Florida Senate President’s 2023 Workforce Housing Proposal

Published: February 9, 2023

Florida Senate President Kathleen Passidomo (Naples) has unveiled her “Live Local” Workforce Housing Proposal, Senate Bill 102, sponsored by Senator Alexis Calatayud (Miami). The 93-page bill incentivizes affordable housing development, provides over $800 million in funding (to be invested in loan programs where expended funds are recaptured), and reduces the regulatory authority of local governments. The bill aims to pave the way for affordable housing and enable Florida’s workforce to “live local” in relation to their place of employment.

As a business, a developer, an affordable housing unit owner, or a Florida resident you may be wondering – “What’s in it for me?”

I am an incorporated BUSINESS

• • The bill would create a new Live Local Tax Credit Pro-Florida gram. Businesses can contribute directly to the Florida Housing Finance Corporation to benefit the State Apartment Incentive Loan (SAIL) Program (loans to developers) instead of paying portions of their corporate and insurance premium taxes, dollar for dollar. The amount of available live local tax credits is $100 million per year.
  • The bill would increase the amount of available Community Contribution Tax Credits to $29.5 million (from $19 million) to encourage businesses to make donations toward community development and housing projects for low-income persons. The credit is 50% of an approved community contribution against any tax due for a taxable year. A corporation may receive a maximum of $200,000 in tax credits for approved community contributions each year.

I am a DEVELOPER OF AFFORDABLE HOUSING

• • The bill appropriates $259 million to bolster the SAIL Program which provides low-interest loans on a competitive basis to affordable housing developers each year. SAIL funds generally serve to bridge the gap between primary financing and the total cost of the development. The $259 million appropriation includes $150 million generated from documentary stamp taxes which would otherwise be deposited into Florida’s General Revenue fund in new recurring funds which will be available for the program each year. With more money in this program, your SAIL loan application will have a stronger chance of approval.
  • The bill sets aside up to $25 million from the Live Local Tax Credit contributions to provide loans for large-scale projects of significant regional impact. These projects must include a substantial civic, educational, or health care use and may include a commercial use, any of which must be incorporated within or contiguous to the property. The project must provide more multifamily rental units than the largest multifamily project within 30 miles by 50%. These loans are to operate like the SAIL program, on a competitive basis, through the Florida Housing Finance Corporation, and may be granted for up to 25% of the total project cost.
  • The bill appropriates $100 million for new construction projects in the development pipeline that are experiencing hardship due to material and construction cost increases resulting from market inflation. Eligible projects must have accepted an invitation to enter credit underwriting by the Florida Housing Finance Corporation between July 1, 2020 and June 30, 2022. Any funds not awarded will roll into the SAIL Program.
  • Under the bill, you can apply for a Sales Tax Refund for sales tax paid on building materials for affordable housing developments of up to $5,000 per residential unit. This sales tax refund would apply only to affordable housing developments for which construction begins on or after July 1, 2023.
  • The bill provides certainty in zoning by prohibiting a local government from requiring a zoning change from commercial or mixed use to multifamily or mixed-use residential for proposals to build a multifamily or a mixed-use residential project that reserves at least 40% of the residential units for households earning up to 120% AMI ($94,000 or less for a family of four) for at least 30 years. Height and density restrictions are based on maximum limits of nearby developments.

I am an OWNER OF AN AFFORDABLE HOUSING UNIT

• • The bill creates a “Missing Middle” Property Tax Exemption for developments that set aside at least 70 units for affordable housing which were constructed or rehabilitated within the past 5 years. To qualify for the exemption, rent for those units must be at least 10% below market rate. Tax exemptions are targeted to moderate- and low-income brackets.
  • The bill also creates a property tax exemption for land owned by nonprofits that is leased for a minimum of 99 years for the purpose of and predominant use of providing housing to persons and families within extremely-low-, very-low-, low-, or moderate-income brackets.
  • The bill outlaws government-mandated rent control. This means that upon the termination of a lease period and with proper notice to any existing tenant, a landlord can set a rental rate as high or low as he or she chooses and a potential tenant can accept, decline, or negotiate. Under the bill, a municipality or a county cannot impose controls on rents and any such ordinance would be unenforceable.
  • If your county or municipality creates the Local Option Property Tax Exemption (more details to follow) you may qualify.

I am a LOCAL GOVERNMENT

• • The bill increases funding ($252 million) for the State Housing Initiatives Partnership (SHIP) Program which provides funds to local governments as an incentive to create partnerships that produce and preserve affordable homeownership and multifamily housing.
  • The bill authorizes a county or a municipality to create a Local Option Property Tax Exemption for Lower Income Floridians by ordinance. The exemption would apply to property owners who have at least 50 units and dedicate at least 20% of them to affordable housing for those with extremely-low income, very-low-income, or both ($39,150 or less for a family of four). If all units in the development will be used for affordable housing, then the local government can exempt up to 100% of each unit from property tax; if less are dedicated for affordable housing, then the local government can exempt up to 75% of the value of the unit from property tax.
  • The bill outlaws and preempts government-mandated rent controls. This would effectively invalidate any ordinances imposing rent controls that are passed before this bill goes into effect. (See Orange County.)
  • The bill requires each county and municipality to publish online an inventory list of any real property owned by the county or municipality, or dependent-special district-owned real property within its boundaries, that is appropriate for use as affordable housing. This inventory list must be reviewed at a public hearing and must be updated every 3 years.
  • The bill requires each county and municipality to maintain a public written policy outlining procedures for expediting permits and development offers for affordable housing projects that meet specified criteria.
  • The bill prohibits a local government from requiring a zoning change from commercial or mixed use to multifamily and mixed-use residential for proposals to build a multifamily or a mixed-use residential project that reserves at least 40% of the residential units for households earning up to 120% AMI ($94,000 or less for a family of four) for at least 30 years.

I am a FIRST-TIME HOMEBUYER

• • The bill expands eligibility for the Hometown Hero Program and codifies it in statute. Under the program, a first-time home buyer who is employed full-time (at least 35 hours per week) by any Florida-based employer may apply to the Florida Housing Finance Corporation for a 0% interest loan to reduce the amount of the down payment and closing costs paid by the borrower (at a minimum of $10,000 and up to 5% of the first mortgage loan, not exceeding $35,000). The bill adds $100 million to the program and establishes that loan repayments shall be retained within the program to make additional loans.

I am a RENTER

• Ultimately, the bill takes a trickle-down approach and seeks to increase affordable housing options by making it easier and more economical for developers to develop affordable housing. The bill will incentivize developers to develop more affordable housing, and in time, low-income Floridians should have increased access to local housing options.