Monday, October 30, 2006


Miami-Dade County government reversed its earlier firmly-held position and signaled its intention to establish property tax relief for apartment owners who dedicate certain of their units to affordable housing under a specified set of circumstances.

County government honchos are poised to introduce a program that will offer tax relief to a small segment of apartment building owners who offer affordable rentals.

The program is only a first step in addressing a growing and somewhat controversial increase in the tax burden shouldered by multifamily rental unit owners as a result of the real estate boom of the past five years, but it's the only remedy county leaders believe is allowed under current state law.

Many more property owners could be helped if the state Legislature changed tax laws, said County Manager George Burgess. Some have lobbied the Legislature to create special tax abatements to benefit apartment owners--and in turn renters--in the same way the homestead exemption and the Save Our Homes 3% tax cap benefit properties owned and occupied by permanent residents of Florida. Rental properties don't qualify for homestead exemption benefits.

Although no change in legislation authorizes different treatment of rental unit owners than before the last session of the Legislature, the County Manager and his appointed Property Appraiser nonetheless fashioned guidelines to provide relief in the very area in which the Legislature was petitioned in 2006--unsuccessfully. "Let's do whatever we can do locally to try to provide an opportunity for some of these owners of affordable workforce housing to get them a break," Burgess said.

The new program will be available to apartment buildings or complexes that were built with restrictive financing that gave them lower interest rates or some other benefit in exchange for keeping rents in a range defined as affordable by the federal government.

Typically these are larger apartment complexes. In order to get the favorable loan, the owner had to set aside some or all of the rental units in the building or complex for people earning low to medium wages.

If the borrowers violate these affordable-rent covenants, they run the risk of the loan being in default or payment being accelerated. In most cases, the owners signed rental agreements with lenders that run 20 or 30 years, said Frank Jacobs, Miami-Dade County Property Appraiser. They are not currently receiving county property tax breaks.

Under the current state law, Jacobs said, he can take those financing agreements and draft a land-use restriction for the owners to sign that mirrors the agreement. A county property tax break can be given once the land-use restriction is in place.

The county will publish applications for the tax relief program in newspapers and magazines that target business owners.

Jacobs said he doesn't know how many apartment owners will benefit from the new program, which is expected to begin in the next few weeks. The County's best estimate at the moment is that between 30 and 40 properties may qualify.

Buildings already subsidized with Section 8 vouchers or financed with Low Incoming Housing Tax Credits (LIHTC) are not eligible for the program.

Burgess said Miami-Dade will continue to lobby the Legislature for lower property taxes for other multifamily apartment building owners. Many landlords have complained that double-digit tax increases and out-of-control insurance costs have forced them to hike rents or convert their units to condos.

About-face for the County?

This appears to be a fascinating about-face for County property tax officials, who have consistently taken the position in recent interviews with the press that this very form of tax relief is not AUTHORIZED by state law, but PROHIBITED by it.

For example, in The Miami Herald issue of September 13, 2005, some city leaders had gone so far as to complain that the Miami-Dade Property Appraiser was undermining efforts to improve the availability of reasonably priced housing. City leaders complained the county was raising taxes so high on rental housing owners they must either jack up rents or sell.

At that time, Jacobs said he lacked authority to assess affordable (although not necessarily government rent-restricted) apartment buildings any differently than any other property in the county, saying he is just following the law and cannot bend the rules for public officials who want him to go easy on middle-income earners. He said the law allows him to give a break to some low-income housing projects--for instance, the low-income tax credit housing backed by the federal government--but does not give him the discretion to pick and choose others. Jacobs said that until the Florida Legislature addressed the issue, his hands were tied.

But although state legislators balked last session at passing a measure aimed at providing tax relief for rental owners, some 6 weeks after The Miami Herald article quoting Jacobs as saying his hands were tied, somehow the County is now able to offer the very relief Jacobs had said on September 13 he was unable to offer.

Obviously, there is something missing from this picture. Give us a little while to look into this. We'll get back to you about this--hopefully in our next edition of Florida Property Tax News.

Daniel A. Weiss is a former Attorney Special Master for the Miami-Dade County Value Adjustment Board with over 25 years property tax experience. Mr. Weiss represented the Miami-Dade County taxing authorities in litigation and appeals between 1981 and 1995 and has since represented taxpayers in property tax matters. In Florida Super Lawyers 2006, Weiss was named one of the top 6 local government lawyers in South Florida.

In Florida Trend magazine™'s Legal Elite's issue, July 2004, Mr. Weiss was selected by his peers as one of the top 30 government lawyers in the State of Florida.

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