Ground leases have been standard tools in commercial real estate for decades. What’s changed is where they’re showing up: increasingly, community land trusts, municipal governments, and mission-driven developers across Florida are using them to keep affordable housing affordable — not just at ribbon-cutting, but for generations.
The mechanics are straightforward. A nonprofit or government entity retains ownership of the land and leases it to a developer or homebuyer, typically for 99 years. The developer builds on the land, owns the structure, and pays a nominal ground lease fee. In exchange, the land cost is removed from the equation — and with it, a significant driver of what makes Florida housing unaffordable right now.
Why This Model Is Gaining Traction Now
Construction costs in Florida have risen sharply since 2020. As of recent market data, hard construction costs for multifamily affordable housing in South Florida markets run between $250 and $350 per square foot, before soft costs, financing, and fees. Land acquisition in markets like Miami-Dade, Broward, and Palm Beach counties can add another $30,000 to $80,000 per unit or more, depending on location and zoning.
That math has made conventional affordable housing financing increasingly difficult to pencil out, even with Low-Income Housing Tax Credits (LIHTC), which remain the primary federal tool for subsidizing affordable construction. Impact fees and local cost pressures compound the problem — every additional line item makes the financial model more fragile.
Ground leases solve part of this by removing land from the cost stack entirely. When land is held by a community land trust or a municipal entity, the per-unit subsidy required to make a project viable can drop significantly, allowing limited public dollars to stretch further.
How the Model Actually Works in Florida
Community Land Trusts
Florida has several active community land trusts (CLTs), though they remain unevenly distributed across the state. The Shimberg Center for Housing Studies has tracked CLT activity in markets including the Tampa Bay area, Miami-Dade, and the Florida Panhandle, where land values vary considerably.
In a typical CLT model:
- The trust acquires land, often through donation, purchase with philanthropic capital, or municipal transfer
- A homebuyer purchases only the structure (and sometimes improvements), financing it like a conventional sale
- A ground lease governs the terms — typically 99 years, with an option to renew
- When the owner eventually sells, a resale formula limits appreciation, ensuring the home remains affordable for the next buyer
This structure produces homes that can sell at 20–40% below market value, depending on local conditions, while the trust retains the land’s long-term value.
Municipal Ground Leases and Workforce Housing
Some Florida municipalities are deploying publicly owned land through ground lease structures to catalyze workforce housing without direct cash subsidies. Riviera Beach’s investment in workforce housing projects reflects this approach — the city committed nearly $3 million toward a workforce housing initiative, with land control playing a central role in reducing overall development costs.
Ground leases in this context let cities direct where affordable units get built, maintain long-term oversight over affordability restrictions, and recover the land if covenants are violated — protections that simple cash grants or fee waivers cannot offer.
The Trade-offs Buyers and Developers Need to Understand
Ground leases are not a clean solution. They carry real trade-offs, and buyers entering CLT homeownership models need to understand them before signing.
For buyers:
- Resale restrictions limit wealth accumulation compared to market-rate homeownership
- Financing can be more complicated — not all lenders are familiar with CLT structures, though Fannie Mae and Freddie Mac have developed CLT-specific guidelines
- Ground lease fees, while typically nominal ($25–$200/month in many Florida CLTs), are a recurring obligation
- The 99-year lease is long, but buyers should review renewal and termination provisions carefully
For developers and investors:
- Lenders and equity investors may require additional due diligence on the ground lessor’s financial stability and the lease terms
- Exit strategies are constrained — you don’t own the land, so your options on resale or refinance are more limited
- Monitoring and compliance requirements tied to affordability covenants add administrative overhead
None of these concerns are disqualifying. They’re structural realities that require preparation.
Where Ground Leases Fit in the Broader Florida Housing Picture
Florida’s affordability challenge is severe and well-documented. As of recent data, median home prices in the Miami metro exceed $600,000, and even markets like Orlando — where home prices reached record levels in April despite high mortgage rates — have pushed ownership out of reach for households earning median wages.
Ground leases won’t replace traditional affordable housing finance. They require a patient, well-capitalized land holder willing to absorb the political and administrative complexity of managing a long-term lease portfolio. Scaling them requires sustained municipal will, philanthropic capital, or state support — none of which is guaranteed.
What they offer is permanence. A deed restriction might expire. A LIHTC unit’s affordability period typically runs 30 years. A properly structured ground lease, by contrast, keeps a unit affordable in perpetuity, regardless of what happens to the surrounding market. In a state where land values have appreciated dramatically and show no sign of reversing, that permanence has real value.
What to Watch — and What to Do
Ground lease structures are not yet widespread across Florida, but activity is accelerating in markets where land scarcity and cost pressures are most acute: South Florida, the Tampa Bay corridor, and Central Florida’s urbanizing suburbs.
If you’re a buyer considering a CLT home purchase, request the full 99-year ground lease document before making any decisions — don’t rely on a summary. Have a real estate attorney review the resale formula, the renewal terms, and the conditions under which the trust can reclaim the land.
If you’re a developer or investor evaluating ground lease structures, underwrite the lease terms as carefully as you would any title issue. The financial advantage of reduced land cost is real, but only if the lease documentation and the land holder’s financial position can support a long-term lender relationship.
The broader trend is clear: as development costs remain elevated and traditional subsidy sources stay strained, land ownership — and who controls it — is becoming one of the most consequential variables in Florida’s affordable housing equation.