permit, for permits issued on or after July 1, 2026. The exemption vests for four years, according to Bilzin Sumberg, which lets developers underwrite tax savings with more certainty before starting construction.
The law restricts the ability of local taxing authorities to opt out of the 75% ad valorem tax exemption for middle-market units targeting families earning 80% to 120% of the area median income. Previously, a city could opt out if it proved a local housing surplus for one year. Now, taxing authorities must show an affordable housing surplus for three consecutive years to opt out. Legal reviews by firms like Bilzin Sumberg outline detailed breakdowns of these guidelines.
Municipal Responses and Legal Challenges
South Florida municipalities are challenging the state's zoning preemptions. On June 25, 2026, the Miami City Commission voted unanimously to approve a resolution directing City Attorney George Wysong to explore legal challenges to the Live Local Act. The resolution instructs Wysong to examine home-rule authority and municipal due process while exploring options to join existing statewide lawsuits.
Other Florida counties have already taken direct legal action. Hillsborough County filed a lawsuit in Leon County Circuit Court on March 6, 2026, challenging the constitutionality of the Live Local Act on the grounds that it violates municipal zoning authority. The state moved to dismiss the case on April 22, 2026, according to Stearns Weaver Miller.
Cities are testing the limits of the law in court. In March 2026, Broward County Circuit Court Judge David A. Haimes ruled in favor of the City of Hollywood against developer Condra Property Group. The developer wanted to build a 17-story beachfront tower using the nearby Margaritaville resort as its height benchmark. Judge Haimes ruled that because Margaritaville sits on a property zoned for government use, the developer could not use it to establish height limits for private land. Condra said it planned to appeal, The Real Deal reported.
In contrast, in May 2026 Hollywood commissioners voted to let Related Group move forward under the Live Local Act with a tower on city-owned beachfront land at 1301 S. Ocean Drive, The Real Deal reported. The 30-story project calls for 210 residences, 126 luxury condos and 84 workforce apartments, according to South Florida Sun Sentinel reporting republished by Gov Law Group. A Hollywood resident and a nonprofit sued the city and Related on June 23, 2026.
Sources
- Becker: Florida HB 1389 (2026), the latest evolution of the Live Local Act
- Florida Housing Action Lab: Clarifying Florida's Fair Housing Act
- Florida Senate: HB 1389 (2026) bill page
- Fourth District Court of Appeal: City of Pompano Beach v. Coral Rock Development Group (PDF)
- The Real Deal: Broward judge sides with Hollywood in Live Local Act lawsuit (March 31, 2026)
- Bilzin Sumberg: HB 1389, latest update to Florida's Live Local Act (June 29, 2026)
- HousingWire: Live Local 4.0 becomes law
- Florida Senate: HB 1389 (2026) bill summary
- The Real Deal: Residents sue over Related Group's Hollywood Live Local tower (July 7, 2026)
- Gov Law Group: Lawsuit aims to stop private condo on public beachfront in Hollywood
Related reading: Prop 40 Wealth Tax Is a Nov. 3 Ballot Measure: SoFla Impact; Palm Beach Office Construction Surges 400%.
Key Facts for Owners and Search
What does Live Local 4.0 do?
House Bill 1389, signed June 26, 2026 and effective July 1, amends the Florida Fair Housing Act to waive local government sovereign immunity when developers allege land-use or permitting discrimination tied to affordable housing financing. Developers can seek damages and injunctions in court. The change follows the Coral Rock case against Pompano Beach, filed in 2021.
What land can now be used for housing?
Qualifying affordable housing on religious institution land over three acres, with a place of worship for at least 10 years, must be approved administratively. Land owned by counties, municipalities and school districts can be used when the public owner co-applies. At least 40 percent of units must be restricted as affordable for 30 years.
What tax changes matter for developers?
For permits issued on or after July 1, 2026, the middle-market exemption vests at building permit issuance for four years, according to Bilzin Sumberg. To opt out of the 75 percent exemption for units at 80 to 120 percent of area median income, a taxing authority now needs three consecutive years of affordable housing surplus.
How have South Florida cities responded?
Miami's commission voted unanimously on June 25, 2026 to have its attorney explore legal challenges. Hillsborough County sued the state on March 6, 2026. A Broward judge ruled for Hollywood in a height dispute in March, and in May Hollywood commissioners let Related Group proceed under the Act on city-owned beachfront land.
What should owners confirm?
Whether a parcel qualifies, how the local government is applying HB 1389, and whether pending cases could change the rules. Because the law and the litigation are still moving, check with a land-use attorney and the city planning office before relying on the summary here, and watch for rulings in the Hillsborough and Hollywood cases.
