SUBJECT/RECOMMENDATION:
Title
Discuss the Live Local Tax Exemption Opt Out Resolution.
Body
SUMMARY:
On 12/05/2024, Clearwater City council approved resolution 24-19, which stipulated that the City of Clearwater, pursuant to Florida state statute 196.1978(3)(o), would opt out of the provision in the live local act that would provide a 75% exemption to developments that would otherwise qualify under the act.
Section 196.1978(3)(d), Florida Statutes, allows for rental properties with 71 units or more that provide housing to people earning between 80% and 120% of the Area Median Income (AMI) within a Metropolitan Statistical Area (MSA) to be exempt from ad valorem property taxes. Beginning with the 2025 tax roll, local taxing authorities will have the option to "opt out" of this exemption. This opt-out provision is available if the most current Shimberg Center for Housing Studies Annual Report (Shimberg Report) identifies a surplus of affordable and available rental units in the area and requirements are met. The most recent Shimberg Report indicates that there is a surplus of affordable and available units within the Tampa-St. Petersburg-Clearwater MSA, which includes Pinellas County, for households that meet the income requirements for the 80%-120% AMI tax exemption. Based on this finding, the City of Clearwater, being located in Pinellas County, is eligible to exercise the opt-out option under Section 196.1978(3)(o), Florida Statutes. The resolution will take effect on January 1, 2025 and will expire on January 1, 2026. It may be renewed prior to that expiration date in accordance with the provisions of Section 196.1978(3)(o), Florida Statutes.
City staff recommended approval of this resolution due to concerns about the potential reduction in tax revenue. Additionally, there were issues with the structure of the exemption, as it does not ensure that the benefits will be passed on to tenants.
It is important to note that units constructed under the Live Local Act, which serve households earning below 80% AMI, will still be eligible for a 100% property tax exemption, as local governments are unable to opt out of this provision.