STORAGE NAME: h0365.HAT DATE: 3/14/2025 1 FLORIDA HOUSE OF REPRESENTATIVES BILL ANALYSIS This bill analysis was prepared by nonpartisan committee staff and does not constitute an official statement of legislative intent. BILL #: HB 365 TITLE: Rent of Affordable Housing Dwelling Units SPONSOR(S): Tendrich COMPANION BILL: SB 382 (Bernard) LINKED BILLS: None RELATED BILLS: None Committee References Housing, Agriculture & Tourism Civil Justice & Claims Commerce SUMMARY Effect of the Bill: The bill prohibits a landlord from increasing the rent of a unit during the term of a rental agreement if: The unit qualifies as affordable housing; and The landlord has received federal, state, or local funding or tax incentives because of the unit’s status as affordable housing. However, the bill does not prohibit such landlords from increasing the rent when the tenant is renewing the rental agreement. Fiscal or Economic Impact: The bill has an indeterminate impact on the private sector. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY ANALYSIS EFFECT OF THE BILL: Prohibition on Rent Increases The bill amends the Florida Residential Landlord and Tenant Act. Under the bill, a landlord of a dwelling unit that qualifies as affordable housing, and who has received federal, state, or local funding or tax incentives because of the unit’s status as affordable housing, may not increase the rent of such unit during the term of a rental agreement. In effect, the bill protects tenants who live in affordable housing units, and whose landlords receive funding or incentives because of the unit’s status as affordable housing, from any increases, whether anticipated or not, in the amount to pay for rent during the term of a rental agreement. Scope of the Prohibition The bill expressly provides that the prohibition on rent increases does not apply when the tenant is renewing his or her rental agreement. This means the landlord could only increase the rent for an affordable housing unit when the rental agreement is up for renewal. At that point, the landlord and tenant could enter into negotiations for any increase in rent. The effective date of the bill is July 1, 2025. FISCAL OR ECONOMIC IMPACT: PRIVATE SECTOR: The bill has an indeterminate positive impact on the private sector. The bill eliminates the ability of a landlord that rents out an affordable housing unit, and who receives public assistance for the unit’s status as affordable, to JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY 2 increase the rent for such unit during the term of a rental agreement. Tenants who rent such units would be shielded from any increases in the amount to pay for rent during the term of a rental agreement. RELEVANT INFORMATION SUBJECT OVERVIEW: Florida’s Residential Landlord and Tenant Act The Residential Landlord and Tenant Act 1 (Act) governs the rental of dwelling units and the relationship between landlords 2 and tenants 3 in Florida. 4 Significant provisions in the Act include those relating to unconscionable rental agreements and provisions, 5 the duration of the rental agreement and the tenancy, 6 prohibited provisions in rental agreements, 7 maintenance obligations of landlords and tenants, 8 a landlord’s access to a dwelling unit, 9 terminations of tenancies and rental agreements, 10 and actions for damages. 11 The Act defines “dwelling unit” as: A structure or part of a structure that is rented for use as a home, residence, or sleeping place by one person or by two or more persons who maintain a common household; A mobile home rented by a tenant; or A structure or part of a structure that is furnished, with or without rent, as an incident of employment for use as a home, residence, or sleeping place by one or more persons. 12 Rent Regulation Policies Rent regulation policies can protect tenants from dramatic, unforeseen increases in housing costs. 13 Jurisdictions adopt rent regulations for several reasons, one of which is ensuring stability for tenants in rent-stabilized 14 units and promoting the overall affordability of rental housing. 15 The goals of rent regulation policies, however, can be met with other concerns. 16 Maintaining the affordability of existing housing might discourage new housing construction. 17 Meanwhile, protections for current tenants might make it harder for future tenants or those living in unregulated units to remain in and afford housing. 18 With only a few exceptions, local governments in Florida are prohibited from imposing price controls upon a lawful business activity that is not franchised by, owned by, or under contract with, an agency of the local government. 