Small-time waterfront lodgings reeling from high property tax rates and the threat of redevelopment will finally get some relief… if only a little.

Manatee County commissioners unanimously approved a plan Tuesday to allow some of those businesses to defer a portion of their taxes until the properties are sold or change use. The measure is billed as an emergency option for small beach and riverfront businesses struggling to make ends meet due to increasingly high property taxes.

“This is not a panacea for everything. It’s more of a lifeboat,” said Manatee County Commissioner Pat Glass.

The Florida State Legislature agreed earlier this year to allow waterfront lodgings to qualify for tax deferrals.

Manatee County is believed to be one of only a handful in Florida to take advantage of it, but that could very well change. Officials from Sarasota city and county say they also want to provide incentives to keep waterfront businesses open, and will watch Manatee’s program closely.

The Florida property tax deferment plan is meant to help people like Tom and Sabine Buehler, owners of Haley’s Motel on Anna Maria Island.

Skyrocketing insurance and property tax rates may mean their modest, 13-room lodging — they say it has “1953 island charm” — will soon be a thing of the past.

“Hopefully, this is just a first step and they provide other opportunities for us,” said Sabine Buehler, who doesn’t expect to be able to make next month’s Florida mortgage payment.

Inexpensive motels like Haley’s Motel represent the character of a fast-disappearing Old Florida and help bring tourism to the area, local business owners say.

“When resorts get a fever, my business gets the flu. These people are on the brink. If they go down, I go down,” said Wayne Genthner, owner of Wolfmouth Charters on Longboat Key.

The deferred taxes would be those normally due that are greater than a 5 percent increase in a waterfront business’ property tax valuation, based on the 2002 appraisal. Business owners would have to pay interest on the deferral at a variable rate, likely to hover around 7-8 percent, not to exceed 9.5 percent.

Only taxes due to the county — not school district, municipal or other levies — may be deferred. Any recreational and commercial real estate abutting “navigable water bodies” in Manatee County and meeting strict financial requirements would qualify for the deferral.

County officials have no idea how many businesses will ultimately qualify or seek deferrals, but have set aside $250,000 in this year’s budget for the program, said county Finance Director Jim Seuffert.
Critics of such deferrals say they only amount to breaks for a select group of constituencies and don’t solve the overall problems with the tax system, such as the assessment system and government spending, but citizens having a hard time making the Florida home loan payments each month will take what they can get.

“This is a patch. What are they doing with other groups in the county that are facing high property taxes?” asked Harvey Bennett, of Florida TaxWatch, a non-partisan watchdog group.

Sarasota County Budget Manager Jeff Seward said if Manatee’s program passes legal muster, Sarasota County plans to adopt something similar. The city of Sarasota also would probably support such a plan, but no one has brought it up, said City Manager Mike McNees. Charlotte County also has not discussed a “working waterfront” proposal.

The deferral would become a lien on the property, something that may or may not appeal to many struggling business owners.

The Buehlers bought their motel in 2002 and spent $8,000 in taxes for that year. They paid $42,000 this year. Add to that their monthly expenses, not including taxes or insurance, of about $30,000. They take in about $57,000 a month during the peak season. The deferral, which they would realize on their upcoming tax bill, would total about $15,000.

This couple and many more like them would have a difficult time with Florida home mortgages if not for this last-ditch relief effort. Currently, a property’s assessed valuation is based on its highest and best potential use, which in recent years has meant condominiums.

The county is currently tweaking a proposal for the Legislature that would call for changes to the state’s tax law to address how these businesses are assessed, said Patricia McVoy, senior assistant county attorney.

In the meantime, a tax deferral is better than nothing.

Manatee County Commissioners can take a step toward protecting area resort owners by adopting a tax-abeyance ordinance today.

But that will amount to only a small bandage on a gaping wound that needs complex surgery and reconstruction, a Bradenton Herald editorial states. That’s what the local structure of property taxes essentially amounts to here in Florida.

Commissioners will consider a proposal that will cap the assessed valuation on temporary lodgings on Anna Maria Island and Longboat Key at their 2002 or 2003 rates and allow only a 5 percent annual increase until the property is sold. At that point the owners will be expected to pay the taxes — a major point of contention in this era of steep Florida mortgage payments — on the full value plus arrears during the period of abeyance.

It is hoped that this limit will enable owners of small resorts, who are considered the bread and butter of the local tourism industry, from being taxed out of existence by soaring property values. In the Florida real estate run-up of the last four years some small, mom-and-pop motels have seen their tax bills quadruple.

Unable to raise room rates to compensate for such cost, business owners are giving up their trade, selling out to developers who turn these properties into luxury homes or condos, whose buyers’ spending doesn’t begin to match that of short-term tourists.

Industry figures say every dollar spent at a motel room generates another $4 in spending on something else that benefits the overall economy.

Certainly the property tax relief is needed now, and action today could provide it quickly for those who have stuck it out until now. But the relief is not forgiveness — just a temporary loan. Particularly for those who are already struggling with high insurance costs and adjustable-rate Florida home loan payments, it’s not going to be a long-term solution.

Owners will still have to pay the full tax burden if and when they decide to sell out. Of course, it can be argued with the pot of money they will get for their inflated property, they will then be able to afford to pay the taxes. That is perhaps true, but begs the question of whether such a property tax policy is fair to people just trying to make a living.

Indeed, it calls into question the very practice of assessing such property according to its “highest and best” use. The only way to give permanent relief — and equity — to these and other businesses in a rapidly-rising Florida housing market is to remove that “highest and best” designation and assess them at their current use.

Reform of this statute is just one part of a larger property tax reform movement that is generating support across Florida in the current era of runaway home prices generating runaway taxes, not just on business owners but homeowners, too.

