Recently, I was approached by citizen advocacy groups to present to the Orange County Board of County Commissioners a referendum to freeze rent increases. This process requires the board to have a Public Hearing to approve placing an item on the ballot where the voters may decide for Orange County to have a rent freeze on increases for 12 months. On June 23, 2020, I will present the below Commissioner’s Report to the board to ask for a Public Hearing on July 7, 2020.

Your public comment is important to help the Commissioners make a decision to move forward or not on the rental freeze on increases.

Use this link to make a public comment: https://bit.ly/OCPublicComment

The Problem

Due to the COVID-19 pandemic, the government created economic hardships for residents of Orange County, creating a housing emergency so grave as to constitute a serious menace to the general public. The inability to pay increased rent leads to evictions and homelessness and at a time when it is critically vital that Florida residents have housing to prevent the further risk of exposure to the virus.¹ Rising rents will also increase the financial instability of families and individuals holding them back from recovery, which can affect the overall economy.

Data and Research

In May 2018, Central Florida’s inter-jurisdictional Regional Affordable Housing Initiative (RANI) explained that the rising cost and lack of available affordable housing were at a crisis in our community.² The report recognized that National and regional home prices and rents were pushing well above historic limits when compared to income and affordability. The report further identified that the situation had passed the point of concern and is now a crisis. At that time, the American Community Survey (2016) reports 230,344 Central Florida households carry housing costs exceeding 30% of their incomes.

In April 2019, Mayor Jerry Demings acknowledged the growing affordable housing issue and launched the Housing for All Task Force to prioritize short and long-term solutions to address the housing crisis in Orange County. In November 2019, the housing for all task force prepared its 10 Year Action Plan.³ On March 24, 2020, the Orange County BCC approved an ordinance for a housing trust fund codified as Article VIII, Chapter 2 with the goal to “create and preserve affordable rental and ownership housing for moderate-income, low-income, and very-low-income persons and households in Orange County.” 

According to the Shimberg Center for Housing Studies at the University of Florida dated May 2019, prior to the COVID-19 pandemic, the Orange County had over 223,433 renter households. Of the overall renter households, approximately 67,432 were housing cost-burdened, and extremely low-income residents (earning less than 30 percent of Adjusted Median Income (AMI)) make up 30.8% percent of households facing severe housing cost burdens countywide.⁴   The study also shows that 209,278 residents of Orange County work in the leisure and hospitality industry and an additional 88,436  residents work in the retail industry, both of which have been devastated by the economic impacts of the COVID-19 pandemic.⁵

In March and April of 2020, the federal government and a growing number of cities and states acted to protect people from becoming homeless by preventing evictions by implementing moratoriums on processing eviction actions.⁶

According to the Florida Department of Economic Opportunity, over 1.4 million confirmed COVID-19 related initial claims for reemployment assistance have been submitted as of May 23, 2020. 

Approximately 161,585 of those claimants are Orange County Residents.⁷ More than 10 percent of initial claimants were from Orange County, while, according to the U.S. Census Bureau, Orange County’s population makes up less than 7 percent of state residents. 

Historical data indicates that rents will continue to increase in the future. Based on information from Apartment List’s Rentonomics report⁸ the Year-to-Year rental rates from 2016 to 2020 as indicated by the table below, the rental trend indicates that rents will increase in 2021.   

Comparing vacancy rates with rental trends it shows that rent will continue to increase even if there is an increase in inventory. For example, in 2017,  the vacancy rate in Orlando, Florida was 6.1%; followed by 6.3% in 2018 and 6.9% in 2019.⁹ If we correlate the table below with the vacancy rates from 2017 – 2019 we see that the rent continued to increase even when there was an increase in inventory.

Month/Year	Median 1BR	Median 2BR	M/M Rent Change	Y/Y rent change
June 2016	$1,050	$1,200	1.5%	7.6%
February 2017	$1,120	$1,290	1.5%	2.5%
February 2018	$1,040	$1,240	0.7%	7.4%
February 2019	$1,062	$1,272	0.0%	3.1%
February 2020	$1,081	$1,295	0.0%	1.7%

Stakeholders

Tenants: Due to the government decision to help reduce the spread of COVID-19, residents of Orange County have lost their jobs entirely or experienced a loss in pay. This affects their ability to pay their rent and other expenses. If they end up homeless, it places them more at a health risk to themselves and others. The proposed solution will provide them with stability in their housing costs and enable them to better plan for financial recovery. It is assumed that they will be in support of the proposed solution because it will benefit them financially.

Single Family Rentals (SFR) – 23% of all Single Family Homes and 39% of all rental properties in the Orlando Area.¹⁰

“Mom and Pop” Single Family Home Rental Landlords: This category of landlords most likely has a mortgage on the home(s) they rent. Their profit margins average a couple of hundred dollars a month to an average of 15% ROI annually.¹¹ They depend on the monthly rent to pay the mortgage and losing this income can mean defaulting on their mortgage. With the COVID-19 pandemic, most banks are working with mortgage holders to delay payments and place them at the end of their loans. These landlords have a closer relationship with their tenants and are more willing to work with them on their rent payments. It is assumed that these landlords will be in support of the proposed solution because they most likely were not going to raise rents during these tough times anyways.

