It’s time to focus on the state Capitol again: The 2022 Florida Legislative Session starts Jan. 11, running through March 11. If that seems early, you’re right. Typically, the regular session starts in March, but this year, it’s been moved up to give time for the redistricting process before the November elections. These two months will be a flurry of activity, so we’ve highlighted some issues that the business community will be monitoring closely.
A solution to affordable housing
It’s getting tougher to find an affordable place to live these days. Just about everyone agrees on this—legislators, real estate agents, chambers of commerce and certainly home buyers and renters. Will something actually get done about it this year?
“I’ve been practicing law for 42 years in Collier County,” says state Sen. Kathleen Passidomo, R-Naples. “For over 42 years we’ve talked about the lack of workforce housing in Collier County. This has been languishing way too long.”
Keep in mind, though, that the concept of “affordable housing” is relative. The rule of thumb is generally that a home is considered affordable when no more than 30% of a household’s gross income is spent on rent or mortgage and utilities. And this has become a growing concern in Florida. Roughly 25% of Floridians struggle to pay for housing, according to the Florida Housing Coalition. The pandemic has exacerbated matters further.
The median sale price for a single-family home was around $354,000 in summer 2021, an 18% increase from the previous year. While beneficial for sellers, home ownership has gotten out of reach for many buyers. The median cost of rent was steadily increasing pre-pandemic, hitting $1,250 in 2019. The supply of rentals, either subsidized or unsubsidized, was also shrinking. Now for every 100 low-income households, there are only 77 available and affordable rental units, according to the coalition.
From a workforce perspective, this makes living and working in Florida all the more difficult. In particular, both the Naples and Fort Myers-Cape Coral metro areas made the Urban Land Institute’s 25 worst areas for finding affordable housing, according to a 2021 study. “If people can’t afford to live here, they won’t be able to work here,” says Tiffany Esposito, SWFL Inc.’s president and CEO.
All levels of government have a hand in financing affordable housing or providing assistance to homebuyers, but recent moves at the state level in Florida have put the issue back at the forefront. Last session, changes were made to the Sadowski Trust Fund. Established in 1992, the fund takes a portion of the documentary stamp tax on real estate transactions and sets it aside for affordable housing programs, such as down payment assistance, new construction, eviction prevention and more. However, over the last 20 years, the state Legislature diverted about $2 billion each year back into the general fund, according to a report from the Florida Association of Local Housing Finance Authorities.
Last year, the Legislature passed a bill that offered both good and bad news for affordable housing advocates. It stopped the so-called “sweeps” of the fund, but it also reduced the total amount earmarked for affordable housing. Now, about half of what was once promised for affordable housing will go toward programs aimed at combating sea-level rise and improving wastewater systems. Still, the $209.2 million approved for the 2021-22 fiscal year for affordable housing programs is the highest amount in 12 years, according to the Sadowski Housing Coalition.
Over the summer, the debate over affordable housing took a turn when the Florida Realtors backed a push to put an amendment in front of voters that would require 25% of the documentary stamp tax go toward affordable housing, which would both be a big boost to the fund (and real-estate agents who could profit off commissions from those home purchases.) The move drew the ire of state Republicans, including Passidomo, who saw it as undermining their authority as lawmakers. The criticism from legislators, in addition to the challenge of having to collect the signatures to put a measure on the ballot, led the Realtors association to abandon the measure in September. Instead, it pledged to work with the Legislature on new affordable housing programs, including down payment assistance to frontline workers.
If anything, this maneuver may have forced the issue. “It started an intense dialogue,” says Passidomo of the amendment attempt.
The legislatures will have to reexamine the housing trust to see if it meets the needs of today’s workforce, she said. The down payment assistance program, for example, is starting to become much more costly as home prices skyrocket. “The programs have been working, but they haven’t made a big enough dent,” she says.
Local chambers of commerce have consistently placed affordable housing on their annual legislative agendas, emphasizing cooperation among state and local governments and private developers. More specifically, they note the need for more high-density housing developments. Everyone may have their eyes on that house with the yard, but as sprawl continues inland, land will be gobbled up. The only other option, as Esposito of SWFL Inc. noted, is to build up. Picture a condo development with shops and businesses within walking distance. That may require rethinking local zoning restrictions—and irk neighbors in the process—but will be worth it in the long run, she said.
