TALLAHASSEE — A development boom is brewing under the radar of Floridians distracted by deteriorating real estate values and record foreclosures.
The state is processing an unprecedented number of proposals for new homes and commercial development. If approved, these projects could pump more than 600,000 rooftops onto a market suffering from a surplus of product and slowdown in population growth.
Also on developers' wish lists: the right to build a half-billion square feet of nonresidential space.
Such pipe dreams might seem laughable in today's depressed economy and moribund housing market. But property owners with an eye on the future are spinning plans that have the potential to unlock hundreds of thousands of agricultural and environmentally sensitive acres to residential and retail development over the coming decades.
Mike McDaniel, a planner at the state's Department of Community Affairs for 22 years, finds the surge stunning.
"Instinctively, most people would think there would be a slowdown,'' he said. "And it may be true at the other end, where the developers apply for the permit (to build). But there's been no letup here. It's a gold rush."
McDaniel said landowners, eager to turn dirt into money, are behind the push for a record number of new planned communities. Regardless of whether these megaprojects become reality, the owners stand to win.
"They want to get the land use change, strike it rich, then move off to where there are not a lot of people,'' he said.
But where will that leave Florida?
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McDaniel's office at DCA is in a cluster of state office buildings on the southeast edge of Tallahassee. Down the road, a sprawling apartment complex offers a month's free rent. For sale signs dot lawns nearby. Inside DCA's offices, regulators are poring over developers' plans to put more inventory in the pipeline.
McDaniel came to DCA more than two decades ago. Now the 57-year-old chief of comprehensive planning is on the front line, riding herd over the hundreds of projects submitted for state review. His staff of about 30 must analyze huge planning proposals and report back to cities and counties within 60 days. It has been working out to an average of about two rulings a day.
"My nose is so close to grindstone, I don't look up," he said. "We used to see plans calling for 400 and 500 homes and think, 'Woo-woo, big deal!' Now those numbers have quadrupled."
Among the proposals on deck for review at DCA on just a single recent morning:
• Plans for the town of Edgewater, south of New Smyrna Beach, to double in size by jumping Interstate 95 and annexing 5,181 acres. The project, "Restoration," would put 8,500 housing units and 3.3 million square feet of nonresidential space on land that includes wetlands, agriculture and bear habitat.
• Fellsmere, a crossroads of about 4,000 in Indian River County and home of the Fellsmere Frog Leg Festival, has annexed about 22,000 acres of farmland for 42,000 homes.
• Wildwood, known for the clogged junction of I-75 and the Florida Turnpike, has stretched its north-south boundaries 15 miles, snapping up empty parcels with plans for up to about 87,000 new homes.
• Bunnell, a burg of 2,000 in Flagler County, has annexed about 80,000 acres.
McDaniel points to a satellite map of Flagler and St. Johns counties that shows plans for four projects totaling more than 20,000 homes and 7-million square feet of nonresidential space. "My jaw dropped when I saw this,'' he said.
"Can there possibly be this much need? And is this area really suitable for this intensity of development?"
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The planners at DCA see themselves as gatekeepers of the state's growth management laws. Now there's a sense inside the department that the sentries are being stormed at the gate.
Florida's legislators, eager to jump-start the economy, have proposed everything from eliminating the oversight agency to carving out exemptions for bigger and bigger sections of the state.
Landowners and developers, meanwhile, are taking advantage of the lull to push ahead with approvals so they'll be ready to move at the slightest sign of an uptick. It's not cheap to change an orange grove's potential use from agricultural to residential, but it's a great investment.
"Your property value goes way up,'' said Charles Gauthier, DCA's director of community planning. "Land with an urban designation is going to sell for a higher amount than land with a rural designation."
Another factor behind the deluge of requests for land use changes? Developers' fear that the Florida Hometown Democracy amendment will pass in 2010. It would give local residents, not just municipal or county officials, the right to vote on land use changes in their neighborhoods.
"We hear from large landowners all the time that they just want to get their property entitled before Hometown Democracy goes into effect," McDaniel said. "They say, 'We might not do anything with this land for 50 years, but we want these entitlements now!' "
While the rest of his staff enjoyed the Easter weekend, McDaniel was preparing DCA's response to the mother of all development dreams, a plan to transform tiny Yeehaw Junction in Osceola County into Destiny, a city of 100,000 homes.
"I keep asking, 'Why me? Why now?' " McDaniel said. "It's daunting."
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In Gainesville, veteran economist David Denslow analyzes what has happened to Florida's real estate market in the past and tries to predict what's coming in the future. Figuring into his projections are the impacts of everything from rising property taxes to falling timber prices.
Denslow said he never considered the possibility that, in light of the current downturn, a glut of new projects would be under review at the DCA. When the department recently pulled together data on all major developments pending and approved since 2007, the totals were staggering: projects covering 410,126 acres, with a potential for 630,965 new homes and 479.5 million square feet of nonresidential space.
"This really catches me by surprise," said Denslow, who is with the University of Florida's Bureau of Economic and Business Research. "I'll have to revise my thinking."
He understands developers reacting to a perceived threat like Hometown Democracy. "We saw a little bit of the same phenomenon before the growth management laws first went into effect in 1985, when there was a huge surge in permits," he said.
