Live Local Act: Florida’s Historic Investment in Housing

Published by Christina Apostolidis on Tuesday, November 7, 2023

Journal Cover November 2023   Download PDF

Landmark legislation in Florida became effective July 1, providing much-needed resources to address the housing crisis in the state with an emphasis on providing housing for Florida’s workforce within the communities in which they serve.

The Florida Live Local Act (SB102) is designed to address the issue that many Florida residents have been forced to live further away from employment opportunities due to increasing rents. The Florida Housing Finance Corporation (FHFC) administers a significant portion of the resources, but there are other statewide and local government
components as well.

Live Local Program Tax Credit

The Live Local Program Tax Credit provides an opportunity for businesses in Florida to give back to communities across the state with the intent of increasing the supply of workforce and affordable housing. The State Apartments Incentive Loan (SAIL) program will receive up to $100 million in additional funding from this new tax credit program administered by the Florida Department of Revenue (DOR), which will allow corporate and insurance premium taxpayers to receive Florida tax credits for a dollar-for-dollar contribution to FHFC. Taxpayers could apply for an allocation of 2023 credit from the Florida DOR beginning Oct. 1. The application period closes the day before the taxpayer is required to file their corporate income tax return or the $100 million cap is reached, whichever comes first.

Once the credit allocation is approved by the Florida DOR, the taxpayer makes a contribution of that amount to FHFC. When the funds are received, FHFC will issue a certificate of contribution to the taxpayer, which is required to be submitted along with the tax return to claim the credits. There is an additional $100 million cap for the 2024 tax year, with the application period opening in January 2024.

The contributions received by FHFC will be allocated via a Request for Application (RFA), which is a competitive application process. Up to $25 million will be used for large-scale developments of significant regional impact, which FHFC is calling “Transformational Developments.” These developments are intended to directly benefit the residents as well as the surrounding community and have geographic and demographic characteristics that differ from the traditional SAIL program, which will be determined by a market study. Funding of more than $25 million will be placed in the traditional SAIL program. It is important to note that SAIL funds can only cover 25% of total development costs.

The bill also increased the Community Contribution Tax Credit program from $14.5 million to $25 million annually.

Additional SAIL Funding from Live Local Act

The Live Local Act allocated $150 million in additional SAIL funding, which is separated into specific categories. These developments are intended to be innovative solutions that will increase the supply of affordable and workforce housing in the state, and in most cases will be used in conjunction with tax-exempt bonds and 4% low-income housing tax credits. The largest category, which includes 70% of the additional funding, is for developments that prioritize redevelopment, urban infill, mixed-use developments and developments close to military installations with supporting services. The remaining 30% of funding will be awarded to developments prioritizing the use of publicly owned land, youth aging out of foster care, elderly and rural opportunities. Developments may include multiple aspects of both categories. FHFC is scheduled to issue RFA 2023-213 Nov. 14 for SAIL funding to be used in conjunction with tax-exempt bonds for mixed-income mixed-use and urban infill developments. Any unused funds will remain in this funding category and will not be used to fund the traditional SAIL program.

Like the transformational development SAIL money, these SAIL funds are not held to the same geographic and demographic splits as traditional SAIL funds. In both programs, developments are expected to be mixed income with income- and rent-restricted set asides similar to other workforce housing RFA’s FHFC has issued. Shovel-readiness and the ability to proceed will also be prioritized in these programs.

‘Missing Middle’ Property Tax Exemption

Three new ad valorem property tax exemptions were introduced through the Live Local Act, effective for the 2024 tax year. They include an affordable housing property exemption for land owned entirely by a nonprofit entity that is leased for a minimum of 99 years and a county or municipality exemption for property owners that set aside units for households earning 60% of AMI or less.

In addition, the act created an ad valorem property tax exemption of 75% or 100% for newly constructed or substantially rehabilitated developments that have more than 70 units set aside for households earning 120% of AMI or less. To obtain the exemption, the property owner must first register with FHFC through the Multifamily Middle Market Certification portal. The portal began accepting applications Oct. 2 and will continue through Dec. 31. Owners will submit a preliminary request for certification through the portal, no later than Jan. 1, 2024. The submission will include a recent market study and a rent and unit list for income-eligible tenants.

FHFC will review submissions for all required documentation and decide on whether the criteria was met and provide a notice to the property owner by Feb. 15, 2024. Property owners are required to submit the certification and an application to the property appraiser no later than March 1, 2024. FHFC is not responsible for determining if the property owner will receive the exemption. The final determination is made by the designated appraiser.

Resources

FHFC has had multiple workshops on each aspect of the Live Local Act. These workshops are recorded and can be accessed are on the FHFC
website at www.floridahousing.org/live-local-act. Future workshops on the Live Local Act and RFA’s can be found on the main website. Public comments can also be made on the FHFC website. In addition, FHFC has contracted with the Florida Housing Coalition to provide training which can be found on their website at https://flhousing.org/events.

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