Title:
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Resolution to Opt-Out of Missing Middle Property Tax Exemption - Consider a resolution to “opt out” of certain multi-family affordable housing ad valorem property taxation exemption; Countywide (Rebecca Hammock, Development Services Director)
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Division:
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Development Services - Business Office
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Authorized By:
Darren Gray, County Manager
Contact/Phone Number:
Rebecca Hammock/407-665-7396
Background:
Pursuant to the Board’s discussion during the first Budget Work Session on March 26, 2024, the County Attorney’s Office prepared a resolution that would allow the County to “opt out” of the property tax exemption available to certain multi-family affordable housing units.
The 2024 Live Local Act legislation adds a new affordable housing property tax exemption in s. 196.1978, Florida Statues for newly constructed multifamily projects of more than 70 units that serve families with an annual household income between 80%-120% of the median annual adjusted gross income within the applicable metropolitan statistical area. The property tax exemption is 75% of the assessed value if certain requirements are met, as further explained below as background.
This same legislation amending Section 196.1978(3)(o), Florida Statues, however, allows taxing authorities to "opt-out" of the property tax exemption available to certain multifamily developments. If the county has an adequate supply of affordable housing units, the legislation allows local governments to opt out of the middle-income affordable housing exemption with a two-thirds vote of the governing body.
The County can elect not to exempt property if the latest Shimberg Center for Housing Studies Annual Report (“Annual Report”) identifies that the number of affordable and available units in the area is greater than the number of renter households in the area. According to the 2023 Annual Report, in the metropolitan statistical area that includes Seminole County (“Orlando-Kissimmee, FL MSA”), the number of affordable and available units exceeds the number of rental households. According to the Annual Report the number of 0-120% AMI units available is 799. Therefore, Seminole County may currently “opt out” of affording the property tax exemption if it adopts the attached resolution pursuant to Section 196.1978(3)(o), Florida Statutes. However, since the “opt out” provision is based on the latest Shimberg Center for Housing Studies Annual Report, the County’s eligibility to “opt out” could change in future years.
As background, to obtain the property tax exemption, multifamily developments must first obtain a certification notice from the Florida Housing Finance Corporation (“Florida Housing”). The certification is known as the Multifamily Middle Market Certification. The property owner must apply to Florida Housing and provide the following information:
1. The most recently completed rental market study.
2. A list of units for which the property owner seeks an exemption.
3. The rent amount received by those units.
4. Sworn statement restricting the property for a period of not less than three years to housing persons who meet the income limitations.
To be eligible for the Multifamily Middle Market Certification, the statute requires the following:
1. The units are within a newly constructed multifamily project that contains more than 70 units dedicated to housing natural persons or families meeting the income limitations.
2. The units are rented for an amount that does not exceed the amount as specified by the most recent multifamily rental programs income and rent limit chart posted by Florida Housing or 90% of the fair market value rent as determined by a rental market study meeting the requirements of the statute, whichever is less.
3. The units are within qualified properties that serve households with incomes between 80% and 120% of the area median income, an exemption of 75% of the assessed value is provided.
The deadlines for submitting for a certification notice to Florida Housing and the tax exemption are as follows:
1. Owners must have their request submitted to Florida Housing no later than December 31, 11:59 p.m.
2. Owners must have appropriate rents and tenants in place in units under consideration no later than January 1.
3. Owners must confirm or update (as needed) the unit and rent list between January 1 and no later than January 15, 11:59 p.m.
4. Florida Housing will provide certification notices to owners and the local property appraisers no later than February 15.
5. If an owner receives a certification notice, they must then submit a notice, an application, and any other required documentation to their local property appraiser no later than March 1 to be considered for the exemption.
Florida Housing anticipates opening the 2025 Multifamily Middle Market Certification portal and accepting applications beginning in September/October 2024. This means that to obtain the certification for the 2025 tax roll, all rents and tenants must be in place for the units seeking the exemption by January 1, 2025. Thus, the units must be completed and obtain Certificates of Occupancy with rents in place and tenants occupying units by January 1, 2025.
Once a certification notice is obtained, the owner then must apply to the Property Appraiser for the property tax exemption. The Multifamily Middle Market Certification notice must be submitted to the Property Appraiser along with any other forms or information the Property Appraiser may require no later than March 1, 2025. The certification notices must be renewed by the owner each year.
Finally, the resolution attached will “opt out” all eligible projects moving forward, however, those with the tax exemption and certification in place this year will be grandfathered in as long as the projects continue to meet the statutory requirements. The resolution is required to be approved by two-thirds vote of the Board per Section 198.1978(3)(o)1, Florida Statutes.
Requested Action:
Staff requests the Board adopt the resolution electing to "opt-out" of the property tax exemption available to certain missing middle housing developments that house families with an annual household income between 80%-120% of the median annual income for the Orlando-Kissimmee, FL MSA pursuant to Section 196.1978(3)(o), Florida Statues.