Securitized and Publicly Traded Single Family Home Rental Corporations – about 5-10% of the SFRs in the Orlando Area: This category of landlords do not have mortgages and are funded by investors and publicly traded stocks. They don’t have a strong relationship with their tenants and are usually managed by staff or a management company. Unless given directives from the board of directors, staff will not deviate from their policies regarding rent payment collections. It is assumed that these corporations will not be in support of the proposed solution because they must answer to their stockholders and can spread their profits throughout all the properties they own across the nation. While Orange County was hit hardest economically due to its dependence on tourism¹² , the corporations can leverage their losses by rushing evictions and raising rents across their properties across the nation to keep their profits from dropping, thereby keeping their stockholders happy and from selling their stocks¹³ . It is assumed that they will not support the proposed solution because they have a strategy to raise their rents by 4% annually and have quick evictions for a quick turnaround to prevent loss of profits; changing this strategy will take a board of directors meeting and may lower the price of their stocks. These types of properties are 8 percent more likely than small landlords to file eviction notices.¹⁴

Multi-Family Rentals – 61% of all rental properties in the Orlando Area.

Multi-family or Apartment Complex Owners: This category of landlords do not have mortgages and are funded by investors or commercial loans. They don’t have a strong relationship with their tenants and are usually managed by staff or a management company. Unless given directives from the building owners or investors, staff will not deviate from their policies regarding rent payment collections. It is assumed that these investors or owners will be in support of the proposed solution because they most likely were not going to raise rents during these tough times anyways. 

Securitized and Publicly Traded Apartment Complex Corporations: This category of landlords do not have mortgages and are funded by investors and publicly traded stocks. They don’t have a strong relationship with their tenants and are usually managed by staff or a management company. Unless given directives from the board of directors, the staff will not deviate from their policies regarding rent payment collections. It is assumed that these corporations will not be in support of the proposed solution because they must answer to their stockholders and can spread their profits throughout all the properties they own across the nation. It is assumed that they will not support the proposed solution because they have a strategy to raise their rents by 4% annually and have quick evictions for a quick turnaround to prevent loss of profits; changing this strategy will take a board of directors meeting and may lower the price of their stocks.

Orange County Businesses: Orange County Businesses are struggling financially due to mandatory closings because of the COVID-19 pandemic. By helping residents of Orange County find financial stability it will help allow the local economy to recover faster. It is assumed that the businesses will support the proposed solution.

Orange County Voters: Orange County Voters will be the ones making the decision on whether to accept the proposed solution. The proposed solution is a referendum that needs to be on the ballot for voters to vote on. It is assumed that the voters will want the opportunity to have their voices heard and will support the proposed solution added to the ballot.

Orange County Board of County Commissioners: The board will make the decision to either place the proposed item on the ballot or not for the people to decide on the solution they prefer. Most of the board members have expressed their concern for tenants and the financial and physical health of their constituents. The Mayor has also shown that he believes the people should have the opportunity to have their voices heard as indicated during his Transportation Sales Tax referendum initiative. Therefore, it is assumed that the majority of the board will support the proposed solution.

Benefit Analysis to Stakeholders

How will this proposed solution benefit Orange County tax revenues and both the landlord and the renters

• This proposed solution will freeze rent at current rates for twelve months. 
• Constituents stand to gain from the rent freeze as they won’t have to worry about rent increasing. 
• Landlords will also benefit because it allows them to keep their tenants in place and continue collecting rent. 
• If the Landlords are able to continue collecting rent, they will not have to experience deficiencies in revenue, which solidifies their ability to pay their mortgage on time and pay taxes. This in turn increases revenue for the County. 
• By implementing a rent freeze, consumers will have more spending money. In turn, the local economy (businesses) will do better because consumers will have more money to spend on things aside from rent.
• If the businesses are doing better, they will have increased revenue, which solidifies their ability to pay their rent on time and pay taxes. This in turn increases revenue for the County.

Evidence-Based Strategy

Background

This is a case of first impression as far as the effects of COVID-19 on our economy. However, affordable housing has been a historical issue in Orange County prior to the pandemic.

Did past reforms/solutions to this problem to improve the conditions of marginalized communities (e.g. Latinos, immigrants, children)? 

Although there are no past reforms, the immediate response to the rental crisis has been the Orange County Rental Assistance Program. This program has been overwhelmed. We had to close the program just 2 weeks after opening because of the overwhelming response from residents in need of assistance. We have additional CRF funding to re-open a new financial assistance program, but county staff has already stated that the funding will not be enough to help the growing need for rental assistance. Additionally, the Assistance Program offers limited support with a one-time stimulus payment to residents in the amount of $1000.00. The Assistance Program does not provide a long term solution to the problem.

Best Practices and Other Jurisdictions’ Examples

In this document we will only focus on the Rent Freeze Referendum.  A review of how other jurisdictions have implemented a Rent Freeze are as follows: 

