In April, the Florida Supreme Court ruled that homeowners who rent their property are not entitled to the full homestead tax exemption. In response, the Sarasota Housing Authority has shut down its home sharing program.
By Sophia Brown.
Original Air Date: June 16, 2023
Official Transcript
Johannes Werner: In April, the Florida Supreme Court sided with the Sarasota County Property Appraiser in a lawsuit filed by a homeowner who was told to pay tens of thousands of dollars in back taxes after he rented a room above his garage. At the heart of the suit was the question whether homeowners who rent rooms are entitled to the full homestead tax exemption. They are not, according to the Supreme Court. That ruling now prompted the Sarasota Housing Authority to shut down a home sharing program involving hundreds of homeowners and tenants. And that’s probably just the beginning of the fallout for affordable housing efforts all over Florida. Sophia Brown walks us through that story now.
Host: The Sarasota HomeShare Program matched those seeking affordable housing with homeowners willing to rent parts of their property. But as of June 2, the Sarasota Housing Authority shut down the program due to a recent Florida Supreme Court ruling that homeowners cannot claim a full homestead property tax exemption if they rent their property to tenants. At least one member of the HomeShare program is now being asked to pay for past tax credits after living with the same housemate for three years. In a city where affordable housing is sparse, this ruling could have devastating effects on Sarasota homeowners and home seekers alike.
On April 6, the Florida Supreme Court unanimously sided with Sarasota County Property Appraiser Bill Furst in a dispute with Sarasota homeowner Rod Rebholz regarding homestead property tax exemption. Furst disputed whether Rebholz should have been receiving a full homestead exemption after renting several rooms to tenants. Furst concluded that at least 15% of the property was not being used as the landlord’s residence, and thus revoked the homestead exemption to 15% of the total property.
This decision has set a precedent for those looking to rent their property for additional income, especially in Sarasota where affordable housing is in short supply, and when the city has previously encouraged homesharing. In September 2019, the Sarasota County Commission unanimously voted to allow homeowners in single-family residential areas to add on living spaces up to 750 square feet without having it count as a separate house. In July 2021, the city of Sarasota commissioners unanimously voted to expand this ordinance to allow long-term rental units citywide. Just yesterday, the city of Venice moved towards a similar ordinance.
While homeowners who built and rented out these units were at risk of losing some of their homestead exemption from property taxes, this was determined by the county appraiser’s office on a case-by-case basis. Additionally, many older residential neighborhoods in Sarasota have traditionally included small separate residences, sometimes called granny flats or mother-in-law suites. But now that Rebholz owes tens of thousands of dollars in back taxes following the Florida Supreme Court’s ruling, this is likely to discourage homeowners from renting spaces on their properties.
Already, the effects are being felt in the Sarasota area. Bonita Chambers, who has lived in Sarasota since 1992, received a letter yesterday from the Sarasota Housing Authority explaining that the program had been eliminated.
Bonita Chambers: [Reading the letter] “We regret to inform you that we have made the difficult decision to no longer administer the HomeShare Sarasota program. After a couple of years and concerted effort, we have made a number—we have made a limited number of matches. We also want to make you aware of a very recent Supreme Court opinion regarding the homestead tax exemption.”
Host: Bonita has considered herself underemployed for the past 30 years, and first submitted an application to the HomeShare program in September 2022 in order to earn some additional income. Between our dishwasher, laundry machine and AC all breaking and needing to be replaced this month, Bonita says that leasing out part for home through the HomeShare program ensures that she has enough money to get by on her mortgage payments. Even though she doesn’t make much from it, she says that she has participated in the HomeShare program for the opportunity to provide housing for someone who desperately needs it.
BC: Before I got into this thing, I honestly thought the HomeShare program was a win-win situation for everyone. And so I heard about this thing and I thought, it’s the right thing to do. And the idea that, there was a lady that has written a book about a successful homeshare program they did in Pennsylvania, and I thought, doesn’t make sense? We offer affordable housing for people, they do the checks, the background checks on both sides to make sure that we’re qualified.
Host: These background checks that Bonita describes were routine part of the rigorous Sarasota HomeShare application process. HomeShare Coordinator Ruth Shaulis assumed her title in November 2020 and has since then worked to match homeowners with home seekers through a lengthy application process, a series of criminal and eviction related background checks, and multiple in-person interviews between applicants.
Ruth Shaulis: And I had a checklist of attributes such as, is the person a problem solver? Are they neat and orderly? Are they respectful? Are they reliable? And then opened up the conversation to any additional information they could give me with regard to that person’s personality and attributes. And then I interview the homeowner applicants, and through discourse with them, I’m able to determine many of those attributes. And then if they decided they wanted to enter into a relationship then I would provide a, what I refer to as a “swiss cheese lease.” Because we would fill in the blanks, add any particulars to it, and then the lease would be signed.
Host: The HomeShare program first began in 2017 or 2018 was run through the Sarasota Senior Friendship Center. In this iteration of the program, retired homeowners were primarily matched with visiting nurses that were seeking short-term housing. Later, when the program transitioned to be run under the Sarasota Housing Authority, applications opened up to a wider demographic of people. While Ruth says that both homeowners and home seekers with the program were primarily older residents or retirees, families of children, recent graduates and other low income working class people all utilized the program.
Ruth describes many of the home seekers she has worked with as folks living on social security, others living out of their cars or through the kindness of friends and family. She says in a one bedroom, one bathroom apartment in Sarasota—if you can find one that’s available to rent—costs far more than these people can afford.
RS: Now we’re in a particular situation with regard to inflation and economy and aging baby boomers like myself, where suburb doesn’t fit anymore. And there are so many people in need in Florida, it’s like either people have or they don’t have. The middle ground, the affordable housing ground, there’s just isn’t inventory. Everybody’s got a waiting list. Excuse me, and everybody’s waiting list is not a week long, not a month long, but years long.
Host: Ruth suggested that the Sarasota-Manatee based nonprofit, Making An Impact, can provide some potentially useful resources in the meantime. But she also says that over the past three years of her working as HomeShare Coordinator, more and more people have been unable to find affordable housing in the area.
BC: Ruth, over the years, she had gone beyond the call of duty with—it became kind of a mission, I think, for her to do the right thing. And why it should be shut down, oh my God. It’s like the laws in the state are just beyond imagining.
Host: This has been Sophia Brown reporting for WSLR News.
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