A little provision in a big bill could lead to the loss of affordable apartments across Florida

A recap of the third week of the Florida Legislature's 2025 session, plus a preview of week four.

Photo credit: Roger Hamelin

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Florida lawmakers are expected to begin work this week on another package of new and expanded tax breaks that could — at least in theory — support the construction of more affordable housing around the state.

But tucked inside the roughly 50-page piece of legislation is a provision that would likely lead to a loss of affordable apartments.

The provision involves something known as the “qualified contract” process, which is a tool that developers of publicly subsidized affordable housing can use to convert properties into market-rate apartments and condos.

It’s a part of the federal Low-Income Tax Credit Program, which provides tax breaks to developers in exchange for a commitment to keep rents affordable for low-income tenants for at least 30 years. States, which administer the program and provide additional incentives, can demand even longer affordability periods; Florida, for instance, sometimes requires up to 50 years.

But there’s an escape hatch. When a housing project built with federal and state tax subsidies is approaching its 15^th year, the owner — usually still the original developer — can inform the state that it wants to sell the property. That triggers the qualified contract process.

Basically, state housing officials then have one year to find someone willing to buy the property at a predetermined price set by a formula in federal law, and to present that offer to the owner of the property as a “qualified contract.”

If that happens, the owner can either accept the offer or keep the property. But either way, the apartments remains bound by affordable-rent requirements for the remaining 15 to 35 years of the original tax-credit agreement.

But if the state can’t find a buyer willing to offer a qualified contract, the owner can ditch the rent restrictions and convert the development into higher-priced market-rate apartments or auction off the units as condos.

This whole qualified contract process was created in 1989, when the federal housing program was still new and there were worries that investors would be wary of putting up money to finance developments that would be bound by rent restrictions for three decades or more.

The problem is that the formula that determines the asking prices is old and out-of-date. It often results in prices today that are far higher than what any buyer wants to buy for a rent-controlled housing development. And that has turned the qualified contract process into an easy get-out-of-jail free card for affordable housing developers who have already banked the benefits of their tax breaks.

Robert Rozen, a former staff attorney in the U.S. Senate who helped create the original federal housing program, says the qualified contract process has become a gaping loophole that leads to the loss of 10,000 affordable apartments every year across the country.

The problem hasn’t been quite so severe in Florida, because real-estate prices have risen so rapidly that housing officials usually have more luck finding buyers willing to pay the qualified contract price.

But qualified contracts erupted as a Florida issue in 2022, when a pair of politically influential affordable housing developers — with an assist from Gov. Ron DeSantis — lobbied for changes to make it more difficult for Florida housing officials to find qualified contracts when a developer triggers the process.

An early version of their legislation would have essentially given developers themselves control over whether they ever receive an offer of a qualified contract. That, of course, posed an obvious problem, since developers don't actually want an offer — they want to get out of the affordability restrictions so they can rent units at higher rates.

They didn’t get that. But Florida lawmakers passed, and DeSantis signed, Senate Bill 196, which put several new conditions on what must happen before housing officials can deem an offer to buy a property a qualified contract. One change, for instance, required a potential buyer to make two non-refundable purchase deposits in order for it to be considered a qualified contract.

That may have gone too far.

Because the very next year, lawmakers loosened the rules to require only an initial deposit before an offer to buy can be considered a qualified contract. That change was part of the 2023 “Live Local Act,” a sweeping set of housing grants, tax breaks and other changes championed by former Senate President Kathleen Passidomo (R-Naples.)

And that brings us back to today, where two new bills — House Bill 923 and Senate Bill 1594 — would essentially undo the change made by the Live Local Act, and once again require buyers to put up two deposits for the offer to count as a qualified contract. The Senate bill is up for its first hearing Tuesday in the Senate Community Affairs Committee.

Emails obtained in a public records request show that Atlantic Housing Partners — an Orlando-area affordable housing developer and one of the companies behind Senate Bill 196 in 2022 — is pushing the provision.

Lobbyists for the developers say the qualified contract process needs to be tightened up because it can be abused by rival real-estate developers who will make a qualified contract offer on one property — an offer they have no real intention of following through with — to gain leverage in an unrelated real-estate negotiation.

