Florida has an affordable housing crisis. Will new legislation fix it?

TALLAHASSEE — For years, as the cost of buying a home or renting an apartment has risen faster than in most other states, Florida legislators have not made it a priority, routinely diverting millions from the fund devoted to financing affordable housing.

That changed this week, when the Legislature passed the state’s most meaningful housing legislation in decades.

Lawmakers passed a record $711 million plan to build affordable housing, incentivize new construction through tax breaks and offer interest-free loans to help Floridians afford down payments.

Republicans call it a market solution to a growing problem that threatens the state’s economy.

In Tallahassee and around the state, the reception hasn’t been as enthusiastic.

Renters looking for immediate relief are likely to be left waiting for new units to be built. Democrats have criticized the bill’s ban on rent control, and others have questioned how effective the changes will be.

But nearly everyone seems to agree that the legislation is a positive step toward addressing a long-overdue crisis.

“Two years ago, if the Legislature had come up with a bill that had $700 million-plus for affordable housing, you would have got down on your knees to thank them,” said Mark Hendrickson, a board member of the Florida Housing Coalition who has been at the center of the state’s affordable housing efforts since the 1980s.

“And now we’ve got a bill with $700 million and a bunch of other stuff, and you nitpick it. It’s like, get real here.”

“Change the mindset”

Florida built hundreds of thousands of new rental units between 2012 and 2021, but lost nearly 277,000 units with monthly rents below $1,000, according to the University of Florida.

That has placed a squeeze on Floridians, with more than half of all renters paying at least 30% of their income on rent, a 2021 report found. Housing is considered affordable when it costs less than 30% of a family’s gross income.

Miami-Dade County Mayor Daniella Levine Cava declared a state of emergency in April 2022 due to housing conditions. President Joe Biden’s top housing chief called Miami the epicenter of the country’s housing crisis that June.

But since 2001, GOP lawmakers and governors have diverted more than $2 billion in tax dollars assigned to creating affordable housing units and spent it on other things.

Communities across the state have also fought the creation of affordable housing over what Senate President Kathleen Passidomo said are outdated perceptions that affordable housing is ugly or will increase crime. For instance, the Seminole City Council voted down a proposed complex for disabled residents and veterans last year after residents complained of potential crime and traffic.

Passidomo, R-Naples, said she made Senate Bill 102 (and its companion House Bill 627) her top priority this year after watching workers in her own community struggle to find housing near their place of work.

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“We have to change the mindset that attainable housing is a concrete box painted lime green, etc.,” Passidomo told reporters last month. “These are people who live in our community, work in our community, take care of our community.”

Gov. Ron DeSantis largely ignored the affordable housing crisis during his first term. Last year, his administration sued the city of Gainesville to stop it from allowing small apartment buildings to be built in residential areas, arguing that the city’s plan “fails to protect neighborhoods” and would mostly help college students.

But DeSantis, who is widely expected to run for president in 2024, endorsed this year’s legislation, saying that workers should be able to afford to live close to their work.

“I want to thank President Kathleen Passidomo for tackling this issue head-on, and I look forward to working with her to deliver big results,” DeSantis said during his State of the State address.

Bevy of tax incentives

The heart of Passidomo’s solution is to spur more development through funding and tax incentives, including:

  • Assigning an additional $150 million to the State Apartment Incentive Loan program for projects near military installations and on vacant or dilapidated urban land;
  • Allowing corporations to donate their corporate income or insurance premium taxes to the Florida Housing Finance Corp. (which administers the state’s affordable housing programs) instead, up to $100 million across the state annually;
  • Giving property tax exemptions for land owned by nonprofits that have existing apartments that offer at least 70 affordable housing units — an effort to deliver some relief to current renters;
  • And providing the option for counties and cities to offer additional exemptions for owners who dedicate units to affordable housing.

The legislation would also broaden the “hometown heroes program,” which currently offers no-interest loans for down payments and closing costs for homebuyers.

Instead of being restricted to police, firefighters, nurses, teachers and other “heroes,” it would apply to any first-time homebuyer who is a Florida resident who is employed full time by a Florida-based company and earning less than 150% of the area’s median income.

The loans would be up to $35,000 or 5% of the home’s purchase price, whichever is less. It would have to be paid back when the property is sold, refinanced, rented or transferred.

The legislation also preempts local governments’ zoning, density and height requirements for affordable housing projects in areas zoned for commercial and mixed-use development. In other words, affordable housing developments would not require a zoning change.

Applications for affordable housing developments would still have to be approved by a municipality and satisfy the county’s land development regulations and be otherwise consistent with the area’s comprehensive plan.

If the development is within half a mile of a major transit stop, the county would be required to consider reducing the parking requirements — an attempt to encourage more urban housing.

Proponents say the measures will keep communities from trying to shut out affordable housing, while lawmakers, community leaders and preservationists have raised concerns about how removing zoning restrictions could change the fabric of their communities.

“This could result in some large buildings being built in areas that have never seen that before, especially near single-family homes,” said Miami-Dade County Commissioner Eileen Higgins, who is pioneering the redevelopment of downtown Miami’s cultural center and several affordable housing efforts.

No rent control

By far the most controversial piece of the legislation removes the ability of communities to impose rent controls.

Florida only allows a community to cap rent increases for one-year emergencies, and it must be approved by voters. Last year, organizers tried and failed to get rent control on the ballot in both Tampa and St. Petersburg. In Orange County, voters in 2022 approved rent control for certain apartments, but the lobbying groups Florida Realtors and the Florida Apartment Association sued to stop it, and it hasn’t gone into effect.

The bill would remove even that level of local autonomy.

“It’s very difficult for me to overlook the fact that this is directly taking away something that my voters approved in November,” said Rep. Anna Eskamani, D-Orlando, who voted against the bill in committee even though she said she liked other “fantastic parts” of the legislation.

Karla Correa, an organizer with the St. Petersburg Tenants Union, called it “a way to squash rent control and give money to corporations.”

Market-rate developers — those that price their rents to what’s competitive with the market — might now be enticed to build mixed-income housing, but the bill doesn’t present much benefit or enticement to those in the affordable housing space, said developer and Housing Trust Group CEO Matthew Rieger. His team has built several affordable housing projects across South Florida, including in Overtown and Hollywood.

“Right now, it’s not clear how this will help accelerate the development of ‘true’ affordable housing (for residences with rents capped at or below 60% of the area median income),” Rieger said by email. “That’s where the need is greatest and most critical.”

The criticism has not stopped Republicans and Democrats from enthusiastically voting for the bill, however. The Senate approved the measure unanimously. The House voted for it 103-6 on Friday, sending it to DeSantis’ desk.

“This bill is not perfect. It doesn’t end the problem,” said Sen. Darryl Rouson, D-Tampa, who voted in favor of it. “But it marks a new beginning in the way we look at the housing shortage.”

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