19 1 The Florida Residential Landlord and Tenant Act (Act) is codified in ch. 83, part II, F.S. Nonresidential tenancies and all tenancies not otherwise governed by the Act are governed by pt. I of ch. 83, F.S. See s. 83.001, F.S. 2 “Landlord” means the owner or lessor of a dwelling unit. S. 83.43(9), F.S. 3 “Tenant” means any person entitled to occupy a dwelling unit under a rental agreement. S. 83.43(17), F.S. 4 S. 83.41, F.S. 5 See s. 83.45, F.S. 6 See s. 83.46, F.S. 7 See s. 83.47, F.S. 8 Landlords have an obligation to maintain the premises, whereas tenants have an obligation to maintain the dwelling unit. See ss. 83.51, F.S. and 83.52, F.S. 9 See s. 83.53, F.S. 10 For terminations of rental agreements, see s. 83.56, F.S. For terminations of tenancies without a specific term, see s. 83.57, F.S. For termination of tenancies with a specific duration, see s. 83.575, F.S. 11 See s. 83.55, F.S. 12 S. 83.43(5), F.S. 13 Local Housing Solutions, Rent Regulation, Mar. 2021, https://localhousingsolutions.org/housing-policy-library/rent- regulation/ (last visited Mar. 2, 2025). 14 Id. 15 Id. 16 Id. 17 Id. 18 Id. 19 S. 166.043(1)(a), F.S. See also Hemlane, Florida Rent Control Laws, Mar. 2024, https://www.hemlane.com/resources/florida- rent-control-laws/ (last visited Mar. 2, 2025). JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY 3 Any local government ordinance or rule that has the effect of imposing such price controls is preempted by the state. Currently, Florida law does not impose any statewide limits on how much a landlord can raise the rent for a dwelling unit, provided the landlord: Does not increase the rent for discriminatory reasons; and 20 Provides the tenant proper notice under any applicable local regulations. 21 Affordable Housing Housing is considered affordable when monthly rents or monthly mortgage payments, including taxes, insurance, and utilities, do not exceed 30 percent of a family’s gross income. 22 Over 2.4 million low-income Florida households pay more than 30% of their incomes towards housing, which is the maximum amount considered affordable by experts. 23 Over half of these households, or 1.3 million low-income households, spend more than 50% of their income towards housing costs. 24 This makes it difficult for those households to save for retirement or emergencies and difficult to afford other necessities such as food and childcare. 25 Eligibility to participate in Florida’s state and federally-funded housing programs is determined by area median income (AMI) or statewide median family income, which is published annually by the United States Department of Housing and Urban Development (HUD). 26 In Florida, the current statewide AMI for a family of four is $88,600 (as family size changes, the income range also varies): 27 Extremely-low-income – earning up to 30 percent AMI (at or below $26,600); 28 Very-low-income – earning from 30.01 to 50 percent AMI ($26,601 to $44,300); 29 Low-income – earning from 50.01 to 80 percent AMI ($44,301 to $70,900); 30 and Moderate-income – earning from 80.01 to 120 percent of AMI ($70,901 to $106,320). 31 As of 2024, Florida had only 24 affordable and available rental units for every 100 extremely low-income renters. 32 In addition, there were little to no communities in Florida that could provide enough housing to support this group of renters, which is primarily made up of low-income workers, retirees, and people with disabilities. 33 20 See s. 83.64(1), F.S. It is unlawful under Florida law for a landlord to discriminatorily increase a tenant’s rent primarily because the landlord is retaliating against the tenant. 21 See, e.g., Miami-Dade County, Fla., Code of Ordinances, Sec. 17-03 (2024). Under the ordinance, a residential landlord that proposes to increase the rental rate by more than five percent at the end of a lease for a specific term, or during a tenancy without a specific duration in which the rent is payable on a monthly basis, must provide a minimum of 60 days’ written fair notice to the tenant before the tenant must either: (1) accept the proposed amendment; (2) reach an acceptable compromise; or (3) reject the proposed amendment to their tenancy. If the required 60 days’ written fair notice has been provided and the tenant has not agreed to the proposed amendment or an acceptable compromise, the landlord may impose the proposed amended terms or require the tenant to vacate, in accordance with applicable Florida law and other Miami-Dade County ordinances. 22 S. 420.0004(3), F.S. 23 Florida Housing Coalition, 2024 Home Matters Report, p. 2. https://flhousing.org/wp-content/uploads/2024/08/FHC-2024- Home-Matters-Report.pdf (last visited Feb. 24, 2025). 24 Id. 25 Id. 26 See U.S. Dept. of Housing and Urban Development: Office of Policy Development and Research, Income Limits, https://www.huduser.gov/portal/datasets/il.html#documents_2024 (last visited Mar. 2, 2025). 27 U.S. Dept. of Housing and Urban Development: Office of Policy Development and Research, FY 2024 State Income Limits: Florida, https://www.huduser.gov/portal/datasets/il/il2024/2024summary.odn?inputname=STTLT*1299999999%2BFlorida&select ion_type=county&stname=Florida&statefp=12.0&year=2024 (last visited Mar. 2, 2025). 28 Id. See also s. 420.0004(9), F.S. 29 Supra note 26. See also s. 420.0004(17), F.S. 30 Supra note 26. See also s. 420.0004(11), F.S. 31 Supra note 26. See also s. 420.0004(12), F.S. 32 Florida Housing Coalition, 2024 Home Matters Report, p. 2. https://flhousing.org/wp-content/uploads/2024/08/FHC-2024- Home-Matters-Report.pdf (last visited Feb. 24, 2025). 