By Carole Hawkins, [email protected]
Better water, lower taxes, less regulation and more affordable housing are key issues real estate professionals will follow during Florida’s 2015 legislative session. Builders are wary of challenges to lien laws and an effort to regulate homeowners associations. The session began March 3 and runs through May 1.
Background
Last year, Florida real estate scored a win when some of the money collected for the Sadowski Trust Fund was used for its intended purpose of low-income housing programs.
That gain could turn into a setback this year.
The money for the trust fund comes from a portion of the documentary stamp tax, which is charged on real estate transactions.
It’s supposed to pay for such programs as gap financing for apartments in low-income areas and for down-payment assistance for first-time homebuyers.
During the recession, the Legislature swept most of the Sadowski money into general revenue for programs unrelated to housing.
Last year, things turned a corner. Lawmakers moved $167.7 million out of a projected $231 million to be collected into the fund.
It was the largest affordable housing appropriation in seven years.
New this year
This year, the Sadowski money faces new competition. Voters in November approved Amendment 1, which mandates 33 percent of the stamp tax revenue be used for land and water conservation.
That could mean spending less on affordable housing, transportation and economic development, programs normally supported through the documentary stamp tax.
The industry says
Florida Realtors will continue to advocate for low income housing programs, said Trey Price, public policy representative for Florida Realtors.
“Our position is a vote for the environment is not a vote against affordable housing,” he said.
The burden should be passed onto the general revenue fund by not sweeping the earmarked money, Price said.
Background
Last year, an attempt was made to roll back some of the rights contractors have to place liens on property when construction bills go unpaid. The initiative failed, but lawmakers are hoping to reintroduce it.
The problem is homeowners can get caught paying twice for work if a general contractor skips town without paying a subcontractor.
New this year
A bill has not been proposed, but discussion on lien laws has continued.
At least one House member has said he wants to exempt residential property from the law, according to the Florida Home Builders Association. Instead, subcontractors could be required to take out performance bonds or lien rights could apply to only the general contractor.
The industry says
The builders association opposes any sweeping change to lien laws.
A performance bond is too high of a burden for small subcontractors, FHBA says.
Also, lien laws are complex and tinkering with them could have unintended consequences on banks and title companies, which are set up to work with rules currently in place.
“We don’t believe anyone should have to pay twice for work,” said Linder. “But we don’t believe there are that many instances where this is an issue, or that it’s overwhelming.”
The homebuilders association believes the Legislature should make targeted changes to the law to address fraud and require better consumer noticing.
Background
Florida Realtors will once again ask that sales tax on commercial rentals be phased out.
Florida is the only state to charge such a tax and the 6 percent rate puts Florida businesses at a competitive disadvantage with neighboring states.
Last year, Gov. Rick Scott included a 1 percent reduction in the tax in his budget, but legislators spent the state’s first post-recession surplus on other tax cuts.
New this year
This year Florida’s surplus will again be close to $1 billion, but lowering the sales tax for commercial leases is not in the governor’s budget.
The industry says
Florida Realtors are pushing the Legislature to decrease the tax by 1 percent as part of this year’s budget.
“It’s important to businesses that are already here and it’s important to businesses that want to move here,” said Trey Price, policy representative for Florida Realtors.
“In Jacksonville, for example, it’s very easy for businesses to look a few miles up the road to Georgia where the tax is not applicable.”
Background
Water protection and conservation gained traction last year and the momentum is expected to continue.
The issue cuts both ways for real estate and building professionals. Clean water generally improves land values, but tougher regulations can impede development.
Florida’s water problems include polluted and low-flowing freshwater springs to low flows in the St. Johns River and into the Apalachicola Bay. There also is damage to the Everglades and the Indian River Lagoon.
In 2014, $172 million was appropriated for water restoration projects in South Florida. A bill to protect freshwater springs — in part, by limiting septic tanks — passed in the Senate.
And, voters approved an amendment to divert an estimated $19 billion over 20 years into water and land conservation.
As this was taking place, lawmakers began calling for a statewide approach to water policy.
New this year
House Speaker Steve Crisafulli, R-Merritt Island, said in January water policy would be a top priority during the session. In the past, he has said a policy should address agriculture, springs protection and water restoration projects in all parts of the state.
In February, a business-backed water resources plan, HB 7003, was filed by the House State Affairs Committee.
The measure would impose best management practices for natural springs, the Everglades and Lake Okeechobee. It also would direct water-management districts to implement a water-management plan across central Florida.
The Senate has drafted SB 918, a bill that specifies how to use money for water projects statewide. Like last year’s Senate bill, it would create protection zones around springs. It also calls for a remediation plan when septic tanks within those zones cause pollution.
The industry says
Florida Realtors generally support the creation of a statewide water policy.
The state’s population stands at about 20 million and is expected to increase to 30 million in coming years, said Trey Goldman, legislative counsel for Florida Realtors.
“What we need going forward is to make sure our water policy is comprehensive and allows for Florida to grow,” he said.
The association is watching to make sure any policies adopted are matched with funding.
The Florida Home Builders Association, though, prefers the House bill to the Senate’s. Either one could end up regulating septic tanks near major springs. But, the House bill would first analyze which factors contribute significantly to spring issues. The approach doesn’t assume septic tanks are a contributing problem for pollution at every spring.
“We want science to determine what impacts there are on springs,” said FHBA President Jerry Linder. “Once we have the data, we can look for fixes.”
Background
Last year, a bill was filed in the Senate that would have assigned an ombudsman and created state oversight for complaints of abuses by homeowner’s association. Similar protections are already in place for condominium associations.
The 2014 bill, SB 1438, was never heard.
New this year
The Florida Home Builders Association expects a similar bill to be filed this year.
The industry says
The builders say condos and housing developments are apples and oranges and their associations should not be regulated in the same way.
A condo development is entirely built when homeowners start purchasing units and, eventually, take controlling interest in the association.
In the case of single family homes, developers can hold unbuilt lots for years.
Shifting rights to homeowners has the potential to undermine a developer’s investment in a new community — for example, if the future square footage of homes or the placement of garages were to be challenged.
“The proposal is overkill,” said Linder. “It’s just not the same situation.”