In Tampa Bay, institutional investors are not holding back capital in hopes of lower prices or improved sentiment. Instead, the extended timeline from land purchase to certificate of occupancy is making it almost impossible to underwrite new projects with confidence, according to Bill Eshenbaugh, founder of Eshenbaugh Land Company. Delays in permitting, regulatory changes, and rising costs are causing many investors to pause, as assumptions made at the time of acquisition quickly become outdated.
“If you close on a deal with me this month to build apartments, you’re not going to be able to offer rentals till sometime in 2028,” Eshenbaugh says. “What’s the market like in 28? Rents up, rents down?” This uncertainty is more than a planning headache – it fundamentally alters the economics of land development in one of Florida’s fastest-growing regions.
The Million-Dollar Permitting Burden
Rising permitting costs and protracted approval timelines are now the norm in Tampa Bay. Eshenbaugh explains that the regulatory process routinely takes 24 to 36 months before developers can begin site work, with expenses escalating along the way. “I’ve got one deal right now that’s about 2,000 lots,” he says. “My buyer’s gonna spend a million and a half dollars in the zoning and the permitting process. You’re going to take up to three years to get it done.”
He breaks down the process: “If you want to buy raw land today and take it through to permits, it’s 12 to 24 months, depending on the jurisdiction and the condition of the property. To get it zoned, another 12 to 18 months, probably to get all permits ready to disturb dirt.”
For multifamily developers, these delays compound risk. Interest rate assumptions made at the time of purchase are likely to be outdated by the time construction begins. Projected rents may change, and construction costs often increase during the waiting period. By the time the units are ready in 2028, the market environment may look nothing like the initial forecast.
The Regulatory Ratchet Effect
Regulatory requirements are not only numerous but also unpredictable, further complicating development. Eshenbaugh describes how counties are expanding land set-asides for water retention. “Every time you ship an acre for that purpose, over and above what we’re currently doing, it’s just an expense.” He estimates that each acre dedicated to water retention now costs an additional $40,000 to $100,000 in lost developable land value.
Recent flooding has also led to stricter elevation requirements. Eshenbaugh cites a case where a home previously built at a five-foot elevation must now be rebuilt at 17 feet: “That’s 12 feet of fill. Fill dirt has to be mined somewhere, permitted first, then mined, trucked to the site, and compacted. It just adds a lot of cost to it.” These regulatory changes, often made after land is acquired, can fundamentally alter project feasibility and erode returns for developers and investors.
The Jurisdictional Arbitrage Problem
Political differences between neighboring counties have forced developers to chase more favorable regulatory climates, creating uneven growth patterns and new risks. Eshenbaugh points to Hillsborough County’s anti-growth commission, elected in 2018, which effectively halted new approvals. “They were pretty much ‘we’re not going to approve anything for the time being,'” he says.
This stance redirected demand to Manatee County, where approvals were easier to obtain. “Builders—buyers will drive 20 miles. We overran that in the last seven or eight years with almost every big property going to contract, going into development, with thousands of lots to come in that corridor.” As a result, Manatee County now faces a potential oversupply in certain areas, illustrating how regulatory arbitrage can create boom-bust cycles within the same metropolitan region.
The Team Assembly Tax
In addition to direct permitting and regulatory costs, developers must assemble specialized teams to navigate Florida’s complex approval environment. Eshenbaugh details the scope: “You have to have that team in place with the engineers, the architects, the planners, the soil technicians, the eagle watchers, and the gopher tortoise experts and all the critters and creatures and wetlands and everything else you have to deal with out there.”
This expertise represents a high fixed cost that must be absorbed before any dirt is moved. For institutional investors unfamiliar with Florida’s regulatory landscape, Eshenbaugh warns that these barriers to entry are real. “If somebody walks in and thinks they can buy a lot of land, they’d better know how much of it’s wet, how much is floodplain. Do I get utilities anytime soon? Do I have to make many improvements to it to handle traffic? Do I have to install major traffic intersections with lights and lanes and all that stuff that is expensive?”
Navigating the Extended Timeline
Eshenbaugh’s firm now takes a proactive approach, ensuring potential buyers understand the extended timeline and the associated risks before committing. “We want to know where the money is before we spend a lot of time with you. Show us your funds before we spend six months with you and find out you can’t get the money.”
For institutional capital entering Tampa Bay, Eshenbaugh says local knowledge is crucial: “For an investor, they need somebody like us to help guide them, understand where the pitfalls are, what the political scene is.” This guidance includes political access, which Eshenbaugh says is necessary to stay informed: “I can’t tell you how many checks I write every year in the political process. I don’t buy any influence. I just bought access to be able to talk to somebody.”
Looking Ahead
It remains unclear whether these extended timelines and rising costs are a temporary phase or a new normal for Florida development. For now, institutional investors face a stark reality: the gap between land acquisition and project delivery has become so wide that market conditions at closing may bear little resemblance to those at lease-up. Projects underwritten today carry risks that are difficult to quantify, making development in Tampa Bay a high-stakes calculation where timing, regulation, and local expertise determine success.
