TAMPA, Fla. (WFLA) — Florida plans to appropriate $711 million to make housing affordable for state workers, with the trade off of blocking any attempts at rent control by municipal governments, and creating property tax exemptions for certain land to be used for housing construction.
Senate Bill 102, a declared priority of Senate President Kathleen Passidomo (R-Naples), sponsored by Miami Republican Sen. Alexis Calatayud, made it through committees and passed unanimously just two days into the March legislative session.
Calatayud’s bill, the “Live Local Act” is intended to address the housing needs of Florida workers while giving tax cut incentives to developers who build affordable housing in the state.
Under the bill’s provisions, properties deemed as appropriate for development of affordable housing in Florida counties can be used for that purpose through a long-term land lease, so long as it requires the development and maintenance of affordable housing.
Following the proposal’s passage in the Senate, Passidomo and Calatayud both said the plan would allow increased funding to state affordable housing programs, such as the SHIP and SAIL grants.
“Floridians are ready to live local, and to spend less time commuting and more time building their lives and raising their families in the heart of the communities they serve. As I travel the state, availability of workforce housing is a top issue on the minds of hardworking Floridians and retirees in every community I visit,” Passidomo said in a statement. “With this comprehensive legislation, we are shutting down affordable housing stereotypes and creating attainable housing options needed by the majority of our workforce, the backbone of Florida’s economy.”
Mainly, Passidomo said the bill would ensure Florida families don’t become cost-burdened by housing needs. The bill is supposed to prevent Floridians from paying more than 30% of their income on housing, allowing them to save and build.
Calatayud, in a similar vein, said the biggest issue the bill is meant to solve is affordability for younger Floridians, who she said need solutions to finding their own place to live or raise a family.
“The biggest housing concern we hear from young people is that there is no place for them to raise their own families in communities they grew up in, where their extended families have lived for generations,” Calatayud said. “To me, that is a tragedy. This bill is going to help bridge that gap, improving options for both homeownership and affordable rental units in communities across our state.”
SB 102 would increase record funding for Florida’s State Apartment Incentive Loan (SAIL) and State Housing Initiatives Partnership (SHIP) Programs as well as making language in state statutes to block the movement of the funds to the state’s general revenue. Additionally, it puts $252 million in the SHIP program and $259 million in SAIL, for $150 million in new recurring funds.
The bill also puts $1.5 billion over 10 years into funding for rental units, according to a release from the Florida Senate. It would also create additional construction incentives for mixed-use and urban infill housing developments, as well as additional housing construction near Florida military installations.
Another $100 million would be given to Florida’s Hometown Heroes Program, which provides funding for housing to frontline workers such as law enforcement officers, firefighters, educators, healthcare professionals, childcare employees, and active military or veterans. $25 million would also be appropriated to encourage “Florida businesses to make donations towards community development and housing projects for low-income persons.”
Housing affordability remains a concern in the U.S., especially amid ongoing increases to interest rates by the U.S. Federal Reserve and its effect on mortgage rates.
The latest measure of the national rate for a 30-year fixed rate mortgage is inching closer to 7%. Freddie Mac, the federally-backed mortgage company, reported the rate hit 6.73% Thursday, the highest it’s been since November 2022, when rates reached 7.08%.
The Federal Reserve is expected to raise basis points again this week, possibly as much as 0.5 points. The last few increases were 0.25, after several higher pushes of 0.5 and 0.75. The U.S. Central Bank’s strategy for basis point increases is centered on curbing inflation in the wake of economic upheaval during the COVID-19 pandemic.
“Mortgage rates continue their upward trajectory as the Federal Reserve signals a more aggressive stance on monetary policy,” Sam Khater, Freddie Mac’s Chief Economist, said. “Overall, consumers are spending in sectors that are not interest rate sensitive, such as travel and dining out. However, rate-sensitive sectors, such as housing, continue to be adversely affected. As a result, would-be homebuyers continue to face the compounding challenges of affordability and low inventory.”
Mortgage Daily News reports updates every weekday afternoon. At 4 p.m. Wednesday, it showed the rate was 7.05%. The latest measure from MDN has not yet been published.
A variety of tax-related provisions in the bill also deal with property tax exemptions for middle class Floridians, low-income residents, and a tax refund for the purchase of building materials.
If the bill clears the Florida House of Representatives, it’s supposed to take effect July 1.