The availability, or lack thereof, of affordable and workforce housing for low-income individuals and families in South Florida is an ever-growing concern, which concern was further exacerbated by the COVID-19 pandemic and the subsequent influx of out-of-state transplants to the State of Florida. Recent hurricanes on both coasts have caused even more stress in the availability of affordable housing inventory throughout the state. In an effort to alleviate the affordable housing crisis by incentivizing the development of additional affordable rental housing inventory, the state of Florida offers certain economic advantages to developers and investors that participate in such development. Of these economic advantages, one of the most notable and beneficial are ad valorem tax discounts and exemptions.

The ad valorem tax exemptions in Florida for projects that qualify as being wholly owned by an entity that is a not-for-profit corporation (or its wholly owned subsidiary), charitable under Section 501(c)(3) of the Internal Revenue Code and in compliance with other requirements, as further set forth in Florida Statutes Section 196.1978(1), and homes for the aged pursuant to Florida Statutes Section 196.1975, in each case, have not substantially changed in recent years. However, since the COVID-19 pandemic, the Florida Legislature significantly expanded the ad valorem tax benefits for developers constructing certain multifamily affordable housing projects. Specifically, Section 196.1978(2)(a) was amended in June 2021, effective July 1, 2021, to increase the 50% ad valorem tax discount available to qualifying affordable housing multifamily projects to a 100% exemption.

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