Never let a good crisis go to waste: Tourism lobbyists pitch tax breaks for tourism as a solution to Florida's affordable housing woes
The Trade Show (2023 ed.), Vol. 1
Editor’s note: With the Florida Legislature gearing up for its 2023 session, Seeking Rents is bringing back “The Trade Show.” This is a weekly collection of shorter news nuggets and stories from other outlets around the state and country about the special interest-driven issues that lawmakers spend most of their time working on. These are issues that ultimately have enormous impact on everyday Floridians. But they don’t get nearly enough attention outside of Tallahassee, because politicians use culture wars to distract everyone’s attention. The name comes from something a mentor once told me before I covered my very first legislative session more than 20 years ago: “Ninety percent of what goes on up here is a trade show.”
In December 2019, as Universal Orlando was lobbying for $125 million in public money for a new road serving its “Epic Universe” theme park, the company promised to set aside 20 acres of land for affordable housing.
Three years later, that pledge has evolved into “Catchlight Crossings,” a proposed mixed-income housing development with 1,000 apartments, 16,000 square feet of retail space and a transit hub served by buses, ride-sharing apps and Universal employee shuttles.
And now, while Universal works on its housing project in Orlando, some tourism industry lobbyists are pitching a new idea in Tallahassee: Tax breaks for tourism companies that build housing.
The Florida Restaurant and Lodging Association is pushing the concept ahead of the Florida Legislature’s 2023 session, which begins in March.
“FRLA would also encourage the Legislature to consider creating incentives to encourage innovative approaches to affordable housing development,” the organization says in its 2023 legislative agenda. “For example: incentives for development of high-quality rental properties in key areas or incentives and tax credits for hoteliers and restaurateurs to create housing for their own staff.”
Robert Agrusa, the president and CEO of the Central Florida Hotel & Lodging Association, also promoted the idea while presenting his group’s session priorities to the Orange County legislative delegation during a public meeting last week.
“One thing I want to add to that is, is there ways that we can look at incentivizing industry leaders that if they want to build housing on their properties to be able to provide accommodations for their employees…that we can help support that through incentives, through legislative changes? Agrusa said.
Universal lobbyists serve on the board of directors for both the Florida Restaurant and Lodging Association and the Central Florida Hotel & Lodging Association.
Now, Universal isn’t the only big tourism company working on housing. Walt Disney World has plans to build more than 1,300 housing units on nearly 80 acres of its land, according to this April 2022 report by NPR.
And there’s no specific proposal just yet — at least not one that’s been made public. So it’s hard to truly evaluate the idea.
But giving tax breaks to hotel and restaurant companies that build housing seems like, at best, an inefficient and roundabout way to tackle Florida’s affordable housing crisis. Especially since big tourism companies — whose entire business model depends on having enough low-wage workers to cook food, sell souvenirs, pick up trash and clean hotel rooms — already have plenty of market incentive to help their workers find places to live.
And presumably Florida Gov. Ron DeSantis and the Legislature don’t want to pass tax breaks simply to reward big companies for things they are already doing — like Universal and Catchlight Crossings.
Back on the fast track
Someone in the Florida House of Representatives sure seems to like LeaseLock.
LeaseLock is a California-based “proptech” company that has been lobbying hard for legislation that would make it clear that apartment complexes and other landlords can charge their tenants perpetual, non-refundable monthly fees instead of refundable, upfront security deposits.
Records obtained last year by Jeff Schweers, now of the Orlando Sentinel, revealed that lobbyists for LeaseLock helped write the original version of the legislation in the months leading up to the 2022 session. House leadership then sped LeaseLock’s bill through the process, assigning it to just two committees — rather than making it go through the customary three committee hearings — and passing it out of the full chamber despite intense opposition from critics who likened it to a predatory, payday-lending-type of product designed to extract more money from the poor.
The Florida Senate blocked the bill last year. But it’s been filed again ahead of the 2023 legislative session (HB 133). And House leadership has once again referred it to just two committees.
LeaseLock isn’t the only company behind the bill. A similar “security deposit alternative” company — New York-based Rhino — has also helped shaped the legislation (while engaging in some suspect public-relations schemes, too.) And lobbyists for a third competitor, publicly traded insurance giant Assurant, have been circling the legislation, as well.
But LeaseLock seems to be leading the charge — and it has some potentially powerful allies in Florida.
For instance, one of the company’s key investors is a venture-capital firm affiliated with American Family Insurance, which has been a notable campaign contributor in Florida in recent years. LeaseLock’s clients include apartment developers and property managers with big holdings in Florida, including Greystar Real Estate Partners and Cushman & Wakefield, as well as the apartment division of Miami-based homebuilding giant Lennar Corp. And LeaseLock has worked closely with the Florida Apartment Association, the state’s main landlord-lobbying group.