Also, what local public official would reject a developer who dangles promises of new tax revenues? "It's hard to find a city or county that's antigrowth these days," he said.
Denslow fears that the behind-the-scenes gold rush will doom Florida to relive its past. His assessment: When migration to Florida picks up again, newcomers will find affordable housing aplenty. Existing Florida homeowners, on the other hand, can kiss goodbye any dreams of cashing out big on their homes.
"In the 1980s, Florida had a huge increase in population but house prices, adjusted for inflation, didn't rise at all because the state and counties had been very friendly to development," Denslow said.
"Now nobody in their right mind, even an amateur flipper, could look and say that (housing) prices are going to double in the next 10 years. Prices just won't go up all that much when you've got that number of projects in the pipeline."
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The spigot on that pipeline is controlled by the DCA, which can send plans back to the local authorities for revisions or reject the project outright. Most often the two sides hammer out an agreement.
"I always think the truth will out. That's nice to think, but money can buy a lot of expertise," said McDaniel, who often finds himself the only one in khakis in a roomful of suits.
One such showdown took place this month, when Haines City officials flew up to DCA's offices, two lawyers in tow. The city, well known as one of the last restroom breaks off I-4 before Disney, had proposed big changes for property just outside municipal limits.
Sitting in on the meeting was DCA Secretary Tom Pelham. A lawyer and certified planner, Pelham rejoined the agency in 2007 after having led it from 1987-91 under Gov. Bob Martinez. As one of Haines City's lawyers argued, Pelham rocked back, eyes closing, waiting for an opening. Then he pounced.
"Your plan is meaningless until you annex the land," Pelham said, citing chapter and verse in the law. "This is not something you can casually ignore or it will become a precedent that will spread across the state. And there's a lot of interest in avoiding the land use process."
Karen Brodeen, a lawyer for the city, cut to the chase: State approval would allow development to start the minute annexation is complete. "If we have to reapply, that will add another 10 months," she pleaded.
Pelham wouldn't budge.
State planners also are holding the line on plans for more houses in Pasco County. Recently the DCA sent back a project for revision that could put 4,500 homes on cattle land south of State Road 52. Regulators point out that Pasco already is drowning in an oversupply of housing units approved but not built: 277,983 units to be exact.
About 8,400 of those lots are in the stillborn community of Connerton, immediately adjacent to the rejected development.
Started in the boom but stalled by the bust, Connerton promises a work/play environment, according to its Web site, with a shiny new clubhouse, playground and retail space. What's missing are the people. The lights are on, but only about 230 families call Connerton home.
"We're facing the same challenges everyone else is," said Stewart Gibbons, president of Connerton. "But I can't disagree that there's an awful lot of residential approved and planned for Pasco."
At the DCA, McDaniel is considerably more blunt. He said that if Pasco stopped approving new housing today, the county could accommodate new residents through 2035 — and still have more than 90,000 empty homes.
But McDaniel has learned that open spaces in Florida, whether they're in cattle or crops, are often treated as little more than a placeholder.
"Many people seem to believe that agriculture is temporary; that someday the land will be developed for housing," he said, saying that kind of thinking led to the quick-flip behavior fueling the last real estate boom. "A lot of that is the bubble mentality."
For Jennifer Seney, an environmental activist who lives in Wesley Chapel, overdevelopment is not an abstract threat. In her Pasco neighborhood, about one-third of the houses are for sale. Home prices are down 27 percent from a year ago. The Cypress Creek well field, on which Seney's home depends for water, is bordered on all but one side by residential development. Now the county wants to put more than 4,000 homes on the untapped portion.
"It's like we can't win against this force of money and greed," Seney said. "I'm just sitting here waiting for my well to go dry."
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If DCA accepts a land use change, that doesn't mean it becomes a reality. Financing, local site planning and market forces determine whether a project comes to fruition.
Dan Molloy, a land use attorney and developer in Tampa, said people shouldn't be too worried about grandiose plans.
"I could go around the state and pick out lots of different areas and you'd almost laugh about the densities (of development) proposed that are never going to happen," he said. "They'll never be marketable for practical purposes."
But having witnessed the last real estate boom, regulators and environmentalists are reluctant to hand planners a big blank check, assuming it will never be cashed. Once the state approves a land use, only local authorities can initiate a change.
"If there was ever a time for the state to catch its breath, look into the future and decide what's in the best public interest, now is the time,'' said David Guest, managing attorney of Earthjustice's Tallahassee office.
"Instead what's happening is the same syndrome that brought us to financial panic: More money for me, regardless of the future consequences. That leads long term to an unworkable community. It's about as crazy as you can get."
McDaniel fears that if Florida green-lights the huge developments pending, the state will repeat the mistakes of the 1960s and '70s,when places like Lehigh Acres and Cape Coral were platted with subdivisions that stood vacant for decades.
He's stumped when people say Florida's economy has suffered because growth management laws restrained development. Said he: "I thought just the opposite."
Times staff writers Craig Pittman, James Thorner and Lisa Buie contributed to this report. Kris Hundley can be reached at [email protected] or (727) 892-2996.