33 Id. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY 4 Public Assistance for Affordable Housing Rentals The Section 8 housing choice voucher (HCV) program is the federal government’s primary program for assisting very low-income families, the elderly, and persons with disabilities in affording decent, safe, and sanitary housing in the private market. 34 HVCs are administered locally by public housing agencies (PHAs) that receive federal funds from HUD. 35 First, HUD provides the funds to allow PHAs to make housing assistance payments on behalf of the HCV tenant. 36 HUD also pays the PHA a fee for the costs of administering the program. HUD monitors PHA administration of the program to ensure program rules are properly followed. 37 Then, the PHA administers the HCV program locally and provides the HCV tenant with the housing assistance. 38 The PHA must examine the tenant’s income and household composition, and ensure that their housing unit meets minimum housing quality standards. 39 The PHA then enters into a contract with the landlord to provide housing assistance payments to the landlord on behalf of the family. 40 Another federal program that indirectly provides support for landlords who provide affordable housing rental units include the U.S. Department of the Treasury’s Emergency Rental Assistance (ERA) program, which has collectively provided communities over $46 billion to support housing stability for eligible renters throughout the COVID-19 pandemic. 41 Florida Housing Finance Corporation In addition to public assistance for landlords who rent out affordable housing units, the Florida Housing Finance Corporation (Corporation) administers federal and state resources that assist developers in financing the development of safe, decent affordable housing. Created in 1997 as a public-private entity, 42 the Corporation is held by the state and housed within the Department of Commerce. 43 The following programs are administered by the Corporation: State Apartment Incentive Loan Program: This program provides developers with low-interest loans as gap financing to leverage mortgage revenue bonds or Low-Income Housing Tax Credit resources needed to construct or rehabilitate affordable rental units. Multifamily Mortgage Revenue Bonds: This program uses both taxable and tax-exempt bonds to provide below market rate loans to nonprofit and for-profit developers who set aside a certain percentage of their apartment units for low-income families. HOME Investment Partnerships Program: This program provides non-amortizing, low-interest rate loans to developers of affordable rental housing, particularly in more rural areas of the state. Low Income Housing Tax Credits: This program provides for-profit and nonprofit organizations with a dollar-for-dollar reduction in federal tax liability in exchange for the acquisition, substantial rehabilitation, or new construction of low- and very-low-income rental housing units. 34 U.S. Dept. of Housing and Urban Development, Housing Choice Voucher Fact Sheet for Landlords, May 2021, https://files.hudexchange.info/resources/documents/PIH-HCV-Landlord-Fact-Sheet.pdf (last visited Mar. 2, 2025). 35 Id. 36 Id. 37 Id. 38 Id. 39 Id. 40 Id. 41 U.S. Dept. of the Treasury, Emergency Rental Assistance Program, https://home.treasury.gov/policy- issues/coronavirus/assistance-for-state-local-and-tribal-governments/emergency-rental-assistance-program (last visited Mar. 2, 2025). 42 See ch. 97-167, Laws of Fla. 43 S. 420.504(1), F.S. JUMP TO SUMMARY ANALYSIS RELEVANT INFORMATION BILL HISTORY 5 Special Needs Housing: This program enhances the ability of extremely low-income households with special needs to access and retain affordable rental housing in their communities by offering incentives to developers who set aside a portion of their housing units for special needs households. 44 RECENT LEGISLATION: YEAR BILL # HOUSE SPONSOR(S) SENATE SPONSOR OTHER INFORMATION 2024 HB 31 Edmonds Osgood Among other things, the bill limited rent increases of certain residential tenancies to specified amount. Neither the House version nor the Senate version made it to a committee stop. 2023 HB 1261 Gantt Jones Among other things, the bill prohibited certain landlords from increasing rent in excess of certain percentage. Neither the House version nor the Senate version made it to a committee stop. BILL HISTORY COMMITTEE REFERENCE ACTION DATE STAFF DIRECTOR/ POLICY CHIEF ANALYSIS PREPARED BY Housing, Agriculture & Tourism Subcommittee Curtin Fletcher Civil Justice & Claims Subcommittee Commerce Committee 44 Florida Department of Commerce, Affordable Housing Planning, https://floridajobs.org/community-planning-and- development/programs/community-planning-table-of-contents/affordable-housing- planning#:~:text=Low%20Income%20Housing%20Tax%20Credits%20%2D%20The,and%20very%20low%20income%20r ental%20housing%20units (last visited Mar. 2, 2025).