Real estate in the Florida Keys is booming! The market today, for a variety of reasons, is white hot with no signs of slowing down. So why are current and prospective residents of Monroe County worried that a decades old law might change everything? In accordance with a 1972 law, Monroe County will cease the distribution of new building permits in 2023. That means no new building or development in all of the Florida Keys - period. As this building cap date looms, many are left wondering how we got here, and what implications this will have on new construction in the Keys and on the real estate market as a whole.
Let’s take a look back.
Back in 1972, the Florida State Legislature passed the Florida Environmental Land and Water Management Act of 1972. Amongst other things, the law led to the Florida Keys being labeled as an “area of critical concern” in the state of Florida with oversight needed in areas like land management and development. With the fragile and unique state of the Keys’ natural environment, the state issued a series of plans to regulate land use and development, including eventually instituting the ROGO system to slow the rate of development both for the good of the environment and for Florida Keys residents. While the ROGO system has helped to effectively slow the rate of growth in the Keys, the build out date of 2023 looms large in the eyes of real estate developers and residents still awaiting building permits. County commissioners estimate that at the time of the build-out there will be approximately 8,000 lots that could be left vacant and unbuildable. Plans are still ongoing for how the county and state will address the issue of landowners left in the lurch due to not receiving building permits by the cut off date.
Why 2023? Simply put - hurricane evacuations. Experts have analyzed the population maximum capacity permitted in order to effectively and safely evacuate all residents of the Florida Keys within a 24 hour window in the event of a major hurricane. By evaluating rates of growth over time, it has been determined that this cap will be reached in the year 2023.
So what does this mean for real estate? Anyone can see that real estate values in the Keys have sky-rocketed already. This is due partly to appreciation, partly to the pandemic, and largely due to the impending build-out in 2023. With ever increasing demand, and the already dwindling supply about to be blocked by the building cap, home values are sure to continue to increase. It remains to be seen how high values will climb as a result of the lack of supply. Additionally, some homebuyers will need to change their plans from purchasing tear-downs or vacant land to buying properties that either suit their needs now, or ones where renovations will suffice. While the law prohibits building permits after 2023, renovations and remodels will be permitted. Another option may be increased interest in purchasing ROGO lots for sale in the Keys. These lots come ready to build permit in hand. This could totally change the buying process for many prospective investors or residents and needs to be considered carefully.
With approximately 2 years to go until the building moratorium, now is a great time to purchase real estate in the Florida Keys and jump into the market before this unprecedented change takes effect and completely changes the face of the real estate market. There are many fantastic new construction homes in the Keys now that will enable today’s buyers to get a brand new property before there are no more being built!