During COVID-19

Montgomery County, Maryland Rental Freeze

• The COVID-19 Renter Relief Act (the Act), effective April 24, 2020, prohibits landlords from increasing existing tenants’ rent by more than 2.6% after April 24 and during the COVID-19 catastrophic health emergency signed by the Governor of Maryland on March 5, 2020. For example, any rent increases scheduled for May 1, 2020 may not represent an increase of more than 2.6%. Further, the Act prohibits landlords from notifying tenants of a rent increase of more than 2.6% during the COVID-19 emergency¹⁵ (which began March 5) and for 90 days after the emergency ends. 
• The COVID-19 Renter Relief Act limits rent increases to the percentage increase of the County’s 2020 Voluntary Rent Guideline (VRG) of 2.6%. That number was established by the County Executive on February 3, 2020. Under requirements of the County law it represents the rental component of the Consumer Price Index for the Baltimore-Washington Metropolitan Area and it is updated each year. The VRG cannot be changed until 2021. The VRG provides reference information for landlords and tenants to understand average rent increases from the prior year and before the COVID-19 Renter Relief Act had no impact on rent levels allowed in the County.
• Landlords who previously notified tenants of a rent increase in excess of 2.6% that comes into effect after April 24 and during the catastrophic health emergency or, who gave tenants notice of a rent increase of more than 2.6% since the start of the March 5 emergency, must either notify them to disregard that notice or notify them that the rent amount under the notice will be an amount representing an increase of no greater than 2.6%.
• This limitation on rent increases and notices applies to all licensed residential rentals in Montgomery County, including rental units in multifamily buildings, houses, townhouses, individual condominium units, and accessory dwelling units.

Baltimore, Maryland City Rent Freeze

The Baltimore City COVID-19 Renter Relief Act (Bill 20-0526) prohibits landlords from announcing rent increases during a declared state of emergency and within the 90-day period after the state of emergency is lifted.  It also prohibits fees for late payment or no payment of rent, as well as all rent increases that are scheduled to take place during the state of emergency.

Philadelphia, Pennsylvania Emergency Housing Protection Package Proposed Legislation 

The package of six bills and one resolution would¹⁶: 

• Extend the eviction moratorium for 60 days after the state of emergency order is lifted for residential renters as well as small businesses, with an exception where there is a risk of immediate harm; introduced by Councilmember Helen Gym.
• Allow renters with financial hardships to pay rent over an extended period using a year-long repayment plan; introduced by Councilmember Jamie Gauthier.
• Create an eviction diversion program that runs through December 31, 2020, requiring both landlords and renters to participate in a mediation process designed to help resolve issues before they lead to formal evictions; introduced by Councilmember Helen Gym.
• Stabilize rents during the pandemic and for a year afterward, during which landlords would be limited from increasing rents, retroactive to March 1, 2020, for those experiencing financial hardship related to the pandemic; introduced by Councilmember Kendra Brooks.
• Waive late fees on rent during the pandemic and for two months afterward, which is retroactive to March 1, 2020, for those experiencing financial hardship related to the pandemic; introduced by Councilmember Kendra Brooks.
• Allow renters who are illegally locked out to recover damages caused by the illegal lockout; introduced by Councilmember Jamie Gauthier.
• Call on the PA General Assembly and the US Congress to provide municipalities a comprehensive relief package to stabilize the local rental housing market and assist property owners, including large-scale rent subsidies for landlords to make up for lost revenue.

Here are some quotes from Philadelphia’s State website:

In Philadelphia, 1,700 evictions are already scheduled and thousands more will be filed once the moratorium is lifted. When people lose their homes, it becomes more difficult to find the jobs they need to pay their rent and their children are more likely to enter foster care. Homelessness impacts the entire city, disrupting children’s education, risking public health, and increasing costs at City shelters and jails. This emergency housing package presents a bold method for recovery where housing is understood to be a basic human right.

“Our package presents a just solution to protect our most vulnerable neighbors and helps our city’s economy recover without leaving anyone behind,” said Councilmember Helen Gym. “Housing stability is crucial to economic stability. If we don’t act, people buried under mountains of debt will lose their homes before they have a chance to rebuild their income – and landlords can’t collect rent from people who are unemployed and homeless.”

Comparing Jurisdictions – Rent Freeze Implemented Prior to COVID-19

	Orange County FL.	Curry County, Oregon	Josephine County, Oregon	Jefferson County, WA
Action Taken	None yet	2019:  Emergency Housing Declaration	2017:  Declared a Housing Emergency	2017: State of Emergency due to housing situation
Pre-Covid Unemployment17	April 2019: 2.7%	April 2019: 5.6%	April 2019: 5.1%	April 2019: 6.0%
Post-Covid Unemployment17	April 2020: 16.5%	April 2020: 18.0%	April 2020: 15.5%	April 2020: 17.3%
Unemployment Change	511% Increase	221% Increase	210% Increase	188% Increase
Cost burdened renter households (before/after action taken)18	40%	35%	40%/38%	33%/30%
Renter wages vs. Rental Prices19	Renters need to earn $22.86 per hour –  2.7 times the state minimum wage & 1.3 times the average renter’s wage – to afford a 2-bedroom housing unit at fair market value. Renters need to work 91 hours at  minimum wage to afford a 1-bedroom housing unit.	Renters need to earn $18.83 per hour – 1.6 times the average renter’s wage – to afford a 2-bedroom housing unit at fair market value. Renters need to work 54 hours at minimum wage to afford a 1-bedroom unit.	Renters need to earn $18.37 per hour – 1.6 times the average renter’s wage – to afford a 2-bedroom housing unit at fair market value. Renters need to work 49 hours at minimum wage to afford a 1-bedroom unit.	Renters need to earn $19.42 per hour – 2.0 times the average renter’s wage – to afford a 2-bedroom housing unit at fair market value. Renters need to work 49 hours at minimum wage to afford a 1-bedroom unit.
Population Growth Rate20	2.12%	.29%	1.36%	.97%

Pros and Cons of Rent Control

Based on Case Studies, “many of the criticisms of rent regulations are ill-founded on both theoretical and empirical grounds”²¹  based on first-generation programs that existed in the 1950s. More sophisticated second-generation programs that are “well-designed rent regulations can improve the economic security of tenants and, at the same time, have a beneficial effect on the market’s efficiency” and must be taken on a case-by-case basis.

