Renters Would Feel Sales-Tax Pinch

For Sunday Lewandowski, making ends meet requires sharing a two-bedroom apartment with a roommate. Even so, the Miami Beach Senior High English teacher says about half her monthly income goes to rent.

While owners of homesteaded property may cheer the elimination of the property tax, Florida’s roughly 5.4 million renters are among those who could be hurt by a plan to raise the sales tax by 2.5 cents.

Renters make up 42 percent of households in Miami-Dade County and 31 percent in Broward County, according to the National Low Income Housing Coalition, and they were arguably among the hardest hit in the recent run-up on real estate values.

In the tri-county area, rents soared last year by 13.6 percent, as the supply of rentals plummeted because of increased demand and inventory losses to condo conversions.

Rents are expected to rise this year by 4 percent to 5 percent, said Jack McCabe, president of McCabe Research and Consulting in Deerfield Beach.

Adding to the tax burden of renters has sparked concerns among advocates for low-income people.

‘If this [proposed law] isn’t going to have an impact on rentals, but the low-income folks are going to see their sales tax go up, you are not going to accomplish the goal of helping working people hang on to the money they earn to make ends meet,’ said Abigail Vladek, a policy advocate for the Human Services Coalition of Dade County.

Lewandowski agreed, saying the bill would hurt essential professionals already priced out of the real estate market and forced to rent housing.

“If they are going to put a [2.5 cent] raise on taxes for the everyday working American like me, I’m not even going to be able to afford food or a new pair of shoes. Maybe it would be different if I was a doctor or a homeowner, but for me being a teacher?” Lewandowski said.

by: Monica Hatcher, The Miami Herald