SOUTH TALLAHASSEE, FL (WTXL) — Relief is coming to homeowners when it comes to paying property taxes, but experts warn of unintended consequences for the housing industry — and that impact could fall on home buyers and renters.
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With the passing of Amendment 3, housing experts warn it could present unintended consequences for the industry.
The amendment guarantees existing homeowners a lower property tax bill, increasing the homestead exemption up to $250,000 by 2028.
But Leon County estimates a loss of about $70.7 million per year, and the City of Tallahassee projects a $29 million loss.
Sam Staley, director of Florida State University's DeVoe L. Moore Institute, warns the change could have a cost beyond local budgets.
"Right now, a very important consequence of Amendment 3 could be making housing affordability worse," Staley said.
Staley says local governments could impose more fees and higher tax rates as they learn how to maintain services with lower budgets — and as the housing supply trails behind.
"Existing homeowners might see property taxes go down, but they'll see their home values go up, so they actually still might end up paying more taxes based on that. But at the same time, we're going to find housing affordability become worse as housing prices go up, supply doesn't exist to meet demand," Staley said.
For Christic Henry, the managing broker and president of Kingdom First Realty, with more than 20 years of experience, the first rule to remember in real estate is about more than the home itself.
"You are not just selling a property. You're selling place,” she said. “We market proximity. We market geography. We market its ability to have access to public parks. We market its ability to have access to multimodal transportation.”
That's all maintained by local governments.
Because rental properties don't qualify for the exemption, Henry worries those costs could be passed on to renters.
"There's an already existing large gap between affordability and attainability for housing here locally, so this kind of amendment, which takes away resources to address that, quite frankly, just exacerbates an existing problem," Henry said.
Florida Realtors takes a different stance, arguing that it keeps more of voters' own cash in their pockets during inflation.
In a statement sent to me, the group said in part that they've worked for decades to reduce barriers to homeownership and look forward to building on the partnership as Florida puts the relief into place responsibly.
Read full statement below:
“This Election Day, Florida homeowners chose property-tax relief. At a time when families are paying more for housing, insurance, groceries and everyday necessities, voters seized the opportunity to keep more of their own hard-earned money, taking a meaningful step toward making Florida a more affordable place to buy, own and keep a home. Florida Realtors was proud to stand with homeowners in supporting Amendment 3. We have worked with state and local leaders for decades to reduce barriers to homeownership, and we look forward to building on that partnership as Florida puts this relief into place responsibly, without compromising the essential services our communities depend on.”
Henry understands why homeowners turned toward relief, but believes the ultimate solution requires everyone — from government to community — to find a way for the industry to work for all.
"The only solution to that is to create an economy of vitality and opportunity where people could possibly earn more," Henry said.
When it comes to long-term impacts of Amendment 3, Staley says the DeVoe Moore Institute hasn't done any forecasting, but what happens next depends on what happens locally.
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