There are more questions than answers concerning new bills signed into Florida Law which affect Real Estate.
It is no secret there’s a housing shortage in Florida. This has generated an increase in the price of homes and rental rates. Florida Atlantic University Real Estate Economist Ken H. Johnson, says rental rates increased 19.25% in Orlando over the span of one year, between 2021 and 2022. In the Orlando area, almost 60% of voters voted in November 2022 to temporarily cap rent increases at no more than 9.8%. The measure was blocked by a lawsuit and later by a new Florida bill, and never went into effect.
Beginning on July 1, 2023, the new law “Live Local Act,” deletes “the authority of local governments to adopt or maintain laws, ordinances, rules, or other measures that would have the effect of imposing controls on rents.” The thinking behind it is it will avoid having Builders leave cities enacting rental caps which they estimate would increase prices more than normal market competition. In order to prompt for more affordable housing construction this bill is “providing an exemption from ad valorem taxation for land that meets certain criteria; authorizing local governments to adopt ordinances to provide an ad valorem tax exemption for portions of property used to provide affordable housing meeting certain requirements.”
SB 264 passed the Florida Legislature, was signed by Gov. Ron DeSantis, and is in effect since July 1, 2023. This bill prohibits “foreign principals from purchasing agricultural land or having more than a de minimus indirect interest in such land, and certain real property in this state.” The bill also states these foreign principals “are forbidden from owning agricultural land, from owning or acquiring any interest in real property within 10 miles of any military installation or critical infrastructure in the state.”
Foreign principals from countries of concern “include the People’s Republic of China, the Russian Federation, the Islamic Republic of Iran, the Democratic People’s Republic of Korea, the Republic of Cuba, the Venezuelan regime of Nicolás Maduro, and the Syrian Arab Republic.”
Since the law is untested in the courts, it is important for buyers and sellers to consult an attorney to explain how a specific clause will impact that specific buyer. There are also Fair Housing Act implications. Florida Realtors ® lawyer Vice President of Law and Policy and General Counsel Juana Watkins says, “it’s neither your intent nor motive to discriminate against buyers based upon any protected classes,” she says. “Do not ask buyers questions about their national origin.”
SB 170 requires counties and cities to produce a “business impact estimate” prior to passing an ordinance. Per Florida Realtors this bill “has the potential to help many local businesses, including vacation rental companies, fight back against harmful regulations causing them economic harm.”
The bill has been approved by Governor DeSantis and will take effect October 1, 2023.
Post by Ann Hoff-Fanaian. Photo: Photo by Gautier Salles on Unsplash