Florida’s Economy and Real Estate Policy Issues John Tuccillo Florida Realtors

Population Growth

Produced by Florida REALTORS® with data provided by the U.S. Bureau of the Census

Population Growth Employment Growth

Florida Employment Year-Over-Year Change

Population Growth Employment Growth Financial Market Performance  Primarily for areas with a sizeable retiree population or luxury market

Population Growth Employment Growth Financial Market Performance New Construction

Produced by Florida REALTORS® with data provided by the U.S. Bureau of the Census

Population Growth Employment Growth Financial Market Performance New Construction Investor Participation in the Market

Produced by Florida REALTORS® with data provided by Florida’s multiple listing services

Population Growth Employment Growth Financial Market Performance New Construction Investor Participation in the Market Mortgage Rates and Availability

Population Growth Employment Growth Financial Market Performance New Construction Investor Participation in the Market Mortgage Rates and Availability Inflation Rates

Inflation will pick up at some point but not in the immediate future Currently held down by low oil prices No real threat of deflation

Water Quality and Real Estate Values

Model: Control Characteristics Structural characteristics  physical features of the property itself Sale characteristics  circumstances of the home’s sale Neighborhood characteristics  demographics of residents of the area immediately surrounding the home Jurisdictional characteristics  impact of local government services and public schools Regional characteristics  “macro” housing market conditions at a regional/state level Flood risk characteristics  risk posed to home by flooding Water proximity  location of the home with respect to various water bodies Time fixed effects  control for seasonal and annual effects in the housing market

Lee Co.: Price impact of a one-foot change in water clarity (1-mo. avg). Location of Single Family HomeChg. in ClarityChg. in Value Caloosahatchee Estuary - waterfront + 1 foot+ 2.47% 1/8 mile from waterfront+ 1 foot+ 1.93% 1/4 mile from waterfront+ 1 foot+ 1.50% 1/2 mile from waterfront+ 1 foot+ 0.91% 1 mile from waterfront+ 1 foot+ 0.34% 2 miles from waterfront+ 1 foot % 4 miles from waterfront+ 1 foot %

Martin Co.: Price impact of a one-foot change in water clarity (1-mo. avg). Location of Single Family HomeChg. in ClarityChg. in Value St. Lucie & Loxahatchee estuaries, & Indian River Lagoon – waterfront + 1 foot+ 5.41% 1/8 mile from waterfront+ 1 foot+ 4.21% 1/4 mile from waterfront+ 1 foot+ 3.28% 1/2 mile from waterfront+ 1 foot+ 1.99% 1 mile from waterfront+ 1 foot+ 0.73% 2 miles from waterfront+ 1 foot+ 0.10% 4 miles from waterfront+ 1 foot %

Commercial Lease Tax and Corporate Income Tax

What is the issue? Florida levies both a corporate income tax and a tax on commercial rents Florida Realtors had advocated for a phase out of the commercial rents tax (Senate Bill 116) The Governor would rather cut the corporate tax by raising the exemption (Senate Bill 76) He won’t do both

Tax Facts Only six states have a rate below Florida’s Corporate Income Tax applies only to C Corporations 93 percent of those who file pay no taxes Maximum savings from the proposed increased exemption is $1,375 All businesses that rent commercial space pay taxes on those rents

Tax Watch Analysis Corporate Tax Rents Tax Employment 3, , Labor Income $170 m $210 m Value Added $293 m $368 m Output $513 m $640 m