Proposed Tax Reform Could Slam Renters
Perhaps, the Daytona Beach News-Journal surmises, state legislators wrestling with how to revamp the property tax system should spend some time with Linda Fitzgibbons.
The 43-year-old often racks up close to 60 hours a week working as a hotel clerk in Daytona Beach, and is thinking about getting a second job.
Fitzgibbons is barely earning enough to support her 16-year-old son and pay her half of the $1,000 rent she shares with a friend.
“I have $70 to my name,” Fitzgibbons said.
Fitzgibbons is among those forgotten in Florida’s property tax debate, as Florida lawmakers have been focused on giving relief to home and business owners through much of the current legislative session.
Little has been proposed to help renters - who also have been socked by skyrocketing property taxes through higher monthly rents.
And some of the proposals - replacing property taxes with a higher sales tax or expanding the benefits of the homestead exemption - could actually make things harder on renters.
Florida’s property tax laws - designed specifically to aid homesteaded homeowners - have helped the Sunshine State evolve into a tougher place rental-wise.
In 2004, the Sunshine State had the highest portion of renters in the nation - 51 percent - funneling more than 30 percent of their income to rent and utilities.
Volusia County also is a haven for rent struggles.
The county, known for rising Florida home loan costs in recent years, also ranked 43rd in the nation for the number of renters using more than 30 percent of their pay to rent and utilities in 2004.
With about 60 percent of Volusia households at an income below $50,000, you don’t need an economics degree to understand the issue.
In Florida, fair market value rent for a one-bedroom apartment is $687, and people need to earn at least $13 an hour to afford that monthly payment.
Owners of rental property feel as forgotten as their tenants.
Marvin Miller, a partner in a 30-year-old Ormond Beach real estate business with more than 100 units, said the abyss between what homestead and non-homestead properties dole out for taxes is digging deeply into his income.
“We can’t keep up with it. That’s the problem,” said Miller, who started selling some of his property after his tax bill more than doubled in the past few years.
“Almost every one of our rental units has costs exceeding income. It’s very hard to break even,” Miller said. “We’re trying to raise rent in small increments. Maybe if we did it all at once, Tallahassee would hear it better.”
Miller doesn’t see any proposals coming out of the state capitol that are tackling the basic inequity in the tax system, which favors Florida home mortgage holders unfavorably, many believe.
“It’s unfortunate that the people who need the most help are getting the least help,” Miller said. “(People are) doubling and tripling up in apartments. They’re in survival mode.”
Executive director of Halifax Habitat for Humanity Lori Gillooly constantly sees the struggle of people who can’t even dream of qualifying for a Florida mortgage and buying a home on their own.
About 90 percent of the people who turn to Habitat for help are in service sector jobs, trying to make a living. Many are spending more than 60 percent of their income on housing.
“This is why working families become homeless,” said Gillooly, who worries that legislative proposals to help homeowners with their taxes will push financially shaky renters over the edge.
“We have to see some kind of relief across the board… This is your work force. How can you expect your community to run if people can’t afford to live here?”
SOURCE: Daytona Beach News-Journal