Overall, rent control helps tenants because it provides insurance against rent increases, potentially limiting displacement. For example, if long-term tenants have developed neighborhood-specific capital, such as a network of friends and family, proximity to a job, or children enrolled in local schools, then tenants face large risks from rent appreciation. In contrast, individuals who have little connection to any specific area can easily insure themselves against local rental price appreciation by moving to a cheaper location. Those invested in the local community are not able to use this type of “self-insurance” as easily since they must give up some or all of their neighborhood-specific capital. Rent control can provide these tenants with this type of insurance.²² On the other hand, although rent control prevents displacement of incumbent renters in the short run, if not done with an overall comprehensive plan, in the long run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.²³

Pros	Cons
Rent control policies have been effective at shielding tenants from evictions and sudden rent increases, particularly the lower-income and older tenants who are at a high risk of becoming homeless.23	In order to get around rent control, investors may convert rental properties to ownership properties to make a profit. Lost rental housing supply likely drives up market rents in the long run.23
Rent control prevents the displacement of incumbent renters in the short run.23 Therefore, rental control helps tenants because it provides insurance against rent increases, potentially limiting displacement.22	Investors may teardown properties to start over again and raise rents. This may in the long run decrease affordability, fuel gentrification, and create negative externalities in the surrounding neighborhood.23
Rent control appears to help affordability in the short run.23
If planned right, rent control creates investment in new rental units at higher rates so that when a short term rent control ends, it can create a more competitive rental market in the long term.21

Case Law and Legal Analysis of a Rent Stabilization Ordinance 

1. This board has the authority to implement a 1 year rent freeze when it finds a housing emergency exists 

Based on a finding of the existence of an emergency, rent control legislation in Florida has been enacted on the local level. Muss v. City of Miami Beach, 339 So. 2d 236 (Fla. 3d DCA 1976); Lifschitz v. City of Miami Beach, 339 So. 2d 232 (Fla. 3d DCA 1976); City of Miami Beach v. Forte Towers, Inc., 305 So. 2d 764 (Fla. 1974).

Such legislation is properly authorized under the police power of the State and its political subdivisions. DBPR v. Nat’l Manufactured Housing Federation, Inc., 370 So. 2d 1132 (Fla. 1979); City of Miami Beach v. Forte Towers, Inc., 305 So. 2d 764 (Fla. 1974).

To be justified, such [rent control] regulations must be reasonable and in the interest of the public welfare since they necessarily impinge on the right to contract and the right to pursue a lawful business;  DBPR v. Nat’l Manufactured Housing Federation, Inc., 370 So. 2d 1132 (Fla. 1979).

A proposed city rent control ordinance must comply with the statutory requirement that an ordinance is required to recite a finding establishing the existence of a housing emergency so grave as to constitute a serious menace to the general public, and such controls are necessary and proper to eliminate such grave housing emergency. § 125.0103(5)(b). 

1. When a totality of circumstances show that a housing emergency exists then a properly drafted municipal rent stabilization ordinance is upheld. 

In Lifschitz v. City of Miami Beach, the Florida Supreme Court upheld the City of Miami’s municipal rent ordinance finding that the existence of an emergency at the time of its passage rested in the judgment and discretion of the city council. Glackman v. City of Miami, 51 So.2d 294 (Fla.1951); State v. City of Miami Beach, 234 So.2d 103 (Fla.1970). The Court further found that there was ample evidence as to the factors creating a housing emergency, for example, a scarcity of housing, accelerating rents and a constant influx of people seeking housing in the area. 

The Lifschitz case followed a litany of cases in the City of Miami to control the rental market that came before the Florida Supreme Court and failed. In 1972, Miami Beach v. Fleetwood Hotel, Inc., 261 So. 2d 801 (Fla. 1972), the law was struck down on three grounds: (1) there was no emergency to justify its existence; (2) Florida municipalities do not have the power to adopt rent controls under home rule powers; and (3) the ordinance included an illegal delegation of legislative authority without appropriate guidelines to the rent control administrator.

In 1973, the city passed a new law after the state legislature expanded home rule powers to include the power to adopt rent control. The new law was struck down on the basis that it set confiscatory rent guidelines. Miami Beach v. Forte Towers, Inc., 305 So. 2d 764 (Fla. 1974) (holding: local government has the power to implement rent control through home rule, but the ordinance failed to pass muster on constitutional grounds). 

In 1974, a third ordinance was adopted and upheld by the trial court in Abenson v. Miami Beach, No. 75-7868 (Dade County, Fla. Cir. Ct. 1lth Dist., Jan. 1976). 

