In 2023, Florida passed the Live Local Act, also referred to as SB 102. This Act was implemented as a way to “increase the availability of affordable housing opportunities for Florida’s residents, who desire to live within the communities they serve.”[i] More specifically, this Act allocates a historic amount of funding, incentives, programs, and prospects to workforce housing. The reason, or necessity, for this Act stemmed from the record-breaking increase in the average pricing of homes within Florida in the past few years.
Florida has only twenty-five affordable and available rental units for every 100 extremely low-income renters.[ii] A person is considered an extremely low-income renter based on those whose incomes are at or below the poverty guideline or 30% of their area median income (“AMI”).[iii] This currently places Florida as the state with the second-highest percentage of low-income renter households with severe cost burdens at 82%, outranked only by Nevada at 86%. The reason for this affordable housing issue amounts to increased migration and rising home costs, along with climate change and property insurance challenges.[iv] In 2022, Florida gained a net population of 249,064 people, the highest net migration increase among the fifty states.[v] Further, thirty-nine corporations moved their headquarters to Florida in 2022 and 2023, the highest net gain of any state.[vi] The high demand in the state caused home prices to increase across the state. As of May 2024, the median home price in Miami is $608,000 (8.10% year-to-year increase), $460,000 (7.70% year-to-year increase) in Tampa, and $569,000 (9.40% year-to-year increase) in Sarasota.[vii] Due to these year-to-year increases, rent prices are extremely expensive, causing workforce and low-income renters to move to the edges of cities and into the suburbs, which tend to be far from their place of work.
Despite the increased migration, Florida is underperforming compared to other states across the country, showing a plunge in home sales and prices in some parts of the state. For example, Jacksonville prices have dropped 6.5% compared to last year. Meanwhile, Miami’s housing prices have risen by 2.5%. This is because there has been a considerable drop in condo sales due in part to higher condo fees but also due to the ongoing property insurance crisis in the state. These higher condo fees are due to the new building safety law, which forces all condo buildings over thirty years old to pass a structural integrity inspection, along with everything happening with property insurance.
As for natural disasters and property insurance challenges, Florida is prone to hurricanes, with Hurricane Ian causing over $112 billion in damages. These high damages have caused many home insurance companies to no longer operate in Florida, leaving the few that remain open to price their policies as high as they please.[viii] The cost of home insurance in Florida has increased by 102%.[ix] Home insurance in 2023 cost about $6,000, the highest premium in the country. Therefore, to offset these high insurance prices, Florida affordable housing operators have taken several approaches, such as paying higher deductibles, self-insuring properties, and diversifying portfolios.
Many renters have been evicted from their properties due to their inability to pay the high rent prices that landlords must set in order to pay off their high mortgages. This is causing more and more people to apply for Section 8 housing. The problem is that Section 8 fills up quickly, and with an already extremely long waitlist, this is not an option for many renters.
The best solution to these issues has been the Live Local Act. The Live Local Act helps the efforts to create a solution for Florida’s affordable housing crisis through $811 million in funding and tax credits for affordable housing programs, a more prominent role for local governments to develop affordable housing on parcels zoned for commercial, industrial and mixed-use properties, modified land-use tools to promote affordable housing development, particularly on publicly owned land, property tax exemptions and a sales tax exemption for specific affordable housing developments.[x]Many communities have opposed the passing of the Live Local Act by choosing to opt out of the tax credits granted by the Act.
One of the programs included in the Live Local Act is the Hometown Heroes Program. This program “provides down payment and closing cost assistance to first-time, income-qualified homebuyers so they can purchase a primary residence in the community in which they work and serve.”[xi] There is also a tax exemption for multifamily middle market housing, better known as the “missing middle” tax exemption which “encourages new or recently constructed market-rate multifamily rental developments to offer affordable and workforce units.”[xii]
All in all, Florida’s affordable housing crisis does not seem to be going anywhere. Instead, it is something that our legislature and residents will have to learn to live with. As for those who cannot just learn to live with it, which seems to be the majority of the working-class population, they will see a significant shift in people leaving the state of Florida for more affordable states, which will allow them the ability to own a home without having to give up an arm and a leg for it.
[i] See Live Local Act, Fla. Hous. Fin. Corp., https://www.floridahousing.org/live-local-act (last visited Oct. 1, 2024).
[ii] See No State Has an Adequate Supply of Affordable Rental Housing for the Lowest-Income Renters, Nat’l Low Income Hous. Coal. https://nlihc.org/gap (last visited Oct.1, 2024).
[iii] See Nat’l. Low Income Hous. Coal. https://nlihc.org/housing-needs-by-state/florida (last visited Oct.1, 2024).
[iv] See Dave Walsh, Florida’s Top Affordable Housing Issues, J.P. Morgan (Aug. 23, 2024), https://www.jpmorgan.com/insights/real-estate/community-development-banking/floridas-affordable-housing-crisis.
[v] See State-to-State Migration Flows, U.S. Census Bureau https://www.census.gov/data/tables/time-series/demo/geographic-mobility/state-to-state-migration (last visited Oct.1, 2024).
[vi] See U.S. Census Bureau, https://www.census.gov/data/tables/time-series/demo/geographic-mobility/state-to-state-migration (last visited Oct.1, 2024).
[vii] See Florida Housing Market, Redfin https://www.redfin.com/state/Florida/housing-market (last visited Oct.1, 2024).
[viii] See Lisa Bucci et al., Hurricane Ian, Nat’l Weather Serv. (Apr. 3, 2023), https://www.nhc.noaa.gov/data/tcr/AL092022_Ian.pdf.
[ix] See Giulia Carbonaro, Florida’s Housing Market is in Trouble, Newsweek, https://www.newsweek.com/florida-housing-market-trouble-1874962 (Mar. 5, 2024, 8:45 AM).
[x] See Live Local Act, supra note i.
[xi] See id.
[xii] See id.
