The Seminole County Board Of County Commissioners voted Tuesday to no longer offer tax exemptions to some developers and property owners under Florida’s Live Local Act.
The new state housing law was designed to incentivize development so that Floridians can afford to live in the communities where they work. Among its many perks, one way the law does this is by granting up to 75% in tax exemptions to apartment complex developers and owners who reserve at least 70 units that are five years old or newer for the so-called “middle class.” In other words, people making 80-120% of the area’s median income.
This is called the “Missing Middle Tax Exemption.” In Seminole County, it applies to households making anywhere from $54,080 to $81,120 a year, which often includes teachers, some government workers, and first responders.
However, a change in the law this year makes it possible for qualifying municipalities to opt out of granting these large tax exemptions.
At a county board meeting, Development Services Director Rebecca Hammock said Seminole County qualifies because they currently offer a surplus of homes for people in that demographic. Meaning, the county has more than enough available homes for people in that income level who are looking to rent and, therefore, does not need to offer large tax exemptions to attract more.
The Shimberg Center for Housing’s 2023 Annual Report shows that Lake, Orange, Osceola, Seminole area currently have 799 available rental units for people at 0-120% AMI.
Board Chair Jay Zembower said this is another case where broader state laws can trump local governments from addressing their unique needs.
“Seminole County has been caught in the overall net for the entire state because there are jurisdictions throughout the state that are not doing the things this county has been doing to foster this kind of housing,” he said.
Only three apartment complexes currently being developed were already awarded these tax exemptions last year under the new law. Those developments will be grandfathered in, as long as they keep up with requirements, which include renewing their Multifamily Middle Market Certification notices on an annual basis. These projects are Integra Crossing, Vue on Lake Monroe, and Watervue Apartments.
The tax revenue impact to the county for these was more than $370,000, Hammock said.
Property Appraiser David Johnson said the county would face “real” financial implications if it didn’t opt out. He said the county has 3,800 qualifying units adding nearly up to a potential of $900 million in taxable property value.
“The tax dollars that are generated from those 3,800 units for your general fund is over $4 million a year and for your fire fund is over $3 million a year,” Johnson said. “So, it’s real money at some point.”
These amounts do not include the taxable value of future units currently under construction.
Johnson said the county has been able to provide homes for people making 80-120% AMI without the need to use Live Local Act provisions and thus doesn’t need to lose tax revenue to provide more, particularly when it doesn’t help to acquire more of what he called “truly affordable housing,” referring to housing for people who make less than 60% AMI.
“It’s nothing that the government is doing, as far as giving exemptions or anything like that, it's market driven,” he said. “And that's what we see happening in this community, but it certainly does not address the affordable housing issue.”
Commissioner Amy Lockhart wanted to strongly clarify that this change does not affect the county’s efforts to build more affordable housing for low income households.
“We have lots of incentives and lots of things in our county to try to incentivize affordable housing. This isn’t that,” she said.
Johnson added that the sparing of tax exempted funds does not necessarily trickle down to renters but instead works more to the benefit of developers and property owners, while potentially costing the county money, so it doesn’t make sense to continue participating.
“The Live Local Act, I think, is well intentioned. The problem is it doesn’t have a requirement out there to push that 75% reduction back to the renters who are occupying those units,” Johnson said.
A handful of other Central Florida municipalities have opted out as well. On July 9, Lake County adopted a resolution to opt out, and on July 10, the City of Winter Park in Orange County followed suit.
Other jurisdictions’ leaders have also been resisting some of the Live Local Act’s measures, including Volusia County’s City of DeBary. City Manager Carmen Rosamonda said the DeBary staff is worried about how the Live Local Act can affect existing planned development contracts, density, and infrastructure improvement costs, among other things.
“You got upgrades to your water, sewer, and roads,” Rosamonda said. “We're a small city, and roads are not any cheaper in Newbury than they are in Orlando. We have 23,000 residents, [Orlando] has 2 million, and so for our community to be able to absorb the infrastructure costs, unfortunately, the residents are going to pay. And so, you end up having to raise your tax rates in order to accommodate the infrastructure improvements that you're going to have to make as a result of how large some of these projects are going to be.”
Zembower echoed this sentiment regarding the county’s general, fire, and road funds.
“In addition to shifting the burden, what everybody has to understand is, when that revenue stream does not come to the county those services are going to be picked up by the rest of the taxpayers, and it’s going to fall on their shoulders.”
The county board voted unanimously to opt out.
Lillian Hernández Caraballo is a Report for America corps member.
