Jacksonville, Florida, is navigating a complex interplay of economic development incentives and real estate market trends. As the city seeks to stimulate growth and address housing challenges, a careful balance must be struck between these often-competing forces. While the public is mainly uninvolved, the financial incentives driving investment capital, developers, and construction firms to keep projects moving are clear. According to Redfin, Jacksonville has the third worst rate of pending home sales in the nation.

Government Incentives: A Double-Edged Sword Government incentives, while intended to spur economic activity, can have unintended consequences that might result in a net negative for the taxpayers footing the bill. 

Key Incentives and Partnerships:

1. City of Jacksonville:

   • Recapture Enhanced Value (REV) Grant: This program reimburses a portion of increased property taxes generated by new development.   

   • Industrial Revenue Bonds (IRBs): These bonds allow businesses to finance capital projects at a lower interest rate.   

   • Quick Action Closing Fund: This fund provides expedited permitting and regulatory approvals for qualifying projects.

   • Florida Flex Grant Program reimburses training costs for new and expanding businesses.  

   • Tax Increment Districts (TIDs): TIDs capture increased property tax revenue from redevelopment areas to fund public improvements.  

2. State of Florida:

   • Capital Investment Tax Credit (CITC): This credit offers tax breaks for businesses that invest in capital projects and create jobs.   

   • High-Impact Performance Incentive (HIPI) Grant: This grant provides performance-based incentives to businesses that create high-wage jobs.   

   • Qualified Target Industry (QTI) Tax Refund: This program offers tax refunds to businesses in targeted industries.  

3. JAXUSA Partnership:

   • Economic Development Incentives: JAXUSA, the economic development arm of the Jacksonville Chamber of Commerce, works with businesses to identify and secure available incentives.   

   • Public-Private Partnerships: JAXUSA facilitates partnerships between the public and private sectors to fund infrastructure projects and support economic development initiatives.   

Do a Google search for “vacant office building space,” and all of the top news stories provided will focus on converting them to housing. That's the talk of the developers that's picked up by the media and trumpeted as the solution. Yet, high office building vacancies result from overbuilding and remote work, eliminating the need for a behemoth office with all the associated expenses. Meanwhile, more are being built. Many of the same interests that overbuilt commercial office space now wield their monied influence over the housing market, building new office buildings while converting others. While conversions can contribute to urban revitalization and create higher-density housing stock, they can also contribute to higher vacancy rates. Supply has to match the affordable demand. 

Workforce housing in Jacksonville typically refers to homes affordable to individuals and families whose incomes are below the median but above the qualifications for traditional affordable housing. The city does not require builders of private homes or converted office buildings to allocate a percentage of units for workforce housing. Consequently, the private sector can choose whether or not to utilize available incentives and partnerships. If their development interests are best served by only building luxury units, that's their right, even if it contributes to low occupancy rates. City incentives for new construction and conversions should only be extended at taxpayer expense when workforce new construction is prioritized.