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Throughout the 2024 Legislative Session, Stearns Weaver Miller closely monitored the implementation of the 2023 Live Local Act (Senate Bill 102) and the progress of the 2024 Live Local Act (Senate Bill 328). The 2024 Live Local Act was in reaction to issues addressed by developers and local governments during the initial implementation of the 2023 Live Local Act.
On February 28, 2024, the Florida Legislature passed the 2024 Live Local Act, which will take effect upon signature of the Governor. We outlined the major changes in the legislation in a comprehensive news alert here and hosted an in-depth webinar on the major changes on March 22, 2024. In addition to the passage of the 2024 Live Local Act, other legislation approved by both chambers affected funding mechanisms for Live Local projects.
Every year, the House Ways and Means Committee originates the initial version of the Florida Legislature’s Tax Package. The Tax Package generally contains numerous provisions affecting tax policy ranging from statewide impacts to impacts on the local level, such as sales tax holidays, corporate taxes, property tax exemptions, and more. On March 8, 2024, the Florida Legislature passed the Tax Package, which the Governor is expected to sign into law once received. The provision of the Tax Package discussed below is effective July 1, 2024 and can be utilized beginning with the 2025 property tax roll. It contains specific provisions affecting the Live Local Act.
The 2024 Tax Package includes a provision allowing local taxing authorities, such as counties and municipalities, to enact an ordinance or resolution effectively opting out from the “Missing Middle” ad valorem exemption for eligible projects with units serving families earning between 80% Area Median Income (“AMI”) and 120% AMI. In order for the taxing authority to enact such an ordinance or resolution, it must make a finding that the county is located within a Metropolitan Statistical Area (“MSA”) that has a surplus in “Missing Middle” housing stock, or more specifically, has a surplus in housing for the category entitled “0-120 percent AMI.” The ordinance or resolution must take effect on the January 1 immediately succeeding adoption and shall expire on the second January 1 after the January 1 in which the ordinance or resolution takes effect. The ordinance or resolution may be renewed depending on the status of the county’s housing stock at the time of renewal.
The finding must be based on the most recently published Shimberg Center for Housing Studies Annual Report; the 2023 report can be found here. Because a taxing authority can make this finding based on MSA level-data, counties that do not have a surplus of “Missing Middle” housing on a county level but that fall within an MSA with a surplus, may be able to pass such an ordinance opting out from this exemption. Pasco County, for example, has indicated its intent to opt out.
Based on the final language contained in the 2024 Tax Package and the 2023 Shimberg Center Annual Report, taxing authorities in a number of Florida counties could enact an ordinance or resolution opting out of the “Missing Middle” tax exemption. This exemption played a crucial and key role in incentivizing multifamily property developers to build or convert projects to serve this segment of the population, which is typically described as workforce housing.
Units within multifamily properties that already received an exemption from the local Property Appraiser should continue to receive the exemption despite a taxing authority passing an ordinance or resolution based on grandfathering language in the provision. However, the grandfathering language may not provide complete protections to developers who relied upon the previous version of the law. Developers and taxing authorities should consider working together cooperatively on opt-out ordinances to avoid violating rights associated with existing projects.
Due to the statewide impacts of this legislation, our Government Affairs and Affordable Housing Practice Groups will be closely monitoring local implementation of the 2024 Tax Package.
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