So expect this bill to fly again this session — at least through the Florida House.
An unnecessary crisis is coming
The Tampa Bay Times reports that more than 1 million Floridians could lose their health insurance over the next few months, as state officials begin culling the state’s Medicaid rolls now that pandemic support from the federal government is coming to an end.
State officials expect to scrutinize the eligibility of nearly 5 million of the roughly 5.6 million Floridians who are currently covered by Medicaid. (That’s right: Roughly a quarter of the state’s population is covered by Medicaid.) Some of those who lose their coverage will be eligible for other state-run insurance safety nets. But many more will not.
Of course, this is a crisis that doesn’t have to happen. But Florida is one of the 11 states around the country that still refuse to expand Medicaid coverage under the 13-year-old Affordable Care Act.
Read: Medicaid coverage to end in April for nearly 1 million in Florida (Tampa Bay Times)
A story about priorities, in two maps
Orange on the left: The states that have refused to close tax loopholes exploited by the world’s largest corporations (by adopting a policy known as “combined reporting”).
Orange on the left: The states that have refused to expand Medicaid health-insurance coverage to more low-income Americans.
How a billionaire family uses trusts to avoid taxes
We had a story last week about a pair of bills approved by Gov. Ron DeSantis and the Florida Legislature that made it easier for billionaires to hide their family fortunes from public scrutiny and federal taxes. Both bills passed after a pair of billionaire Walmart heirs made campaign contributions to the governor and key lawmakers working on the legislation.
The most controversial of the two bills ripped a new hole in Florida’s open-government laws, by permanently sealing future court proceedings involving a family trust company — a type of financial entity used by dynastic families to continue passing their riches from one generation to the next without paying estate or inheritance taxes.
Well, this week served up a vivid example of why billionaire families might want to keep their court proceedings closed, when the New Yorker magazine dove deep inside a dispute between some of the superrich heirs to the late oil tycoon J. Paul Getty and one of their former wealth managers.
The litigation has revealed secrets about how members of the Getty family have used lax trust laws in Nevada to avoid taxes in California — allowing them to build their vast fortune much faster than ordinary Americans can accumulate wealth. It’s a fascinating, and important read.
Read: The Getty Family Trust Issues (The New Yorker)
And how states help a billionaire family use trusts to avoid taxes
Once you’ve finished that New Yorker story, be sure to check out a follow-up piece from The American Prospect, which examines in more detail how the Getty family’s tax-avoidance has been enabled by a race-to-the-bottom between states — including Florida — to see who can provide the flimsiest rules for private family trusts.
Read: How Nevada Picks Millions From California’s Pocket (The American Prospect)
A different look at DeSantis
Lots of people are writing Ron DeSantis profiles these days, but Andrew Cockburn, the Washington editor at Harper’s, took a unique approach this week by focusing primarily on all that DeSantis has done as governor for the state’s most powerful corporate interests — from cutting corporate taxes to helping power companies raise prices to shielding Big Sugar from lawsuits. (I’m admittedly biased about this story, since I’m quoted in it.)
Read: Swamplandia: The money behind Ron DeSantis’s populist façade (Harper’s Magazine)
Restaurant workers are paying to lobby against their own interests
Meanwhile, the New York Times uncovered another obscure corporate favor that states around the country — including Florida — have quietly granted: State-mandated food-safety training programs that double as a political fundraising operation for the restaurant lobby.
Read: How Restaurant Workers Help Pay for Lobbying to Keep Their Wages Low (The New York Times)
Some states want to tax wealth
Finally, the Washington Post reports that a coalition of legislators in statehouses around the country are simultaneously introducing bills to raise taxes on the richest Americans. Some are focusing on state-level versions of the “wealth tax” proposed by U.S. Sen. Elzabeth Warren (D-Mass.), while others targeting capital gains and estate taxes.
This is happening in seven states, according to the Post — although you will no doubt be shocked to learn that Florida is not among them. But it could be! Florida’s constitution specifically allows the state to tax estates and inheritances, as well as stock and investment holdings.
In fact, Florida used to do both. But the state’s Republican-controlled Legislature allowed the estate tax to die following changes to federal law, and they proactively killed off the “intangibles tax” on stocks and bonds.
To give you an idea of who this helped: At the time it was repealed, Florida’s intangibles tax was only charged on people who owned more than $250,000 in taxable investments or married couples who owned more than $500,000.
Read: Billionaires in blue states face coordinated wealth-tax bills (The Washington Post)
Would you please name the "plenty of incentivies" that the large Orlando companies have to help their employees seeking affordable housing?
Thanks.
Frank Clifford, Esq.