Joining a growing list of municipalities across the state, Osceola County has decided to opt out of a program that uses tax incentives to boost affordable housing.
The board of county commissioners voted swiftly and unanimously Monday that Osceola will no longer provide property tax exemptions under Florida’s Live Local Act, a law enacted in 2023 that aims — among other things — to encourage developers to build more affordable apartments and keep their rents low.
Osceola’s decision, allowed under the legislature’s 2024 modifications to the act, comes after Lake County, Seminole County, Winter Park and Maitland did the same, as have other municipalities around the state. The cities and counties complained they were losing too much tax revenue to the tradeoff.
In Osceola, five developments offering affordable housingwere approved to receive Live Local tax exemptions in 2024, Property Appraiser Katrina Scarborough told Growthspotter. Those five developments are set to reduce their taxable value by nearly $80 million.
While some affordable housing advocates say the government opt-outs could push rents higher, one national housing policy analyst says the moves actually could help matters— if local officials direct the money they’re saving by forgoing future tax exemptions to the most desperately needed housing programs.
Sarah Saadian, the senior director of policy at the National Low Income Housing Coalition, said Florida’s housing crisis is most severe for its lowest income earners — who do not receive the benefits of some of the Live Local tax exemptions, which are targeted toward developments for moderate income renters.
“Overall there are two major causes of the housing crisis,” Saadian said. “One is this gap between what people earn and what their housing costs are. The second is a lack of housing supply that’s affordable to people with the lowest incomes, and that’s really where Florida is hit the hardest as you have a lot of low wage jobs and lots of jobs tied to tourism.”
The legislature’s decision to allow opt-outs from the Live Local Act came after counties threatened to sue the state, claiming the law was unconstitutional. Lawmakers amended the act earlier this year to allow cities and counties to stop offering tax exemptions, but only if they can show they provide enough housing for middle-income tenants, those earning between 80% and 120% of the area median income.
The county’s median household income is about $63,000, according to the most recent data from the U.S. Census.
The latest report from the University of Florida’s Shimberg Center for Housing Studies found that Central Florida did have enough such units.
Anne Ray, manager of the Shimberg Center, said she is unsure of the impact of the wave of municipalities opting out of the Live Local Act.But she expressed concern about officials leaping to conclusions based on her center’s research that there is sufficient housing for middle-income tenants.
“This is something that can change from year to year and as you know we’ve seen a lot of communities are pretty close to the line one way or the other,” Ray said.
Building housing for the lowest income earners is the hardest and requires state, local and federal subsidies in order for private developers to keep construction affordable, Saadian said. So using the resources the county saves from opting out of providing tax exemptions may allow municipalities to use the money to help the lowest income earners, she said.
“The property tax exemptions I just don’t know how much of an effect it would have…I think the intention is to encourage new development because the tax would be abated but is that really what will help drive more housing construction or is it more housing and zoning rules or access to capital?” Saadian asked. “Developers can’t build or operate housing at a price point that’s affordable to extremely low income renters because that amount of money that they’re willing to take for rent wouldn’t be enough to build the property.”
In their Monday decision to opt out of the Live Local tax plan, Osceola commissioners did not discuss whether they need to take additional steps for those renters.
“It’s interesting to look at how they’re determining there’s enough affordable housing because from our research it seems clear that there’s practically no community in Florida that has enough housing for extremely low income renters or even very low income renters,” Saadian said. “Because Florida is one of the hardest hit state for the housing crisis it’s hard to imagine that there were that many communities with enough affordable housing supply.”
Under the Live Local law, municipalities across the state will have to vote annually whether to continue to opt out of the Live Local Act tax exemption and must maintain their status each year of having enough affordable housing supply, according to the data from Shimberg.
GrowthSpotter editor Laura Kinsler contributed to this story.
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