The reason it tops their legislative agenda isn’t just because of the need itself, but the tangential issues it also helps cure. Roads become less congested once people don’t have to drive longer distances to work; infrastructure won’t need to be stretched to accommodate sprawl; families’ finances become less stressed once they’re not spending so much on housing. “Housing is fundamental,” Esposito says. “It addresses so many other issues.”
So, everyone is just about in agreement: There’s an affordable housing problem. The question is whether the state Legislature will take the lead in finding a better solution this session.
VISIT FLORIDA extension
The state’s leading tourism marketing agency may get a long-term deal. Sen. Ed Hooper, R-Clearwater, introduced a bill to extend funding for VISIT FLORIDA through 2031. The agency has been the target of criticism in recent years after some decisions, such as signing rapper Pitbull to a $1 million contract to promote the state in 2016, that had some lawmakers questioning its purpose. But the agency has refurbished its reputation more recently. A report last year by the Office of Economic and Demographic Research showed that for every $1 invested in VISIT FLORIDA, the state received $3.27 back in tax revenue. During a recent committee hearing, Florida Restaurant and Lodging Association general counsel Samantha Padgett said that VISIT FLORIDA was integral in reviving tourism during the pandemic. As of now, funding for the agency is set to expire in 2023. It received $80 million from the Legislature last year.
New sales tax holiday
Floridians may have two disaster preparedness holidays. Sen. Joe Gruters, R-Sarasota, proposed legislation to make June 2-6 and Sept. 8-12 sales tax-free for items relating to hurricane readiness. The 2021 tax holiday was May 28-June 6. Items that would be tax-free include flashlights, bags of ice, coolers, batteries, chainsaws, first-aid kits and portable generators.
Data privacy protections
Consumer data privacy became a hot topic last session, and may once again emerge this year. Measures championed by House speaker Chris Sprowls, R-Clearwater, would seek to protect consumers in how tech companies use the information gathered about them online. California, Virginia and Colorado are the only three states to have enacted comprehensive data privacy legislation. About 20 states—including Florida—considered it last year. The nonpartisan Florida TaxWatch issued a report last year saying the legislation would cost Florida businesses anywhere from $6.2 billion to $21 billion to implement protections, and cost annually between $4.6 billion and $12.7 billion. In its report, Florida TaxWatch noted that it’s in agreement that data privacy is important, but that the costs involved may significantly hinder small businesses. It recommended Florida legislators push for a federal data privacy law that would standardize protections nationwide.
Vacation rental regulation
The Legislature is reviving the ongoing battle over how to regulate vacation rental properties. The issue has been a push-and-pull among platforms such as Airbnb, local communities looking to regulate and state officials seeking to provide more uniform standards. Sen. Danny Burgess, R-Zephyrhills, and Rep. Jason Fischer, R-Jacksonville, have introduced bills (SB 512 and HB 325) that preempt further restrictions on the local level and would give the state more control, such as giving the Division of Restaurants and Hotels the ability to suspend licenses. Similar proposals made their way through the Legislature last year, but failed to get passed.
Cash requirements at businesses
A study by Square Inc. found that cashless businesses have increased during the pandemic. The report estimates that nearly 15% of U.S. businesses are cash-free, but a cashless society may not be on the horizon in Florida. Two bills (HB 233, sponsored by Rep. Matt Willhite, D-Wellington, and SB 408, sponsored by Sen. Shevrin Jones, D-West Park) would require any businesses operating at a fixed space to accept cash as payment. Both legislators have noted that not all Floridians have credit cards or bank accounts and this would guarantee they have a way to pay for goods and services.
Qualified Target Industry tax break
Some interest groups are pushing for the renewal of the state’s Qualified Target Industry tax break. Despite backing from the Florida Chamber of Commerce, the Legislature did not renew the incentive last year intended to create high-paying jobs. Essentially, qualifying businesses would get tax refunds if they met certain guidelines, such as a $1,000 bonus for each job that pays 150% over the median wage in a particular region. Recognizing some criticism of the program as “corporate welfare,” Florida TaxWatch issued a report last year encouraging the renewal of the program as a valuable way to attract and retain businesses. The report noted that for every $1 in tax refunds, the state received $5.30 in revenue for businesses involved in the program.