Orlando City Council Decision
The Orlando City Council is set to deliberate on withdrawing from a significant tax exemption provision under the Florida Live Local Act. This decision, scheduled for October 21, 2024, will weigh heavily on the future of housing developments in the city.
Tax Exemption Details
The Live Local Act provides generous ad valorem tax exemptions—either 75% or 100%—for housing developments. These exemptions depend on the rental levels outlined by the property owners, offering considerable financial relief to developers investing in the area.
Housing Supply in Orange County
Research from the Shimberg Center for Housing Studies at the University of Florida indicates that Orange County’s housing stock is sufficient for residents earning between 80% to 120% of the area median income (AMI). However, there is a stark shortfall of 77,753 units for families earning between 0% to 80% AMI.
Income Levels
To provide context, the area median income for a family of four in Orange County is estimated at $77,200. This figure sets the benchmark for determining eligibility for certain housing programs and tax exemptions.
Rationale for Opting Out
The underlying motive for Orlando’s potential withdrawal from the tax exemption is drawn from concerns that it fails to address the city’s critical housing challenges. The existing exemption primarily benefits developments that do not cater to the most urgent community needs, especially for extremely low, very low, and low-income households. This approach could inadvertently transfer the tax responsibility to these already burdened demographics.
Impact on Other Taxpayers
City officials have highlighted concerns that preserving the tax exemption would shift the financial burden of essential public services—such as police and fire departments—onto other taxpayers, rather than placing it on developers who benefit from the exemptions.
Other Municipalities’ Actions
Several municipalities in Central Florida, including Kissimmee, Lake County, Seminole County, Osceola County, Winter Park, and Maitland, have already opted to withdraw from this tax exemption. Their decisions reflect a regional trend seeking to address similar housing market and community pressures.
Existing Projects
Despite the potential change, six multi-family projects have already secured approval for the 2024 tax exemption and will continue to benefit under the current regulations. Nonetheless, if the city council moves forward with the opt-out, no new applications for the exemption will be entertained.
Future Considerations
The city’s decision-making process will remain dynamic, contingent on annual reports from the Shimberg Center for Housing Studies on housing availability. These reports could alter or influence future city policies regarding such exemptions.
Clarification on Opt-Out Scope
It is important to note that the resolution under consideration by the city council does not entail a complete withdrawal from the Live Local Act. Instead, it specifically targets the aspect of the act that provides tax relief, aiming to realign resources with the area’s most significant housing challenges.
