Legislative Wrap-Up: The Long Journey to the Governor’s Desk
By Courtney Barnard
FAA Government Affairs Director
The Florida legislative sessions is 60 days long. It’s a small window of time for bills to be written, be filed, pass through committees, head to a floor vote, and finally (hopefully) be placed on the dark polished wood desk of the governor for his signature. The governor must sign or veto all bills within 15 days of sine die (end of the session). How easy and convenient that we only have to focus on legislative issues for such a short period of time!
Unfortunately, it isn’t quite that simple. Legislative issues can go on for months or years, and one bill may not fix everything. It’s a constant battle, year after year to make sure the voices of Florida’s apartment industry are heard in Tallahassee. The top three Florida Apartment Association priority issues for 2018 — Sadowski funding, doorstep trash collection, and the need to inform residents about requirements to carry renters insurance have all been examples of this long and complex process.
Sadoski Affordable Housing Funds
Let’s go back 26 years to 1992. The economy is recovering from a recession, and the housing market is picking up steam. However, there isn’t enough housing to keep up with demand. Many people can’t afford rising home prices and the apartment industry is still feeling the burn of federal tax reform nearly six years later. There is outcry for affordable housing reverberating across Florida and the nation. Tallahassee’s answer is the Sadowski Act. It’s simple: a 1% tax is added to every real estate transaction, and those funds are put into a trust fund. Each year the trust fund gives out loans to build and refurbish apartments and homes to provide affordable housing. Does this all sound familiar?
For the past 26 years Florida has had an affordable housing solution. Every year, FAA members flock to Tallahassee to lobby policymakers on the importance of this solution and request again and again that the trust fund monies not be transferred (“swept” is the official term) to fund other projects. However, nearly every year the funds are cut and swept. According to the Sadowski Coalition, more than $2 billion has been diverted away from housing since the creation of the Sadowski Trust Fund in 1992. This is hurting Floridians and this is hurting the apartment industry.
Rising construction costs from labor shortages, lumber and steel tariffs, and skyrocketing land prices can rarely justify the building of affordable apartment communities or modest homes. The Federal Reserve Economic Data cites the average home sale in the first quarter of 2018 was $392,900 and the average new-build home sales prices was $376,700, according to the U.S. Census Bureau. Based on this data reflects, an income of more than $100,000 is needed to purchase the average home in the United States. The median household income, however, is $57,617 according to the Census Bureau.
Home buying is out of reach for many Americans, and many rents are rising to cover the similar high construction and permitting costs to build apartments. According to Fannie Mae Multifamily, the average unit costs $233 per square foot to build, and construction costs have increased 14% in the past two years. To top it off, there are simply not enough apartments. The National Apartment Association estimates that more than 400,000 apartments must be added to U.S. inventory each year to keep up with demand.
On top of rising costs and high demand, many local municipalities are starting to mandate inclusionary zoning, which forces apartment communities to set aside a certain percentage of units as affordable. This can further drive up costs and demand.
This is one reason why FAA members come back to Tallahassee each year: This legislation impacts members’ paychecks, families, and job security. As costs go up, there are fewer solid economic reasons for banks to lend money to build apartments. Sadowski funds are needed to fill this gap. In 2018, FAA was able to successfully advocate for $79 million in Sadowski Funds. This is a fraction of the total funds collected from doc stamp fees, but it is a step in the right direction.
Doorstep Trash Collection
A second long-term FAA priority issue is that of doorstep trash collection. This year, FAA partnered with the doorstep trash collection industry to draft House Bill 529, sponsored by Rep. Manny Diaz (R 103) and Senate Bill 746, sponsored by Sen. Aaron Bean (R-4) to clarify the Florida fire code and allow the doorstep trash industry to continue business as usual.
For nearly two years prior to the 2018 legislative session, there was confusion among local fire marshals as to whether or not doorstep trash collection violated the Florida fire code. Some fire marshals wanted doorstep trash collection to halt immediately, contending the trash bins outside of apartment doors were potential fire or escape hazards. Others considered the service a valuable way to ensure the removal of waste and subsequent pests and hazards from properties daily. The doorstep trash industry was faced with having to change its bins and adjust collection times, or lose contracts and jobs, depending on the whim of each city official.
The doorstep trash industry banded together and met with fire officials and rule-making bodies, citing how the industry has existed for decades without any recorded fire injuries in any of the 50 states. Despite hours of meetings and testimony, nothing changed, and the possibility loomed that Florida would lose a $68 million dollar industry and more than 1,200 jobs. HB 529 and SB 746 were filed to save doorstep trash collection in Florida, and, thanks in part to the lobbying efforts of FAA members, HB 529 was signed into law on April 6 and will provide industry protection for the next three years.
For more information on the Doorstep Trash Collection bill click here.
“I didn’t know my stuff wasn’t covered! I’m taking you to court!” How many times have you heard this? The need for renters insurance is a tale as old as time. According to the Insurance Institute of America, fewer than 40 percent of those who lease their dwelling have any form of renters insurance.
Unfortunately, not much has changed despite years of legislation to protect apartment owners and residents alike. There is no Florida statute that allows an apartment owner to require renter insurance, whether it is insurance to cover the resident’s possessions or liability insurance in case they damage the unit or their pet bites another resident. Apartment owners are often caught in the middle of these misunderstandings and can be dragged into costly legal battles as a result. While many apartment communities do require their residents to carry liability insurance, the apartment owner must rely on the precedence of court rulings to justify the requirement, because Florida statutes do not address this.
Expect to see this legislation again in 2019, as House Bill 467 sponsored by Rep. Bobby DuBose (D-94) and Senate Bill 678 sponsored by Sen. Audrey Gibson (D-6) did not make it to the governor’s desk. FAA has continued to support legislation to allow an apartment owner to specify what type of insurance coverage a resident must carry. The fight isn’t over.
What are we fighting for now?
Even though the governor's pen is back in its inkwell until next spring, FAA advocacy continues beyond the short legislative session. The FAA government affairs team is busy meeting with legislators and candidates seeking election in November, building a support system in Tallahassee and making members’ voice known. FAA has met with Sen. Kathleen Passidomo (R-28) to express support and urge her to refile legislation that would ban the Florida legislature from sweeping Sadowski funds. Additionally, FAA members have joined a Sadowski taskforce to help shape the future the Sadowski Coalition and fight for increased dollars to go to apartments.
FAA is monitoring local development issues such as increased impact and permitting fees, source of income legislation, and other issues that could reach Tallahassee. It’s a year-round job.
If you have a legislative issue to bring to the attention of FAA, email Courtney Barnard, FAA government affairs director, at Courtney@faahq.org