By the time the Lifschitz case was presented to the Court, the City had learned from the prior cases, and was able to implement an ordinance that properly addressed the housing emergency, but still enforced the necessary rights of action of Landlords and tenants. The Court further found that the preamble in the ordinance clearly demonstrated the City’s decision that an emergency existed. The preamble states, 

“WHEREAS, the deterioration and demolition of existing housing; an insufficient supply of new housing; the inhibition upon the construction of new housing resulting from the operation of the Florida Pollution Control Act, other environmental protection laws, and an insufficient supply of financing; and the existing economic inflationary spiral have resulted in a substantial and critical shortage of safe, decent and reasonably priced housing accommodations as evidenced by the low vacancy rates prevailing in the City; and

‘WHEREAS, this emergency cannot be dealt with effectively by the ordinary operations of the private rental housing market, and unless residential rents are regulated, such emergency and the inflationary pressures therefrom will produce a serious threat to the public health, safety and general welfare of the citizens of Miami Beach, Florida;”

Id. at 234, 235; see also City of Miami Ordinance 74-2018

The case law further specifies that an increase in the cost of living (an inflationary spiral) alone is not a justification for rent control legislation which limits the amount of rent which a tenant may be required to pay. City of Miami Beach v. Fleetwood Hotel, Inc., 261 So. 2d 801 (Fla. 1972). 

The type of emergency which would be a viable basis for such legislation may also include some, but not all, of the following factors: 

• An acute shortage of safe, sanitary, and adequate low-cost rental housing accommodations. 
• The majority of residents are senior citizens on subsistence level pensions and cannot afford the existing rents for the available housing. 
• Rents are increasing at an inflationary spiral whereas the income of the residents remains fixed. 
• The population increases daily due to an influx of tourists and [omitted] refugees. 
• A scarcity of housing. 
• Accelerating rents.
• A constant influx of people seeking housing in the area. 

See City of Miami Beach v. Fleetwood Hotel, Inc., 261 So.2d 801 (Fla. 1972). Justice Ervin (dissenting);  Lifschitz v. City of Miami Beach, 339 So.2d 232 (Fla. App. 1976)(ordinance upheld). 

III. Prior to COVID-19 Orange County was in a housing crisis. 

Prior to COVID-19, Orange County had been experiencing a marked influx of population.  Orange County’s population is at approximately 1.4 million, and, prior to COVID-19, was growing by a net 1,000 new residents each week, which equates to 50,000 net new residents a year.²⁴ The influx in population also included a number of families from Puerto Rico who were escaping from devastation from Hurricane Irma in 2017, and a majority of these migrant families have remained in Orange County since that time. 

The rental housing market has not been able to keep up with the increase in population–especially in our multi-family rental market. According to the 2018 U.S. Department of Housing and Urban Development Comprehensive Housing Market Analysis²⁵ , the rental housing market in Orange County has seen a steady decline in vacancy rates since 2010. In 2018, rates were estimated at 7.3 percent, down from 13.1 percent in 2010. Approximately 62 percent of renter households live in multifamily buildings, typically apartments, and 34 percent of renter households lived in single-family homes (2016 American Community Survey [ACS] 1-year ata). Strong demand for apartment units due to increased net in-migration has contributed to rent growth and declining vacancy rates since the early 2010s. Even with a wave of apartment completions during 2016 – 2017 that totaled 4,575 units, the highest number since 2002, apartment market conditions are tight. The apartment vacancy rate during the fourth quarter of 2017 was 3.9 percent, down from 4.6 percent a year earlier (MPF Research). Although many apartments are in lease-up, the number of apartments offering concessions has declined, and rent growth has strengthened. Based on these numbers Orange County lacks decent and reasonably priced housing accommodations as evidenced by the low vacancy rates prevailing in the County. 

To make matters worse, if our residents cannot afford an apartment, they have very little alternative housing to choose from. According to the Regional Affordable Housing Initiative (RAHI) May 2018 Report,  Orange County has a lack of diversified affordable housing, which our Housing for All task force has defined as the “missing middle.” This means that the inventory we do have is not affordable, and rental costs in Orange County continue to rise as indicated by the numbers provided on page 6 of this report.  

Not only has our rental supply market been drying up, but our most vulnerable residents also are not earning enough wages to afford the supply that is available. As you can see from the chart above on pages 11 – 12, based on the 2019 National Low Income Housing Coalition’s Out of Reach Report, residents need to earn $22.86 per hour –  2.7 times the FL state minimum wage and 1.3 times the average renter’s wage to afford a 2-bedroom housing unit at fair market value. This means that residents need to work 91 hours at the current minimum wage to afford a 1-bedroom housing unit or 108 hours to afford a 2-bedroom housing unit. Residents need to work 44 hours at the average wage to afford a 1-bedroom housing unit or 52 hours to afford a 2-bedroom housing unit. (see cite supra).

IV. The housing crisis in Orange County, Florida has been exacerbated by the COVID-19 pandemic raising the housing crisis to a housing emergency such that a rent stabilization ordinance is necessary 

Based on the information in Section III, we see that at least 3 of the factors constituting a housing emergency per the Lifschitz case are present–i.e (1) scarcity of housing, (2) accelerating rents and, (3) a constant influx of people seeking housing in the area, and the additional factors of rents increasing at an inflationary spiral whereas the income of the residents remains fixed. 

