Ben Strine

Florida
Cornell 2021 - Master's in Real Estate
Pitt 2019 - Finance, Accounting & Economics

[Ben Strine @BenStrine2]

The proposed property tax relief is for all residents in Florida, not just for seniors.

Non-residents receive no benefit, which accounts for a lot of the older generation.

The primary beneficiaries of these tax breaks are younger Floridians who own and are looking to own homes. Most older homeowners have owned for a long time, and are already locked into a lower, increase-limited, assessed value.

[Ben Strine @BenStrine2]

The bill was amended to take effect on January 1, 2027, rather than being phased in over 10 years (which was in the original version).

That being said, this falls short of the homestead property tax elimination that most Floridians want. Additionally, it sounds like the “Republicans” in the Florida Senate won’t even pass this watered down property tax relief.

[Ben Strine @BenStrine2]

Property taxes make up about 20% of all local and state revenue in Florida, and homesteaded properties pay about 1/3 of property taxes. This proposal keeps school taxes, so only reduces homesteaded property taxes by around 50%.

The net result is total budget decrease of about 3.5%, which only requires budgets to be rolled back a year or two and saves people a lot of money.

[Ben Strine @BenStrine2]

@RepMoniqueM While this is better than nothing, this falls short of what most Floridians were looking for: full property tax elimination on homesteaded properties. We are still renting our homes from the government under this proposal.

[Ben Strine @BenStrine2]

As a Florida House Representative, you sit in the exact body (House + Senate) that has to write and pass a Joint Resolution by 60% vote to get any property tax relief on the 2026 ballot. DeSantis can't do it for you.

The House filed multiple competing proposals that muddy the waters instead of unifying behind the straightforward non-school homestead tax elimination the Governor has been fighting for.

He's pushing to do it right so it actually passes, not dilute it with a buffet of half-measures. Your chamber controls the pen. Let's see action, not finger-pointing.

[Ben Strine @BenStrine2]

@carp_guy15 @TouhouWifeGuy You can see it on a map, he might play golf, but he certainly isn’t playing it at Mar A Lago because there isn’t a golf course there.

[Ben Strine @BenStrine2]

@TouhouWifeGuy There is no golf course at Mar A Lago.

[Ben Strine @BenStrine2]

@DefiyantlyFree What policies does he back that are good for Florida?

[Ben Strine @BenStrine2]

@JuanPorrasFL @ByronDonalds @realDonaldTrump Which policies of @ByronDonalds lead you to support him?

[Ben Strine @BenStrine2]

I wish they would make the analysis public rather than just the article so we could understand the assumptions they made.

Based on the article alone, they missed some key points:

1. The article acknowledges that sales of second homes and single family investment properties could drive home prices down in their recession scenario, at the same time as acknowledging that property taxes have an inverse relationship with property values, but does not mention that increased taxes on second homes and single family would likely lead to more sales of those property types, limiting price increases overall.

2. The article does not acknowledge that the current property tax system discourages mobility through long-term locked in assessed values, which discourages seniors from downsizing, which could open up larger housing options for younger homebuyers.

3. The article does not acknowledge that younger/newer homebuyers tend to pay much higher property taxes compared to older homeowners due to the higher assessed value, which keeps younger people from buyer a home because they will be coming in with a higher monthly cost.

If you manage to find the analysis, please send it along as I would like to read it! I tried finding it on RDC Research page but nothing came up.

[Ben Strine @BenStrine2]

@JuanPorrasFL @GlennaWPLG HJR205 only benefits those over 65, which is the worst option for property tax relief.

This will only make homes more expensive for younger Floridians without giving them the benefit of lower monthly costs.

[Ben Strine @BenStrine2]

I agree that getting younger Americans into homeownership is extremely important for our country and thank you for talking about the issue.

Can you offer more concrete details on how you would accomplish this though?

Large investors own about 2.5% of the housing stock in Florida, which would be great to get back onto the market, but I don’t think an outright ban would be legal. If they did sell, there would need to be some incentives for these properties to go to individuals for personal use rather than other investors.

Are you for property tax elimination for primary residences? This would make it easier for homesteaders to buy properties while disincentivizing ownership of non-homesteaded property.

[Ben Strine @BenStrine2]

Only 36% of property taxes come from homesteaded properties in Florida, so the entire shortfall could be made up by raising the millage rate on non-homesteaded properties by 56%.

People selling their secondary property can be seen as a good thing, as it brings more non-primary resident single family homes back onto the market, mitigating price increases.

[Ben Strine @BenStrine2]

@TrynaBeLogical @JordanSchachtel Local governments can always raise the millage rate on non-primary residences to bring in more property taxes. Additionally, the state government is in a financial position to help cover local governments that have a shortfall.

