Orange County to consider opting out of state law providing tax breaks to housing developers

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Orange County, like other major metro areas in Florida, has grown increasingly unaffordable for the average person. According to data from the University of Florida’s Shimberg Center, the county has a significant deficit of affordable housing options for those who earn less than 80 percent of the area median income, equal to roughly $54,000 for a single adult, or $77,200 for a family of oven.

Many long-time locals are being priced out of their neighborhoods, or have been forced to the streets, where they risk being shooed away or arrested by police for the crime of having nowhere else to go. Beginning Oct. 1, sleeping on public property will be strictly prohibited in Florida, and local governments could face lawsuits for failing to have law enforcement forcibly remove homeless people from public property, come January.

As county leaders search for ways to bring more affordable housing to those most in need, they are now considering a plan that would allow them to opt out of a controversial part of the state’s developer-backed “Live Local Act” and instead create a local plan that meets local needs.

“It’s hurting us, in increasing the rents here in Orange County,” said Orange County Commissioner Emily Bonilla during a Board of County Commissioners meeting Tuesday.

The Live Local Act, approved with bipartisan support by the Florida Legislature last year, allows housing developers in Florida to claim up to 75 percent in tax breaks for affordable housing projects that meet certain requirements. Specifically, they must ensure at least 40 percent of units in proposed developments of at least 70 units are affordable for people making up to 120 percent AMI for a minimum of 30 years.

Area median income varies depending on the size of your household, but in Orange County, is $115,800 for a family of four, or $81,120 for a single adult. The term “affordable” refers to housing that costs less than 30 percent of a household’s monthly income.

Critics of Live Local, which also banned rent control statewide, noted prior to its passage that the income level requirements for the tax break were too high, and wouldn’t ensure that more housing would be coming for low-income people who are at highest risk of being or becoming homeless.

“We have lost billions to corporate giveaways that simply transfer our tax dollars to corporate profits, rather than funding for truly affordable housing,” said Jackson Oberlink, lobbyist for the housing justice group Florida Rising, during public testimony on the law last year.

“Instead of giving these big developers tax breaks, why don’t we just tax them properly and appropriate those funds towards true affordable housing solutions?” Oberlink asked.

Tax breaks provided to private housing developers, importantly, reduce revenue coming into local governments. Such revenue can be used for things such as road repairs, investment in transit, and other public projects important for maintaining safe, healthy communities.

Under new changes made by state legislators to the Live Local Act this year, spurred by complaints from local governments, city and county leaders now have a bit more flexibility. There were minor adjustments to projects’ eligibility requirements, and local governments now have the chance to “opt out” of the tax abatement portion of the law completely.

Several counties in Central Florida — including Hillsborough, Pasco, Lake, Seminole and Osceola — have already done so, due to a concern over losses in tax revenue. So have cities like Winter Park and Kissimmee, which also see locals struggling with steep rents coupled with other day-to-day expenses, like groceries, debt and childcare.

Supporters of the partial Live Local opt-out say it can allow local leaders to come up with plans that are most suitable for their own communities, instead of being forced to go along with whatever the state Legislature (and the business interests funding their campaigns) want.

Critics, including development interests that want their special tax breaks, warn that opting out could push affordable housing developers away.

Orange County Mayor Jerry Demings admitted Tuesday that he recently asked an attorney who represents housing developers why they weren’t building low-income housing out of, say, the goodness of their hearts.

“She responded that it was essentially related to, you know, our development codes and incentives,” Demings explained, vaguely.

While Demings expressed support for coming up with a plan that would focus on spurring development for low-income families in greatest need, he admitted he was concerned over potential consequences of opting out of this part of the law.

“I want to make sure that if we opt out, we’re not opting out just to say we’re spitting the Florida Legislature, but… to encourage the building of truly affordable units within our community.”

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Orange County Government

Orange County Mayor Jerry Demings

This year’s count of homeless people in the Orange-Osceola-Seminole County region identified a stark 105 percent increase in the number of people who lack shelter over the last year, including a number of seniors who can no longer afford to live in the area on fixed incomes. Unsheltered residents are people who are living somewhere not meant for habitation, such as the streets, sidewalks or woods.

Housing data shows it’s clear who is able to afford to live in Orange County, and who is not. A 2023 report from the Shimberg Center found a small surplus of 799 affordable units in the broader metro area for those making up to 120 percent AMI.

The same report, however, identified a significant shortage of 94,715 affordable units for those earning up to 60 percent AMI.

Orange County commissioner Christine Moore, presented with the data Tuesday, said the deficit was “shocking.” Bonilla, the county commissioner who spearheaded an effort in 2022 to cap rent hikes in Orange County (before Live Local banned that), said she was fully in support of opting out of the law’s tax break incentive.

“It’s not helping us in any way, but it is losing us, you know, revenues that we could use towards maybe doing more affordable housing,” Bonilla told the board. “So I am all for this.”

Commissioner Nicole Wilson, who’s running for re-election this year in a close race for District 1, was less decisive in her take on the issue. But she expressed support for creating a localized plan, as long as it’s crafted in a way that still incentivizes development for those most in need of a place to call home.

“Knowing the needs of our people best, I believe that we have the brain power and manpower to probably put something together like that,” Wilson said.

According to Alan Marshall, assistant to the director of Orange County’s Planning, Environmental and Development Services Department, a total of 14 housing projects in Orange County have qualified for the Live Local tax break since the law took effect.

Qualifying for the tax break requires going through an application process with the county. As an example: Prose Avalon Pointe, a 300-unit apartment complex in Winter Garden, dedicated 124 units for residents earning up to 120 percent AMI, and received a tax abatement of $52,636 according to Marshall.

M2 at Millenia, a 403-unit apartment complex with 343 units affordable for those earning up to 120 percent AMI, received a county tax break of $88,206 and a city tax break of $133,718.

Statewide, at least 99 new construction projects and 21 renovation projects have qualified for Live Local tax breaks since its enactment last year, with the vast majority saving their “affordable” units for renters who earn up to 120 percent AMI rather than a lower income bracket .

Seminole County’s property appraiser warned county leaders there in July that the county could face “real” financial implications if county leaders didn’t opt out of Live Local’s tax break deal. County appraiser David Johnson warned that Seminole could lose out on hundreds of millions of dollars in tax revenue.

Several Orange County leaders, meanwhile, seemed uneasy over the idea of making a decision Tuesday on how to move forward.

Marshall, with the county’s planning department, said the County Commission could schedule a work session for October 29 to discuss the issue in further depth and come up with a plan for what a localized version of the tax break program might look like, to avoid driving away developers entirely.

The idea was pitched, for instance, of offering the same incentive specifically for proposed developments that earmark units affordable for renters earning up to 60 percent AMI, or 80 percent AMI, since that’s where the biggest shortage of available (and truly affordable) housing is .

“That’s something that perhaps I could support,” Demings said of creating a localized plan. “Where we craft something that is truly consistent with our public policy and the outcomes that we want to see.”

A county work session to discuss the issue further is scheduled for Oct. 29.

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