25 Oct AMENDMENTS ON FLORIDA’S MID-TERM ELECTION WILL EFFECT MIAMI REAL ESTATE MARKET
October 25th, 2018 — With such political turmoil going on in our country today, a record number of people are expected to cast their vote in the upcoming mid-term elections on November 6th. In addition to countless county issues and elected positions, there are 12 amendments to the Florida constitution on the ballot. With issues that run the gamut from dog racing to vaping in the workplace, there are several poised to make a significant impact on Miami’s real estate market. These amendments affect homeowners, investors, renters and the community as a whole.
Though there is a #13 amendment, there are actually only 12 to vote on because Amendment 8 was removed. The state Supreme Court struck down this amendment because it was deemed misleading to voters. If Amendment 8 had passed, it would have taken control of charter schools from local districts and given it to the state. There is similar debate over several of the other amendments due to the practice of “bundling” seemingly unrelated issues into one amendment. This is done in effort to shorten the ballot and prevent voters from fatigue and giving up half-way through the voting process.
Some amendments, such as A1, A2 & A5 are tax-based, while others like A3, A9 & A11 are community issues – all of which will affect the real estate market. Below is our assessment of these amendments and why we feel they should be passed or rejected.
Amendment 1 – No
This amendment raises the homestead property tax exemption by $25,000 for primary residence homes valued at more than $100,000. Currently, there are two other homestead exemptions: for the first $25,000 of the assessed property value and for the value between $50,000 and $75,000.
While on the surface this seems to lower taxes, in essence, it’s only a shift of taxes. According to Ballotpedia, this exemption would affect about 60% of homeowners in the state, giving them about $250 relief on their property taxes. These funds will eventually need to be made up, thus increasing other taxes or reducing services. This amendment would also affect small businesses – a business’s taxable value grows faster than that of a home. That means business owners will shoulder a larger share of the tax burden.
Amendment 2 – Yes
Amendment 2 permanently places a 10% cap on the annual increase of non-homestead property tax assessments. This amendment wouldn’t change current law, but it puts protections in place so excessive increases don’t impact investors, renters, business owners and consumers.
This amendment will have a substantial effect on property investors and vacation home owners. Owners of non-homestead properties would be paying taxes on the full assessed value, beginning in January 2019. Of course, tax increases on investors would have a ripple effect and a negative impact on property values. This would translate into higher costs for renters, financial burdens for those on fixed incomes, increased costs for consumers who shop at businesses and increased taxes for those who own undeveloped land. If this amendment were to fail, projections show a potential property tax increase of about $700 million each year.
Amendment 3 – Yes
This amendment is one that doesn’t have direct financial impact, but it does affect our communities. The Seminole Tribe of Florida and Disney would like this amendment to pass because it would require statewide voter approval to add any casino gambling. Disney and the Seminoles, who own the Hard Rock franchise, are worried that additional casinos will take visitors away from their attractions. More casinos are not necessarily a positive for the community, but the decision should be left to the voters, not the heavily lobbied Florida legislature.
Amendment 5 – No
This amendment would require a two-thirds vote in the Florida House and Senate to raise taxes — as opposed to a simple majority. If Amendment 5 were to pass, it would allow the minority to kill a proposal, awarding a few lawmakers power over the entire 160-member legislature. If we face another economic downturn and need to reverse some of the tax cuts enacted during the recovery, this measure would make it almost impossible.
Amendment 9 – Yes
This is a Florida Constitution Revision Commission proposal that bundles two measures under the auspices of clean water and clean air.
The waters most immediately adjacent to Florida’s coastline are in state control; the areas further offshore fall under federal jurisdiction. This amendment pertains just to state-controlled waters, prohibiting oil and gas drilling for exploration or extraction. Amendment 9 does not block the transportation of oil or gas from federal territorial waters through state waters to Florida’s ports, only the drilling. With all the issues currently facing our waters, from pollution to red tide, the last thing we need is the additional risks that come with oil extraction.
The second part of the amendment hardly seems as serious of an issue, but since the legislature has decided that voters will get bored with a longer ballot, these are bundled together. Amendment 9 would also prohibit the indoor use of e-cigarettes and vaping devices. The amendment doesn’t restrict the use of these devices inside private residences (unless they’re used for child or health care) nor in standalone bars or hotel rooms where smoking is allowed. It’s questionable who would be enforcing this, but since it’s part of the bundle, voters opposed to oil drilling will need to go along with this as well.
Amendment 11 – Yes
This amendment has three parts, all of which are basically a constitutional cleanup, removing outdated language. There is currently legislation that prohibits anyone without US citizenship from buying, selling, owning or inheriting property. These are laws were put in place in the 1920’s, aimed at prohibiting Asian immigrants from owning property. Archaic and unenforced, this language should be removed – especially in Miami-Dade, which is largely supported by foreign investments. Amendment 11 would delete this language.
Not directly related to the real estate market, but in interest of due justice, Amendment 11 would also remove the “Savings Clause” of 1885. As it states now, all criminals are held to the punishment that was on the books at the time of their arrest, as opposed to the current laws. In this day as drug laws are rapidly changing, it is only fair that those convicted of a crime be punished as current law dictates. This would also save money spent keeping inmates incarcerated.
Lastly in Amendment 11 is the removal of language approving a high-speed railroad. After Governor Rick Scott declared the project too costly to use taxpayer money, Floridians voted down the high-speed rail project in 2004, but the language was never removed from the Constitution. Thankfully, the privately funded Brightline train opened this year connecting Miami with Ft. Lauderdale, West Palm, and eventually Orlando.
Amendment 13 – Yes
Not a real estate issue, and not a huge community impact, but a moral and emotional issue for many – Amendment 13 would ban greyhound dog racing, as it is in 40 other states. Not only does this eliminate an industry tarnished with animal neglect and abuse, many establishments offering dog racing don’t necessarily want it either. For whatever reason, there is also legislation on the books that prohibit gaming venues from offering any other gambling if they do not also have dog racing.
The ballots can be confusing. There are millions of dollars spent to sway voters one way or another. The Constitution Review Committee meets only every 20 years, so the outcomes are important.
Whichever way you decide to vote, there is one thing that is a must:
->> GET OUT THERE AND VOTE << –
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