There are calls for capping property tax increases in much the same way as the Save Our Homes amendment capped assessment increases. There are also calls for making Save Our Homes portable, to allow people locked into low-taxed homes to take that protection with them if they move to a larger, more expensive home elsewhere in the state, or at least in a region.

It’s obvious that the whole issue of tax reform should be the top priority, along with insurance reform, of the new governor and next state Legislature when it convenes next spring. It’s too early to lobby for specific policy changes, but this obviously calls for a debate of all property tax issues facing Floridians.

Few workers make a six-figure income in Sarasota or Manatee County. Sadly, that’s what a buyer needs in order to afford a median-priced home in either place, according to today’s Bradenton Herald.

At least $109,248 a year must be earned to realistically afford a home at December’s median sales price of $322,700, the Florida Housing Coalition said in its Florida Priced Out Report, a report on home affordability in Southwest Florida. To illustrate how lofty that salary figure is, nary a one of the 63 local occupations the coalition studied - including teachers, firefighters and police officers - paid remotely close to that threshold.

“It’s just further proof that our work force is rapidly being priced out of the market with the way home prices are going,” said Michael Davis, the coalition’s executive director.

Based on the income requirement, the Manatee / Sarasota housing market was ranked fifth from the bottom in terms of affordability among the 18 metro areas the coalition studied in the Sunshine State. Only the Ft. Lauderdale, Miami, West Palm Beach and Naples housing markets had higher income requirements to meet the necessary Florida home mortgage loan requirements and buy a median-priced home.

At the opposite end of the housing spectrum, the Ocala, Tallahassee and Pensacola markets were rated the most affordable.

While the South Florida housing market has become overwhelmingly expensive for most, the situation was somewhat better for renters in Sarasota and Manatee, who had to earn about $21 an hour to afford a two-bedroom apartment at the market rate of $1,095 per month. That ranked as the region’s seventh least-affordable rental market, with some workers having to work more than 100 hours per week to afford it.

These results came as no surprise to affordable housing advocates.

“This report shows that all of our service personnel, our work force in general, is in trouble. They simply can’t find housing at prices they can get a mortgage for.” said Suzie Dobbs, the county’s affordable/work-force housing coordinator.

For example, an elementary school teacher making a decent salary of $44,199 a year would qualify for a Florida home loan of $131,255 at the most. That is about $191,000 short of what’s needed to close on a median-priced home.

Even construction managers, the region’s top-paying occupation, don’t make enough to be able to completely finance a median-priced home. As a result, a growing number of middle class workers are seeking financial help from various government programs to purchase a home.

Despite recent progress, affordable housing programs are being stretched by stagnant funding and escalating demand. The $1.7 million Manatee received from the state’s Housing Trust Fund was gone in just seven months, with no funds remaining for the rest of the fiscal year. That sum will grow to $2.3 million in the coming year, the maximum allowed under a state cap.

“There’s money sitting there that we can’t get to. We would get two to three times more money and be able to help even more people if the cap wasn’t there,” said Denise Thomas, the county’s housing and community development coordinator.

Last October, Manatee County revamped its affordable housing planning to combat the rising house prices that have put home ownership out of reach for many area families. Now, county officials are hailing a new condo project in Ellenton, Fla., as the first step in the county’s efforts to combine affordable, or “workforce,” market-priced housing.

At least 25 percent of the 136 condos developed by the Barrington Group will be offered at about $160,000, a price Manatee County classifies as affordable in the Southwest Florida housing market. Another 25 percent will be priced around $192,000, a level considered attainable for those seeking “workforce” housing. The rest would be sold at full market price, or between $230,000 and $250,000.

“They’re actually proposing to do all three in the same project, which is wonderful. Hopefully, there’s something for everyone,” said Suzie Dobbs, the county’s affordable/workforce housing coordinator.

Buyers paying full market price will get more square footage and a garage attached. Each of the 14 proposed buildings will include each of the three types of housing.

This news comes as the latest in a string of efforts by many Florida cities to combat the growing housing affordability crisis. On the other side of the state, Coral Springs recently adopted the Broward County real estate market’s first official ordinance (although that plan is centered around Florida home loan assistance for prospective middle-income buyers). Lee County officials have also been actively pursuing a solution to the problem.

“We’re hoping to avoid that feeling, ‘Oh, that’s an affordable housing project,’ That’s not really the case. People have to have jobs; they just can’t make over a certain amount,” said Ronda Gallehue, a V.P. with the Barrington Group.

Local governments in Southwest Florida have been trying to draft effective housing programs in the last few years as rocketing housing costs have priced more and more working families out of home ownership. The U.S. Department of Housing and Urban Development (HUD) defines families that spend more than 30 percent of their gross income on housing to be “cost burdened.”

That classification comprises more than a quarter of Manatee households, according to recent Florida Housing Data Clearinghouse statistics.

• The county’s guidelines for affordable and “workforce” housing are based on family size and income.
• A family of four with an income of $70,080 or less would qualify for “affordable housing” that costs no more than $160,000.
• A family with an income no higher than $75,000 would pay no more than $192,000 for workforce housing.
• Developments that set aside at least 10 percent of their units for “workforce” housing, or 25 percent for affordable housing, qualify for a faster approval process from the county.

With construction and labor costs continually rising, the chance to cut down the review time to six months - a process that normally takes 18-24 months - can mean big savings for the area’s builders and developers. The problem of finding and retaining employees in a market where the median price is about $322,000 is also forcing builders to include lower-priced housing.

And, with Florida home loans rising more than a full percentage point in the last 12 months, and looking like they may inch higher still as the year progresses, housing demand won’t be what it once was, and builders are having to reassess their thinking.

“We do have certain developers that really want to do this because there’s such a lack of housing below the $300,000 range that it’s handicapping them,” Dobbs said.