Realtors, Builders Keeping Close Eye On Proposed Florida Legislation as Session Opens

Among hundreds of bills that Florida legislators will discuss in the coming session are a pair that pertain directly to the real estate industry and may ultimately affect both Realtors and builders, according to the Daily Record in Jacksonville.

In Northeast Florida, Greg Matovina of the Northeast Florida Builders Association (NEFBA) and Nancy Garcia of the Northeast Florida Association of Realtors are charged with keeping tabs on those bills and monitoring their success… or lack thereof. The recent melding of the building and real estate industries into one cohesive entity has created a scenario where many laws affect both groups.

“We have two main areas we are focusing on this session. One relates to impact fees and the other involves inclusionary zoning,” said Matovina, chairman of government affairs for NEFBA.

Three of the four counties that comprise Northeast Florida — St. Johns, Clay and Nassau — charge builders with impact fees, funds used to help supplement local infrastructure and schools. Duval County doesn’t charge impact fees and Matovina says that is not likely to change.

“Duval County does a good job of managing its money. There’s a strong commercial tax base, so there’s more money to go around,” he said.

That’s not necessarily true in other parts of the state, such as the Central and South Florida housing market, where impact fees have been instituted. The problem will come if legislation codifying those fees is enacted. Under that scenario, the law would enable cities or counties to tax a new home buyer twice.

“What we are advocating is calculating the amount of taxes that are figured into the purchase, we would like those impact fees deducted over the life of the school or however long the owner pays property taxes. The money in year 30 isn’t worth as much as the money in year one,” Matovina said.

The NEFBA is also paying close attention to a zoning bill that would require developers to build a certain percentage of new homes within a development and sell them at a lower price. Matovina says this law forces developers into building more affordable housing in Florida, but the cheaper homes would come at the expense of the other buyers in the development.

For example:

• If a Florida real estate developer builds 200 homes at an average price of $200,000, the law may require him to make sure 25 of them only cost $100,000.
• The developer will then pass along the cost to the other 175 home buyers, who may end up paying $225,000 to make up the difference.
• The big issue comes 3-5 years down the road when the $100,000 home buyers —- who have to qualify first —- have the option of selling.
• Thus, Matovina believes the law is not fair to the middle-income buyers who won’t be eligible for the cheaper homes, or afford the more expensive one.

“The real answer to affordable housing is programs that take two mills of the seven from the transfer tax for the affordable housing trust fund,” he said. “We will go and target our time to a few key legislators. Lobbying legislators from South and Central Florida is not effective.”

Garcia said the real estate industry is focused on assuring that every home buyer is able to afford and purchase Florida homeowner’s insurance. Affording adequate insurance has become increasingly difficult in recent years due to soaring premiums and hurricanes. Another objective is working with the Florida Department of Highway Safety and Motor Vehicles (HSMV) to get an special homeowner Florida license plate approved — and to direct revenue to an affordable housing trust fund.

“We are pushing for full funding of the trust fund,” Garcia said. “2002 and 2003 were the last two years the trust fund was fully funded. The next year it was capped at $193 million and last year the fund was $443 million.”

Garcia and the Realtors plan to oppose a bill containing language that would raise the document stamp fees.

“The state of Florida already has the highest closing costs in the country. We don’t support raising those costs. From 2002 to 2005, the median price of a home went up 77 percent, while the average income has only gone up 1.4 percent. Adding to the local doc stamp fee adds to the price of a home,” she said. “It would give all local governments the ability to charge doc stamps and we don’t support that.”

Garcia said the bill, if passed, could create a scenario where homeowners are taxed two and three times for the same thing.

Florida Home Loan will keep close watch on these pieces of legislation, and the trade groups’ efforts to influence them, in the coming weeks. We can only hope that the ability of Floridians to afford homes is protected and bolstered by the legislature. Especially with Florida home loans getting a little more expensive each week.