Presumably, we could argue that we were already in a state of emergency pre-COVID-19. Now, let’s consider the additional factors contributing to the rental housing situation in Orange County post-COVID-19. We are seeing an unprecedented rise in unemployment. As previously indicated in this report, Orange County relies heavily on the tourist and hospitality industries to support its residents. According to the Shimberg Center for Housing Studies at the University of Florida, 209,278 residents of Orange County work in the leisure and hospitality industry, and an additional 88,436  residents work in the retail industry, both of which have been devastated by the economic impacts of the COVID-19 pandemic.⁵ 

The mass closures of our tourist and hospitality industries resulted in a large portion of Orange County residents being out of work, and they had to turn to unemployment to cover their costs of living. Prior to Covid-19, we saw unemployment rates at 2.7% as of April 2019. After COVID-19 that number spiked to 16.1% in April 2020. This is a 511% increase. Although federal funding has helped increase the amount our residents receive, they are still on a fixed income ranging in $600 – $875/week. For a family of 4, this keeps them at the poverty level. Moreover, people are still playing catch up from the long wait periods in receiving their unemployment checks. The ongoing and pervasive issues many citizens still face with obtaining their unemployment benefits aggravate the unemployment situation; it creates a one-two punch where workers have no income and cannot get the assistance they are authorized.

The impending financial crisis has not been ignored by legislators. The federal, state and local governments have recognized the demonstrable need for swift action on the untenable affordable housing situation in Orange County, which has been severely exasperated by the COVID-19 situation.  The governor’s stay on eviction is further evidence of the unique and material housing situation created by the novel coronavirus situation. 

Unfortunately, the stay implemented by Governor DeSantis will lead to mass evictions. We have had conversations with many legal aid firms, one being Florida Legal Society who are in support of this rent stabilization referendum. In an Orlando Sentinel article released just prior to Governor DeSantis’ extension of the housing moratorium, Jamos “Jay” Mobley, an attorney with the Legal Aid Society, commented that when the moratorium lifts, the region may see mass evictions. Many of the residents who have reached out to him have already received “reminder letters” threatening to begin proceedings as soon as possible²⁶. Once evictions resume, Mobley expects a “huge number” to be served all at once. And in many cases, landlords will come out the winners because Florida law requires tenants facing eviction to pay the rent they owe into the court registry to get a hearing for their case. If tenants can’t pay the court within just five days, “the landlord is entitled to an immediate default judgment for removal of the tenant.”

If residents are forced out of their homes they will likely resort to living with family members in close quarters, or worse, living in their cars or homeless shelters. The reality of this situation will put people in danger by making them more susceptible to contracting the COVID-19 virus. 

The acute and significant change to the employment situation, on top of a bad housing situation that consists not only of high rent prices, but also (1) scarcity of housing, (2) accelerating rents (3) a constant influx of people seeking housing in the area, (4) income of the residents remains fixed, (5) marked unemployment increase (6) a public health emergency (7) residents facing mass displacement from their homes with the inevitable result of making them more susceptible to the novel COVID-19 virus; (8) lacks decent and reasonably priced housing accommodations as evidenced by the low vacancy rates prevailing in the County. The totality of the circumstances support  the existence of “a housing emergency so grave as to constitute a serious menace to the general public, and such controls are necessary and proper to eliminate such grave housing emergency.”

Cost Benefit Analysis

Cost of implementing solution		Cost of doing nothing
Advertising Public Hearing and costs of placing the item on the ballot	>	Might see a spike in evictions, homelessness, need for government assistance leading to a loss in county tax revenues due to falling property values and consumer spending.

Social Equity Analysis

Social impact of implementing solution		Social impact of doing nothing
The residents can feel more secure with rent freeze safeguards in place, which will allow them to recover from the economic effects of COVID-19 faster.	>	Might see a spike in evictions, homelessness, need for government assistance.

Proposed Referendum and Legislation

Recitals & Findings 

The governing body must make and recite in such measure its findings establishing the existence in fact of a housing emergency so grave as to constitute a serious menace to the general public and that such controls are necessary and proper to eliminate such grave housing emergency. In any court action brought to challenge the validity of rent control imposed, the evidentiary effect of any findings or recitations shall be limited to imposing upon any party challenging the validity of such measure the burden of going forward with the evidence, and the burden of proof shall rest upon any party seeking to have the measure upheld.

Resolution

WHEREAS, Florida Statute § 125.0103 and Orange County Charter § 207  grants such legislative and charter authority to the counties of the State of Florida, which authority has been held to include the authority to enact rent control legislation; and  

WHEREAS, a grave and serious public emergency exists with respect to the housing of a substantial number of residents in Orange County; and 

WHEREAS, the scarcity of housing; accelerating rents; constant influx of people seeking housing in the area; rents increasing at an inflationary spiral; income of the residents remaining fixed or below the necessary amount to afford housing; the existence of a public health emergency of the novel COVID-19 virus; marked unemployment increase due to the COVID-19 pandemic; residents facing mass displacement from their homes with the inevitable result of making them more susceptible to the novel COVID-19 virus; decent and reasonably priced housing accommodations as evidenced by the low vacancy rates prevailing in the County; and

WHEREAS, Residents of Orange County are now facing extreme hardships exacerbated by the unprecedented impact of the current public health crisis, the Novel Coronavirus (COVID-19), and economic impact of that crisis, causing our pre-COVID-19 “housing crisis” to grow into a “housing emergency”; and

WHEREAS, COVID-19 first appeared in December 2019 and has spread throughout the world, and on March 11, 2020, the World Health Organization declared the outbreak a global pandemic; and

WHEREAS, on March 18, 2020, President Donald J. Trump announced that the Department of Housing and Urban Development (“HUD”) authorized the Federal Housing Administration (“FHA”) to implement an immediate foreclosure and eviction moratorium for FHA-insured single-family mortgages for 60 days due to the COVID-19 emergency; and

