Feature Focus: The Hidden Power Play in Palm Bay’s Agenda for Dec. 19th
How Resolution 2024-46 Could Reshape Housing, Taxes, and City Revenues
Palm Bay, FL — On December 19, 2024, the Palm Bay City Council will vote on Resolution 2024-46, a measure that could have significant implications for the city's housing landscape and tax revenue. The resolution, listed as a consent agenda item, will be approved along with other administrative agenda items without discussion unless pulled by a council member. Consent agenda items are typically used to streamline meeting procedures by grouping routine, non-controversial items into a single vote, allowing the council to focus on more significant matters. This measure proposes to opt out of a state-mandated property tax exemption for certain affordable housing projects under Florida's "Live Local Act."
What Is the Live Local Act?
The Live Local Act empowers developers to bypass the city's comprehensive plan and zoning regulations. This allows them to construct affordable housing projects in commercial, industrial, or mixed-use areas. Developers are not required to obtain zoning changes, special exceptions, or comprehensive plan amendments, significantly streamlining the approval process. This provision is a cornerstone of the Act's strategy to increase the availability of affordable housing across the state. By streamlining the development process, the Act eliminates traditional regulatory barriers, accelerating the timeline for affordable housing projects. For example, developers can bypass the lengthy zoning approval process, which often involves public hearings and city council votes. This means projects can move from proposal to construction more quickly, reducing delays that typically stretch for months or even years. While this approach can expedite construction, it also shifts some zoning and land-use authority away from local governments, raising questions about local control and community input.
Enacted on July 1, 2023, Florida’s Live Local Act is a comprehensive strategy aimed at addressing the state’s affordable housing crisis. The Act provides developers with a range of incentives, including relaxed zoning regulations, tax exemptions, and administrative review privileges for affordable housing developments in commercial, industrial, or mixed-use areas. Developers are eligible for these benefits if at least 40% of their housing units are set aside as affordable for residents earning up to 120% of the Area Median Income (AMI) for a minimum of 30 years.
One of the most significant elements of the Act is the ad valorem property tax exemption. This provision allows rental properties meeting certain criteria to be exempt from property taxes, which can have major implications for municipal tax revenues.
What Does Resolution 2024-46 Do?
Resolution 2024-46, if adopted, will allow Palm Bay to opt out of the state-mandated property tax exemption for certain rental properties outlined in Section 196.1978(3)(o), Florida Statutes. Opting out enables Palm Bay to retain control over its financial strategy by preserving its ability to collect property taxes on these properties. This approach strengthens the city’s financial position, ensuring a stable revenue stream to support essential services like public safety, infrastructure, and education. It also maintains the city's authority over development priorities, enabling local officials to make land-use decisions that align with the city’s long-term growth goals. This exemption, part of the Live Local Act, offers developers significant tax breaks for affordable housing projects. However, by opting out, Palm Bay retains the ability to collect property taxes on these properties, protecting an estimated $1.2 million in annual revenue.
The resolution helps preserve the city’s limited commercial and industrial zones, essential areas that drive economic growth, attract businesses, and support job creation. By safeguarding these zones, Palm Bay ensures that future commercial and industrial projects have room to develop, supporting long-term growth and financial stability. This action aligns with Palm Bay’s 2045 comprehensive plan, which emphasizes strategic growth, a balanced mix of land uses, and the protection of commercial and industrial areas from residential encroachment.
Additionally, Resolution 2024-46 allows land use changes, comprehensive plan amendments, and zoning adjustments to be decided on a case-by-case basis, maintaining local control over future development decisions. This approach provides flexibility for the city to assess each proposal on its merits, balancing the need for affordable housing with the importance of preserving areas designated for commercial and industrial use.
This move is not unique to Palm Bay. Similar actions have been taken by other Florida municipalities, including Lake County and the cities of Seminole, Oviedo, and Deltona. These communities also recognized the importance of maintaining local control, safeguarding economic zones, and protecting essential tax revenue. By following a similar path, Palm Bay aims to balance growth, sustain local governance, and ensure the city’s financial stability into the future.
The Rationale for Opting Out
Supporters of Resolution 2024-46 argue that it preserves essential revenue for city services like public safety and infrastructure. Retained revenue could fund initiatives such as hiring additional police officers or upgrading aging water infrastructure, both of which directly enhance community well-being. According to Interim City Manager Scott Morgan’s legislative memorandum, opting out ensures that Palm Bay’s ad valorem tax revenue remains intact, safeguarding funds critical to the city's budget and financial stability.
The Shimberg Center’s 2023 report also supported the rationale for opting out, stating that the Palm Bay-Melbourne-Titusville MSA has more available affordable housing units than the number of renter households at or below 120% of AMI. This finding provides the legal basis for the city’s eligibility to opt out under state law.
Potential Impacts on Palm Bay
Preservation of Tax Revenue: By opting out, the city maintains its property tax revenue stream. If the tax exemption were applied, Palm Bay would lose revenue from eligible affordable housing projects.
Affordable Housing Availability: While critics argue that opting out could discourage developers from building affordable housing, city officials maintain that the local housing market has a sufficient supply of affordable units. This move aligns with similar decisions made by other Florida municipalities facing similar housing market conditions.
Local Control Over Land Use: By not participating in the tax exemption program, Palm Bay retains more control over land use and zoning decisions, which some view as a win for local governance.
Short-Term and Long-Term Impact: The resolution’s effects will begin on January 1, 2025, and will expire on January 1, 2027, unless renewed. This timeline allows the city to reassess its position and the impact of the opt-out at a future date.
The Significance of This
Resolution 2024-46 is on the consent agenda for the December 19, 2024, Palm Bay City Council meeting. Items on the consent agenda are typically approved without discussion unless a council member requests further review. Given the resolution’s potential impact on affordable housing, tax exemptions, and funding for infrastructure and public safety, this decision is not taken lightly. This feature focus aims to educate readers on the Live Local Act and the proactive measures the Palm Bay City Council is taking to preserve the city’s tax base, ensuring sufficient funding for public safety, infrastructure, and essential services into the future.
Stay Informed with The Palm Bayer
The Palm Bayer is your only source for news exclusively focused on Palm Bay. Our commitment to local journalism means you stay updated on the issues that matter most to the community. For those seeking a deeper understanding of Resolution 2024-46, the comprehensive research paper on the Live Local Act, which informed much of this report, is available for further reading.
In other words, by Palm Bay opting out of the tax exemption, the developers and new residents will not be tax freeloaders at the expense of the other tax payers in Palm Bay. Sounds good and fair to me.