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Economist Sean Snaith says Florida PACE helps homeowners stuck between a rock and hard place

Man repairs roof

Gov. Ron DeSantis’ proposed budget for the 2024-2025 fiscal year includes a one year exemption on taxes, fees, and assessments for homeowners insurance policies.

He says that will save taxpayers more than $400 million and decrease the average insurance premium by up to six percent.

If lawmakers don’t accept that recommendation for next year’s budget when they meet for the regular legislative session in January, some homeowners may have to turn to the Florida PACE program to help lower their rates.

Sean Snaith (left), Institute for Economic Forecasting Director at the University of Central Florida, speaks with Mike Moran (right), Executive Director of the Florida PACE Funding Agency, about the program's economic impact.
Talia Blake
Sean Snaith (left), Institute for Economic Forecasting Director at the University of Central Florida, speaks with Mike Moran (right), Executive Director of the Florida PACE Funding Agency, about the program's economic impact.

Pacing through the problem

2024 is almost here and Floridians will continue to deal with high property insurance rates in the coming new year.

However, they could help lower their costs through the Florida PACE program, which gives commercial and residential property owners financial options for energy efficient and hurricane resistant home improvements.

According to their website, Florida PACE is an interlocal agreement established under state law that oversees program administrators who work with homeowners to finance their projects.

Since January 1, 2023 Florida PACE has received more than 16,000 applications requesting financing, according to
Mike Moran, Executive Director at the Florida PACE Funding Agency.

He said most applications coming in are for improvements to roofs, windows, doors, and air conditioners. "With the roofs, it has just been kind of a spike in that, and I'm speculating it's related to the insurance marketplace in Florida," he said.

Sean Snaith, University of Central Florida’s Institute for Economic Forecasting Director, released a report on the PACE program’s economic impact.

He said projects financed through the program have generated over $1.1 billion in spending in the state economy.

Some Floridians are having their home insurance policies canceled because they have not put hardening measures in place, like updating their roof to be up to underwriting standards. "This program becomes a lender of last resort in many instances, that in absence of it, these people are really in between a rock and a hard place," said Snaith.

The PACE program offers financial assistance for people who don't have the means to pay for the cost of home improvements through credit cards or a home equity line of credit, according to Mike Moran. "There's no money down. There's no credit checks. These are fixed payments at a fixed interest rate for a fixed period of time," he said.

Those long-term, fixed rate assessments are added to your property bill taxes, which Moran said currently sits at 9%.

Falling through the gaps

Florida PACE funding can only be used toward hurricane hardening or energy efficient improvements.

Snaith said that means the money can't be used toward improvements like raising your home off the ground if you're in a flood prone area.

"Raising the property to mitigate any damage could help them both in terms of being able to get insurance and certainly affect what premiums they might charge," he said. "There are other things related to sort of converting from septic to sewage."

Mike Moran agrees and hopes the Florida Legislature will make changes during the 2024 legislative session to allow PACE funding for improvements like converting septic to sewer.

"What happens is, you'll have a local municipality, they'll put the sewer line up the middle of the street, but it's the responsibility for the property owner to actually connect to that public sewer line, which can be expensive. It can be easily $20,000. But that is not a qualifying improvement that we're allowed to finance," said Moran.

He explains that Florida PACE funding agency exists for a "compelling state interest" and converting septic to sewer is a good example that. "It's an easy fit for us simply because there's just a public purpose, compelling state interest for water quality, and it fits our model should be able to finance it but again, we just would need to change legislation to make that happen."

After a brief stint as Morning Edition Producer at The Public’s Radio in in Rhode Island, Talia Blake returned to WMFE, the station that grew her love for public radio. She graduated with a double-major in Broadcast Journalism and Psychology from the University of Central Florida (Go Knights!). While at UCF, she was an intern for WMFE’s public affairs show, Intersection. In her spare time, Talia is an avid foodie and enjoys working out.
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