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Why are Pasco ‘luxury’ apartments getting affordable housing tax break?

The state law allows owners of existing apartments to seek significant tax breaks even if they build no new affordable housing.
 
Pasco County commissioners worry about tax revenue that will be lost under the Live Local law. While the law was sold as a solution to Florida's housing affordability crisis, apartment owners can claim tax rebates even if they don't offer particularly low rents.
Pasco County commissioners worry about tax revenue that will be lost under the Live Local law. While the law was sold as a solution to Florida's housing affordability crisis, apartment owners can claim tax rebates even if they don't offer particularly low rents. [ Times (2006) ]
Published Jan. 24|Updated Feb. 2

Pasco County commissioners have found a new reason to dislike the state’s Live Local law, which was passed last year to boost the amount of affordable housing in Florida with tax breaks and other incentives.

Not only can developers put apartments on land earmarked for industry and get a big property tax break, owners of existing apartment complexes can qualify as well. While the law was sold as a solution to Florida’s housing affordability crisis, apartment owners can claim tax rebates even if they don’t offer particularly low rents.

Already, the owners of two Pasco apartment complexes have applied for the tax breaks. State records show dozens more around the state are seeking to qualify for the program, which provides a windfall for corporate property owners who have done nothing to add to the affordable housing stock.

“They said they did all of this for a charitable purpose,” said David Goldstein, chief assistant county attorney, who told commissioners during a recent meeting that he finds that explanation insulting. “My legal opinion is that is not an act of charity.”

The two apartment complexes in Pasco County that have applied could qualify for a combined $86 million in tax savings through the life of the program, which runs through 2059.

Owners of the Tapestry Cypress Creek and The Gallery at Trinity Apartments have already built a combined 629 homes. Of that total, the owners are seeking tax breaks on a combined 266 apartments charging rents deemed affordable to households making no more than $70,000. Websites for both complexes describe them as luxury apartments, with Tapestry offering a clubhouse and saltwater pool and The Gallery featuring pickleball and an “elite” putting green.

The applications don’t include rental prices, but the Tapestry website lists rents starting at nearly $1,600 for a 731-square-foot apartment to a three-bedroom apartment of 1,322 square feet for about $2,200. The biggest bargains at the Gallery range from $1,560 for a 689-square-foot one-bedroom unit to $2,165 for about 1,200 square feet and three bedrooms.

“Pasco County disputes that the rents set forth in the applications are ‘affordable’ or for a ‘charitable purpose,’” said Sarah Andeara, public information officer for the county.

Representatives of Gallery manager Richman Property Services did not respond to a phone call and two emails seeking comment. Tapestry Cypress Creek managers did not respond to two phone calls seeking comment.

Dozens of apartment complex owners have applied the tax breaks for thousands of homes statewide, with clusters in Miami-Dade and Orange counties, according to applications submitted to the Florida Housing Association by Dec. 31. Hillsborough County has two, Altis Promenade in Lutz and the The Easton Riverview Apartments. Each of the applicants in Pasco and Hillsborough offer either one or two months rent free.

Under Live Local, a county must authorize proposed multifamily and mixed-use residential development in any area zoned commercial, industrial or mixed use under certain conditions. The primary requirement is that 40% of the residences be considered affordable for households making anywhere from a third to 120% of the median income for the area.

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Property owners would get a 75% annual property tax rebate on the assessed value of units serving occupants whose income is from roughly $50,000 to $70,000. They qualify for a 100% rebate on the units serving households making less than that range.

Pasco officials have said they would be having a different conversation if the law focused on those below the median income.

Almost all the applications so far statewide have come from apartment owners seeking the partial tax break for the higher income threshold.

Pasco commissioners turned up the level of alarm during a meeting Tuesday. A quick look at apartment numbers showed that in the last five years, Pasco has approved 36,000 apartment residences, County Administrator Mike Carballa said.

Another 26,000 are permitted but not yet built. Potentially any or all of those units might also qualify for tax rebates.

Goldstein told the commission that the loss in tax revenue from just the two existing apartment applicants “may just be the tip of the iceberg.”

Commissioner Jack Mariano said that if lobbying efforts don’t fix the problem, Pasco commissioners might have to go back to what they discussed recently as the “nuclear option,” which would be to declare a moratorium on apartment developments.

“They’re dragging us that way,” Mariano said.