Affiliates of Atlantic Housing, for instance, once sued the Florida Housing Finance Corp. for allowing a qualified contract that, the companies said, was riddled with errors like misspelled words and missing legal descriptions and submitted by buyers who “seemed more interested in obtaining better below-market prices for other developments.” The suit eventually settled.

Making buyers put up a second deposit, the developers say, would force them to risk more money. And that would deter bad-faith bids.

That may be true. But it’s also true that any change making it more difficult to offer a qualified contract to a developer also makes it easier for that developer to ditch the affordability rules they agreed to in exchange for a bunch of tax breaks.

And this is a risky area to get wrong in Florida, a state with extreme affordable housing shortages all across the state.

During the 2022 debate around Senate Bill 196, data from state housing officials showed that there were more than 260 affordable housing developments in Florida — with nearly 40,000 apartments between them — that had looming qualified contract triggers.

Billtrack

In honor of the best show on TV, here’s a look at some of the bills on the move from the past week of session:

• Senate Bill 56: Bans chemtrails. Passed the Senate Agriculture, Environment and General Government Appropriations Committee by a 10-2 vote. (See votes)

• Senate Bill 118: Exempts Donald Trump’s future presidential library from any local development oversight wherever it gets built, which will probably be in Palm Beach County. Passed the Senate by a 36-3 vote. (See votes)

• Senate Bill 196: Mandates drug-labeling requirements for food that contains vaccines. Passed the Senate Regulated Industries Committee by an 8-0 vote. (See votes)

• House Bill 503: Forces cities and counties to cut taxes for businesses. Passed the House Intergovernmental Affairs Subcommittee by a 12-4 vote. (See votes)

• House Bill 549: Requires state agencies to update maps and school districts to ensure all future textbooks use “Gulf of America” instead of Gulf of Mexico. Passed the House State Affairs Committee by a 18-7 vote. (See votes)

• House Bill 575: Replaces Gulf of Mexico with “Gulf of America” everywhere it appears in state law. Passed the House State Affairs Committee by a 16-7 vote. (See votes)

• House Bill 577: Allows cities and counties to let towing companies charge up to three times as much to tow and store electric vehicles as they charge for gas vehicles. Passed the House Intergovernmental Affairs Subcommittee by an 18-0 vote. (See votes)

• House Bil 651: Prohibits cities and counties from adding fluoride to their water supplies and imposes anticompetitive labeling restrictions on plant-based meat, milk and egg products. Passed the House Housing, Agriculture & Tourism Subcommittee by a 14-3 vote. (See votes)

• House Bill 665: Eliminates community programs that make real-estate developers contribute to public art. Passed the House Housing, Agriculture & Tourism Subcommittee by a 16-1 vote. (See votes)

• Senate Bill 922 and House 1219: Gives businesses more power to bind workers to non-compete agreements. SB 922 passed the Senate Commerce and Tourism Committee by a 6-3 vote. (See votes) HB 1219 passed the House Industries & Professional Activities Subcommittee by an 11-5 vote. (See votes)

• House Bill 999: Recognizes gold and silver as legal tender and allows government agencies to accept payments in gold and silver. Passed the House Insurance & Banking Subcommittee by a 16-0 vote. (See votes)

• Senate Bill 1118: Makes it easier for homebuilders to build subdivisions on farmland, abolishes new protections for rural land around Orlando, and authorizes an ethanol plant north of Jacksonville. Passed the Senate Community Affairs Committee by a 5-3 vote. (See votes)

• House Bill 1157: Gives businesses and the state more ways to deny unemployment benefits to laid-off workers. Passed the House Housing, Agriculture & Tourism Subcommittee by a 13-4 vote. (See votes)

• House Bill 1173: Strips the attorney general of Delaware of standing to sue the Alfred I. duPont Charitable Trust in disputes over whether the trust is inappropriately diverting funding for children’s services in Delaware. Passed the House Civil Justice & Claims Subcommittee by a 14-2 vote. (See votes)