WHEREAS, On March 9, 2020, Florida Governor Ron DeSantis declared a state of emergency to help the state prepare for broader spread of COVID-19; and 

WHEREAS, On March 16, 2020, Orange County made a declaration of local emergency to ramp up the county’s efforts to prepare for and respond to local cases of coronavirus; and 

WHEREAS, Governor DeSantis issued Executive Order 20-91 on April 1, 2020, to instruct residents to stay at home and cease non-essential activities; and 

WHEREAS, Governor DeSantis issued Executive Order 20-94 on April 2, 2020, “to suspend and toll any statute providing for an eviction cause of action under Florida law solely as it relates to non-payment of rent by residential tenants due to the COVID-19 emergency for 45 days from the date of this Executive Order, including any extensions,” stating “I find that this emergency has impacted the ability of many Floridians with residential tenancies to make their rent payments” and “I find that providing targeted, temporary relief to Floridians with residential tenancies is in the best interest of the state and its people”; and  

WHEREAS, Housing stability is essential for residents of Florida to comply with these directives, as well as their continued ability to social distance, quarantine, and enter isolation, as needed, to slow the spread of the virus; and

WHEREAS, This public health crisis has devastated many industries, including the service, tourism, and hospitality industries; and 

WHEREAS, According to the Shimberg Center for Housing Studies at the University of Florida, 209,278 residents of Orange County work in the leisure and hospitality industry, and an additional 88,436  residents work in the retail industry, both of which have been devastated by the economic impacts of the COVID-19 pandemic⁵; and

WHEREAS, According to the Florida Department of Economic Opportunity, over 1.4 million confirmed COVID-19 related initial claims for reemployment assistance have been submitted as of May 23, 2020. Approximately 161,585 of those claimants are Orange County Residents⁷; and

WHEREAS, Tenants are still obligated to pay landlords, and mortgage-holders are still obligated to pay lenders; and 

WHEREAS, Orange County individual assistance is not enough to address the overwhelming response of the communities’ needs as evidenced that the program previously had to close just 2 weeks after accepting applications; and

WHEREAS, Unemployment claims are at an all-time high in Orange County Florida at 16.5% as of April 2020²⁷; and

WHEREAS, Prior to the COVID-19 pandemic Orange County was already in a “housing crisis”. In May 2018, Central Florida’s inter-jurisdictional Regional Affordable Housing Initiative (RANI) stated “National and regional home prices and rents are pushing well above historic limits when compared to income and affordability. The situation has passed the point of concern and is now a crisis”. In 2019, Mayor Demings and the Orange County Housing for All 10-Year Action Plan continues to describe Orange County as being in a “housing crisis”; and 

WHEREAS, In 2018, according to the Federal Reserve, 40 percent of Americans do not have cash on hand to cover an unexpected expense of $400²⁸; and

WHEREAS, Prior to this crisis, many residents were already living paycheck to paycheck in precarious economic circumstances. In 2016, 47 percent of Orange County, Florida’s families struggled to pay their bills and keep their heads above the fiscal waters²⁹; and

WHEREAS, According to the Shimberg Center for Housing Studies at the University of Florida dated May 2019, prior to the COVID-19 pandemic the Orange County had over 223,433  renter households. Of the overall renter households, approximately 67,432 were housing cost-burdened, and extremely low-income residents (earning less than 30 percent of Adjusted Median Income (AMI)) make up 30.8% percent of households facing severe housing cost burdens countywide⁴; and

WHEREAS, Historical data indicates that rents will continue to increase in the future⁹; and 

WHEREAS, Inability to pay increased rent can lead to evictions and homelessness at a time where it is critically important that Florida residents who currently have housing are not made homeless and further put at risk of exposure to the virus³⁰; and

WHEREAS, Studies have shown that short term rent-control policies have been effective at enhancing “the security of tenure by preventing “economic evictions.”²¹; and

Legislative Action 

NOW, THEREFORE, BE IT RESOLVED BY THE ORANGE COUNTY BOARD OF COUNTY COMMISSIONERS, that this Board:

Section 1. Adopts by referendum and incorporates as fully set forth in this Section the recitals and findings contained in the Preamble to this Resolution; and

Section 2. Finds that a housing emergency exists which is so grave as to constitute a serious menace to the general public; and

Section 3. Finds that rent stabilization measures preventing rent increases on residential properties, excluding those described in Section 4 below, are necessary and proper to eliminate the existing housing emergency which is so grave as to constitute a serious menace to the general public; and

Section 4. Pursuant to Florida Statutes 125.0103(4), such rent stabilization measures shall not apply to an accommodation used or offered for residential purposes as a seasonal or tourist unit, as a second housing unit, or on rents for dwelling units located in luxury apartment buildings. For the purposes of this section, a luxury apartment building is one wherein on January 1, 1977, the aggregate rent due on a monthly basis from all dwelling units as stated in leases or rent lists existing on that date divided by the number of dwelling units exceeds $250; and

Section 5. Defines residential properties, for the purposes of this resolution, as any building containing three or more residential rental units in which said units are occupied or intended to be occupied by one or more individuals as a residence, to include both those with written leases and those with month-to-month and week-to-week tenancies; and

Section 6. If approved by the qualified electors of Orange County pursuant to Florida Statutes 125.0103(5)(c), rent stabilization, as described in Section 3, shall be effective on November 4, 2020,  and expire on November 3, 2021; and

