Study: Affordable housing act generates gains, ‘real friction’ – Washington Examiner
A 2023 florida law called the Live Local Act, aimed at increasing affordable housing through property tax incentives and streamlined construction approvals, has generated notable progress but also challenges, according to a report by the nonprofit watchdog Florida TaxWatch.The law requires at least 40% of units in eligible projects to remain affordable for 30 years and permits multifamily development in certain zones without rezoning. So far,it has helped create 3,171 affordable units. Though, difficulties such as some local governments opting out of tax incentives-especially in counties with a surplus of affordable housing-and challenges in securing financing have limited the law’s overall impact. For example, Citrus County, despite facing a housing shortage, has not approved any property tax exemption applications under the Act. TaxWatch recommends further legislative measures including statewide tax credits and incentives to encourage developers to build more affordable homes and rental properties, aiming to enhance the law’s effectiveness and sustain affordable housing growth.
Study: Affordable housing act generates gains, ‘real friction’
(The Center Square) – A 2023 Florida law designed to generate more affordable housing has produced “real gains but also real friction,” according to a nonprofit taxpayer group.
The Live Local Act was designed to increase the number of affordable housing units through property tax incentives and streamlined approval of construction projects, according to a new report by Florida TaxWatch.
“The law requires that at least 40% of units in eligible projects remain affordable for 30 years, and it allows multifamily development in commercial, industrial, or mixed-use zones without rezoning, subject to administrative review,” the report states.
So far the law has helped builders construct 3,171 affordable housing units, says the nonprofit taxpayer research institute bills itself an independent, nonpartisan government watchdog.
However, some local governments have opted out of the property tax incentives and financing for the some projects has been difficult for developers to obtain, according to the report.
Although the law has been amended by the legislature to strengthen the law, more changes are needed, TaxWatch concluded.
“Bottom line: the Act is moving units, but opt-outs, financing friction, and uneven local execution are limiting scale,” TaxWatch said. “Sustained collaboration and targeted state incentives can convert early progress into a durable pipeline.”
In order for local governments to opt out of property tax incentives, the project has to be located in a county where there is a surplus of affordable housing. The number of available housing units for households at or below 120% of the Area Median Income has to be greater than number of residents in that income category in order to opt out of the tax breaks.
“A great many of the taxing authorities that can opt out have, in fact, opted out,” TaxWatch said.
Also, some developers are not taking advantage of the tax breaks even in counties offering them. The report cites Citrus County as an example.
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“The county is already facing a shortage of affordable housing based on its current population,” the report states. “Although this property tax exemption incentive is available to development companies, so far Citrus County has yet to receive and approve an application for the property tax exemption authorized under the Act. “
TaxWatch recommends that the Florida legislature consider creating statewide tax credits, a corporate income tax homebuilders to encourage developers to build more affordable single-family homes and a state low-income tax credit for rental properties.
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