• House Bill 1255: Compels school districts to show sixth-graders computer-generated videos of fetuses like “Baby Olivia,” a video produced by an anti-abortion activist group. Passed the House Student Academic Success Subcommittee by a 15-2 vote. (See votes)

• Senate Bill 1418: Exempts “heated tobacco products” like Philip Morris’ IQOS from cigarette and tobacco taxes. Passed the Senate Regulated Industries Committee by an 8-0 vote. (See votes)

• House Bill 1517: Allows someone to file a civil lawsuit on behalf of an embryo or fetus. Passed the House Civil Justice & Claims Subcommittee by a 13-3 vote. (See votes)

• Senate Bill 1776: Weakens whistleblower protections for private-sector workers against retaliation by their employer. Passed the Senate Commerce and Tourism Committee by a 6-3 vote. (See votes)

• Senate Bill 1822: Prohibits local communities from banning or restricting the use of certain kinds of bags or food containers, like plastic bags, bottles and cups. Passed the Senate Environment and Natural Resources Subcommittee by a 5-3 vote. (See votes)

Looking ahead

Monday

• The Senate Criminal and Civil Justice Appropriations Committee will hear Senate Bill 806, the Senate version of the bill that would strip the Delaware attorney general of standing to sue the Alfred I. duPont Charitable trust. The meeting begins at 4 pm. (Contact committee members)

Tuesday

• The Senate Commerce and Tourism Committee will hear Senate Bill 918, which would roll back state child-labor laws. The meeting beings at 8:30 am. (Contact committee members)

• The House Careers & Workforce Subcommittee will hear House Bill 541, which would allow businesses to pay some workers less than the minimum wage. The meeting begins at 9 am. (Contact committee members)

• The Senate Environment and Natural Resources Committee will hear Senate Bill 832, which would give the Mosaic Co. protection from lawsuits related to radiation exposure on previously mined lands. The meeting begins at 11 am. (Contact committee members)

• The House Government Operations Subcommittee will hear House Bill 1387, which would impose more obstacles for public workers who want to organize and maintain labor unions. The meeting begins at 12 pm. (Contact committee members)

• The Senate Governmental Oversight and Accountability Committee will hear Senate Bill 676, the Senate version of the bill that would let businesses pay a subminimum wage. The meeting begins at 1:30 pm. (Contact committee members)

• The Senate Governmental Oversight and Accountability Committee will also hear Senate Bill 1328, another bill that would make it much more difficult for public workers to unionize. (Contact Committee members)

• The Senate Transportation Committee will also Senate Bill 1820, which would help Florida car dealer stop Scout Motors, an electric vehicle startup, from selling its vehicles directly to consumers. The meeting begins at 4 pm (Contact committee members)

Wednesday

• The Senate Agriculture, Environment and General Government Appropriations Committee will hear Senate Bill 700, the Senate version of the bill that would make communities stop adding fluoride to their water supplies and impose anti-competitive labeling requirements on plant-based food products. The meeting begins at 3:30 pm. (Contact committee members)

Note: The House notices committee meetings two days ahead of time, while the Senate notices them three days in advance. Click here to find the complete daily calendars in the Florida House of Representatives, and click here for the daily calendars for the Florida Senate.

Reading list

• Florida’s top gambling regulator became a FanDuel lobbyist. A bill would bar a repeat (Miami Herald) ($)

• Broward’s two hospital districts lobby for bill that would give them sweeping new business powers (Florida Bulldog)

• New College of Florida could take over USF Sarasota-Manatee, senator says (Tampa Bay Times) ($)

• Running The Ringling costs millions, employs hundreds. Can New College handle it? (Suncoast Searchlight)

• This land swap would give 700 acres of North Florida state forest to peanut farm (Tampa Bay Times) ($)

• Records about failed insurers would become public under Florida bill (Tampa Bay Times) ($)

• Is Big Sugar Trying to Put a Railroad and a Rock Mine in the Everglades Agricultural Area? (MediaLab@FAU)

• Florida legislators want to pave every rural spot left in the state | Commentary (Florida Phoenix)

• Did Florida Poly waive minimum qualifications for Kelli Stargel's $220K pretend job? (Public Enemy Number 1)