Section 7. Rent stabilization shall be effective for no more than one year unless extended or renewed by adoption of a new measure by this body and the qualified electors of Orange County, as provided by Florida Statutes 125.0103(3); and

Section 8. Overcharges. A tenant who has paid rent in excess of the rent authorized under this Ordinance shall have a right to recover such overcharge, and where such overcharge is willful and intentional, the tenant shall be entitled to institute an appropriate action in a court of competent jurisdiction for double the amount of such overcharge . The prevailing party shall be entitled to recover reasonable attorney’ s fees. Such action must be brought within two ( 2 ) years from the date of the overcharge.; and 

Section 9. Severability / Constitutionality / Read to conform

Language to Add to the Ballot

Ballot Title: RENT FREEZE TO REDUCE THE HOUSING EMERGENCY SO GRAVE AS TO CONSTITUTE A SERIOUS MENACE TO THE GENERAL PUBLIC

“Should residential rent increases, excluding those described in Florida Statutes 125.0103(4), be prohibited for one year, in order to eliminate the current housing emergency, which is so grave as to constitute a serious menace to the general public?”

Action Plan

Milestones

Milestone	Due Date
Commissioner’s Report and Referendum sent to the Orange County BCC	6/8/20
Orange County BCC discussion on the Referendum	6/23/20
Public Hearing for BCC to vote on placing the Referendum on the ballot	7/7/20
Ballot Language submitted to the Supervisor of Elections (Note: I am in discussion with the Supervisor of Elections on the timeline)	7/8/20
Referendum is on ballot and is voted by the voters	11/3/20

1. https://www.cdc.gov/coronavirus/2019-ncov/community/homeless-shelters/unsheltered-homelessness.html [↩]
2. https://bit.ly/309cZpZ [↩]
3. https://bit.ly/2BzaVgF [↩]
4. http://flhousingdata.shimberg.ufl.edu/2019-rental-market-study.pdf [↩] [↩]
5. http://flhousingdata.shimberg.ufl.edu/covid-19/results?nid=4800 [↩] [↩] [↩]
6. https://www.marketplace.org/2020/03/18/growing-number-of-cities-states-halting-evictions-because-of-coronavirus/ [↩]
7. http://lmsresources.labormarketinfo.com/covid19/initial_claims.html [↩] [↩]
8. https://www.apartmentlist.com/rentonomics/march-2020-rent-report/ [↩]
9. https://managecasa.com/articles/us-rental-occupancy-rates/ [↩] [↩]
10. https://learn.roofstock.com/blog/single-family-rental-investing-markets [↩]
11. https://mymortgageinsider.com/the-complete-guide-to-investment-property-mortgages-in-2018/ [↩]
12. https://www.usatoday.com/story/money/2020/04/09/coronavirus-30-places-where-recession-could-hit-hardest/2964955001/ [↩]
13. https://d3n8a8pro7vhmx.cloudfront.net/acceinstitute/pages/100/attachments/original/1516388955/WallstreetLandlordsFinalReport.pdf?1516388955 [↩]
14. https://www.frbatlanta.org/-/media/documents/community-development/publications/discussion-papers/2016/04-corporate-landlords-institutional-investors-and-displacement-2016-12-21.pdf [↩]
15. https://governor.maryland.gov/covid-19-pandemic-orders-and-guidance/ [↩]
16. http://phlcouncil.com/councilmembers-gym-brooks-and-gauthier-introduce-emergency-housing-protection-package/ [↩]
17. Federal Reserve Bank of St. Louis (FRED) [↩] [↩]
18. HUD defines a cost-burdened renter household as one that pays 30% or more of income on gross rent. https://reports.nlihc.org/sites/default/files/gap/Gap-Report_2020.pd [↩]
19. National Low Income Housing Coalition’s Out of Reach Report, 2019 https://reports.nlihc.org/ [↩]
20. National Low Income Housing Coalition’s Out of Reach Report, 2019 https://reports.nlihc.org/ [↩]
21. https://www.gov.mb.ca/cca/pubs/rental_report.pdf [↩] [↩] [↩]
22. https://www.brookings.edu/research/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/ [↩] [↩]
23. https://web.stanford.edu/~diamondr/DMQ.pdf [↩] [↩] [↩] [↩] [↩] [↩]
24. Orange County FL Fiscal Year 2019 – 2020 Budget, Prologue https://www.orangecountyfl.net/Portals/0/resource%20library/open%20government/FY%202020%20Adopted%20Budget%20for%20web%20-%20CERT.pdf [↩]
25. https://www.huduser.gov/portal/publications/pdf/OrlandoFL-comp.pdf [↩]
26. https://www.orlandosentinel.com/coronavirus/jobs-economy/os-bz-coronavirus-evictions-20200526-ahksssr3qjfqfkwqwln5honmdi-story.htm [↩]
27. https://www.orlandosentinel.com/coronavirus/jobs-economy/os-bz-coronavirus-april-unemployment-20200522-p6ym37rtn5fgdcmunxryvsequm-story.html [↩]
28. https://www.federalreserve.gov/publications/2019-economic-well-being-of-us-households-in-2018-dealing-with-unexpected-expenses.htm [↩]
29. https://www.uwof.org/sites/uwof.org/files/2018%20FL%20ALICE%20REPORT%20AND%20CO%20PAGES_0.pdf [↩]
30. https://www.cdc.gov/coronavirus/2019-ncov/community/homeless-shelters/unsheltered-homelessness.html [↩]