Sen. Pres. Kathleen Passidomo’s legislation would nix rent control policies, add $100M for hometown heroes and “tackle this complex issue from all angles.”

TALLAHASSEE, Fla. – In breaking news on the Florida legislative front, Florida Senate President Kathleen Passidomo unveiled her comprehensive legislative approach to addressing Florida’s affordable housing crisis, Senate Bill 102. The bill will be considered during the 2023 session of the Florida Legislature. To become law, it must be passed by the House and the Senate and signed by Gov. Ron DeSantis.

The effort is called “Live Local” and Passidomo says it’s based on her goal to create housing opportunities that allow workers to live near where they work. The bill, sponsored by Miami-Dade Senator Alexis Calatayud, is a 93-page piece of legislation that tackles the affordable housing crisis from several angles.

Passidomo and Calatayud held an hour-long press conference Thursday morning to announce the bill and answer questions. The press conference was recorded and can be viewed online.

“This is a transformative piece of legislation,” says Florida Realtors® Vice President of Public Policy Andy Gonzalez. “Not only does it allocate hundreds of millions of new dollars to the state’s affordable housing programs, but it does so in a balanced way, prioritizing both homeownership and rental opportunities equally.”

Gonzalez notes some highlights, such as an additional $100 million for the Hometown Heroes Housing Program (HHHP) while also eliminating the occupation-specific requirements and increasing the maximum loan amount by $10,000. On the rental side, it offers a $1.5 billion, 10-year investment in the State Apartment Incentive Loan (SAIL) program through a new recurring general revenue allocation of up to $150 million a year.

For 2023, the bill allocates $252 million to the State Housing Initiatives Partnership (SHIP) program, $259 million to SAIL and $100 million to the HHHP, for total 2023 affordable housing funding of more than $600 million.

It also includes another one of Florida Realtors’ legislative priorities – the elimination of rent control policies being enacted by local governments. Rent control causes instability in housing markets, which drives developers away and decreases the amount of an area’s available rental inventory. The bill removes the ability to enact rent control policies that would work against state and local government efforts to increase affordable housing inventory.

“All too often housing is stereotyped as a challenge for those living at the lowest income levels, when in reality, finding attainable housing options close to local jobs is a challenge impacting our broader workforce and also our seniors,” said President Passidomo when introducing the bill.

“The Live Local plan we are unveiling today is the product of my discussions with stakeholders over a number of years. With their advice and input, we are tackling this complex issue from all angles – from incentivizing private sector investment, to increasing state funding, to common sense reductions in regulations. This plan will improve options for both homeownership and affordable rental units in communities across our state.”

Major SB 102 workforce housing provisions

  • Increases record funding for housing programs: SB 102 continues historically high funding for both the State Apartment Incentive Loan (SAIL) and State Housing Initiatives Partnership (SHIP) Programs, maintaining statutory language that prohibits sweeping these funds to general revenue. Based on the current documentary stamp estimate, a total of $252 million is appropriated to the SHIP program. For the SAIL program, the total appropriation is $259 million, which includes $150 million in new recurring funds (discussed further below).
  • Redirects documentary stamp funding from general revenue to workforce housing: A portion of documentary stamp funding always transfers to general revenue. SB 102 provides $1.5 billion over 10 years for new rental units by transferring up to $150 million a year in documentary stamp tax revenue to the SAIL Program instead of general revenue. The transfer is in addition to the current statutory distribution of documentary stamp funding to affordable housing programs, mentioned above. The SAIL Program provides low-interest loans on a competitive basis to multifamily affordable housing developers. These funds generally serve to bridge the gap between primary financing and the total cost of the development.
  • Incentives for innovation and renovation of older properties: The bill directs additional funds appropriated on top of traditional SAIL funding to be used for innovative projects focusing on mixed-use, urban infill or developments near military installations in Florida. The bill specifically incentivizes construction of new projects near existing workforce housing units to facilitate rehabilitation of older rental units. For example, when new affordable units are created, community residents can move from an older unit to a newer one. Older units can then be rebuilt or substantially renovated with minimal disruption for current residents.
  • Supports Homeownership for Hometown Heroes: SB 102 broadens Florida’s Hometown Heroes Program that the Legislature created in 2022 and was backed by Florida Realtors. It dedicates an additional $100 million to the program and expands eligibility to all of Florida’s hometown workforce. This new language makes down payment assistance available to all of the state’s community workforce, including teachers, health care workers, law enforcement, service members, and workers in all other fields.
  • Increases community contribution tax credit program limits: The bill increases the annual amount of available tax credits to $25 million (from $14.5 million), further encouraging Florida businesses to make donations towards community development and housing projects for low-income persons.

Major SB 102 provisions that encourage private-sector investment

  • Creates new partnership with businesses to help fund workforce housing: A new corporate tax donation program gives businesses an opportunity to contribute directly to the Florida Housing Finance Corporation (FHFC) to benefit the SAIL program instead of paying portions of their corporate and insurance premium taxes – up to a total of $100 million per year.
  • Creates sales tax refund for building materials: The bill provides for a refund of up to $5,000 per unit for sales tax paid on building materials for developments financed through FHFC, providing additional capacity for loans in the program.
  • Provides assistance for workforce housing projects in the pipeline: In order to help projects under development experiencing unexpected hardships in starting construction, the bill appropriates $100 million in the current fiscal year to provide additional gap financing through a competitive application process. This funding will help bridge the financing gap and ensure necessary affordable units are completed. Any funds not needed for this assistance will be used for the SAIL program.

Expanding workforce housing options through new incentives

  • Creates “missing middle” property tax exemption: The bill creates a tax exemption for developments that set aside at least 70 units for affordable housing. Tax exemptions are targeted to moderate- and low-income brackets:
      – Up to 80% AMI unit = 100% tax exemption for the unit (approximate income level of $62,650 for a family of four)
      – 81% up to 120% AMI unit = 75% tax exemption for the unit (approximate income level of $62,651 to $94,000 for a family of four)
      – In addition to meeting affordable housing requirements (rent and income limits), rent for the set-aside units must be at least 10% below market rate.
  • Authorizes local option property tax exemption for lower-income Floridians: SB 102 allows counties and municipalities the flexibility to offer, through ordinance, a property tax exemption to property owners who dedicate units for affordable housing at extremely-low-income, very-low-income, or both (50% AMI or below, which is $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. Eligible developments include both new and existing developments and must have at least 50 units and dedicate at least 20 percent for affordable housing.

Reducing regulations, providing transparency to promote housing

Promotes workforce housing options in latent commercial areas: The bill promotes the development of affordable multifamily housing in commercial and mixed-use areas. It does so by reducing certain regulations 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. The local government may not require a zoning change to accommodate the residential use. Height and density restrictions are based on maximum limits of nearby developments, and a development must otherwise still comply with all applicable state and local laws and regulations.

Prohibits government-mandated rent controls: The bill removes provisions in current law allowing local governments to impose rent control under certain circumstances and forbids rent control under all circumstances.

Encourages use of public property for affordable housing: The bill requires local governments to publish online the inventory of local government-owned property that may be suitable for development of affordable housing to make the information more accessible. To encourage local governments to consider using the suitable property for affordable housing, the bill also sets forth best practices to consider when using such property, and requires technical assistance currently provided to local governments to include information on facilitating use of public property for these purposes.

Expedited permitting: The bill requires local governments to maintain a public written policy outlining procedures for expediting permits and development orders for affordable housing projects.

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Author: marlam