[Ben Strine @BenStrine2]

@HW_Helser @RonDeSantis Local governments can raise millage rates on non-primary residences to make up for the shortfall. This would also disincentivize ownership of second homes and single-family investment properties, which could help increase supply for resident homebuyers.

[Ben Strine @BenStrine2]

No, both people who own a primary residence, and those that want to own a primary residence benefit from this, but in different ways. Those who who want to own a primary residence arguably benefit more.

In Florida, where primary residence property tax elimination is on the table, assessed values can only rise 3% per year, meaning that many "boomers" are locked in to low assessed values, and therefore lower annual property taxes (about $4K for a home assessed at $250K for instance) . On the contrary, newer and generally younger homeowners and buyers have the assessed value based on the recent purchase price (about $6.8K on the current $425K median home price in Florida). The tax savings for a recent or new homebuyer are larger than that for long time home owners.

Meaningful impact in new supply is a whole different issue, mostly prevented by governments getting in the way of new development. The government should get out of the way, but that wasn't the type of supply I was talking about.

I was referring to getting existing supply, owned by non-residents, onto the market, and it is not magical to assume that disincentivizing second homeownership or ownership of single-family investment properties through shifting of the tax burden to those properties, would encourage sales of those property types, increasing supply for primary-residence homebuyers. Additionally, seniors are often disincentivized from downsizing under our current system as they often will be facing a higher property tax bill and overall monthly costs if they downsize, because they are giving up their long-term value cap.

For the question of interest rates preventing younger families from buying homes, interest rates aren't really that high right now compared to historical averages, and there's only so far they can go down. According to FRED, the average 30-year mortgage rate is 7.70%, and the current average is 6.24%. For the monthly cost savings to equate to that of eliminating property tax on primary residences, rates would have to get down to about 3%, which is unlikely any time soon.

Lower interest rates also have the negative externality of raising real property values across the board, which furthers the down payment issue you brought up. Primary residence property tax elimination only increases the value of homes that people intend to use as their primary residence, and will likely negatively impact values of non-primary residences, so primary residence property tax elimination is a more targeted approach.

Lastly, on your point of saving up for a down payment, there is a program that allows first time homebuyers to put only 3% down ($13K on the median home in Florida), which is a very modest amount to save up. Putting less down of course comes with higher monthly costs, but luckily we can help new homebuyers afford monthly costs by eliminating property taxes on primary residences.

[Ben Strine @BenStrine2]

Down payment and interest rates are part of the equation, but property taxes and insurance play a large role in what buyers are able to qualify/afford when it comes to mortgages.

Gen Z and Millennials are over twice as likely to utilize a mortgage when purchasing a property compared to Baby Boomers.

Assuming a 6% mortgage 30-year mortgage with 3% down (which helps with the down payment issue), a homebuyer would qualify for about a 23% higher monthly principal and interest payment if primary residence property taxes were eliminated (assuming a millage rate of 16).

Since younger generations are twice as likely to use a mortgage, they are the primary beneficiaries of now being able to afford to pay more on a home.

While this would certainly increase demand from this cohort, the price increase from this would be mitigated from increased supply. Supply would likely increase as property tax burdens are shifted to non-primary residences, which would disincentivize the ownership of second homes and single-family investment properties.

[Ben Strine @BenStrine2]

Downsizing is often financially infeasible for senior citizens due to our current property tax system.

As much as older generations seem easy to blame for housing affordability, our current tax structure incentivizes them not to sell. A senior in Florida could own a $1M market value home and have an assessed value of $200K (due to annual increase caps), so they only have a $3K tax bill. If they wanted to downsize into an $800K home, they would be looking at a $12K tax bill. When our current structure increases seniors monthly costs if they choose to downsize, it’s understandable why they would choose not to do so, which has a negative effect on supply.

If we eliminate property taxes on primary residences, seniors would be more likely to downsize as they are not negatively financially impacted for doing so.

[Ben Strine @BenStrine2]

If you raised property taxes 10% annually, you would further prevent younger families from buying homes because they are unable to qualify/afford the monthly cost.

This proposal would lower homeownership rates across the board and encourage more people of all ages to rent.

If you want less of something, tax it, which rings true for home ownership.

[Ben Strine @BenStrine2]

This notion is incorrect when it comes to primary residence property tax elimination for all.

Elimination of property taxes for primary residences benefits younger families as it substantially reduces monthly costs for primary residences and disincentives owning non-primary residences.

The reduction in monthly costs gives resident homebuyers an advantage when competing with investors and second home buyers.

Furthermore, as the tax burden is shifted towards non-primary residences, owners of second homes and investment properties will be incentivized to sell, which increases the supply of housing, mitigating increases in home prices from property tax reduction.