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Mayor Donna Deegan praised City Council’s approval Tuesday of legislation that opens the way for a lawsuit against Florida PACE Funding Agency to stop it from financing home improvements on residential property without the city’s authorization.
“I want to thank Council President [Ron] Salem and the entire City Council for swiftly and unanimously passing this important legislation that will save citizens from financial ruin,” Deegan said after the council unanimously approved Salem’s bill. “I urge everyone in Jacksonville to tell their neighbors about these predatory loans so that another family isn’t hurt by this damaging practice.”
Florida PACE Funding Agency is a special government district authorized by state law to provide financing for the installation of improvements that will make buildings more energy-efficient and resistant to hurricane-force winds.
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Property owners who enter into the financing contracts will pay assessments on their annual property tax bills. The interest rate for the financing has been as high as 10.49% for agreements in Duval County and the payoff period can be as long as 30 years, depending on the type of improvement.
The voluntary financing option offers interest rates that are lower than what it would cost property owners to put the tab on their credit cards, and the state benefits from reductions in greenhouse gas emissions and hardening of buildings against storm damage, according to Florida PACE.
If property owners fail to pay the assessments, they risk losing their homes to tax auctions. The legislation approved unanimously by City Council says the continued operation of that program without city regulation is a “public health, safety and welfare emergency.”
“Florida PACE operates a business preying on our residents,” Salem said after the council supported the legislation.
The city authorized such financing through tax bill assessments in 2021 for commercial property owners but not for residential property. Florida PACE Funding Agency entered into the residential market in Duval County this year and about 85% of the financing has been to homeowners who occupy the buildings as their homesteads, according to a Times-Union review of assessment notices filed at the county courthouse.
Florida PACE says a court order in 2022 authorizes the assessments in every Florida county for all kinds of property.
Salem introduced the legislation after meeting with attorneys from Jacksonville Area Legal Aid and the city’s Office of General Counsel.
“We are thrilled to see the city, under the leadership of Mayor Deegan and City Council President Salem, pave the way in helping protect our friends and neighbors from these loans, which have destabilized so many other cities across the country,” Jacksonville Area Legal Aid President Jim Kowalksi said in a statement released by the city.
Florida PACE is one of four special districts operating in Florida that provide such financing for property owners. Florida PACE is the only one of those districts that has taken the position it can operate statewide without needing authorization from local governments.
Florida PACE is the only one of those special districts that provides such financing to residential property owners in Duval County. Other special districts offer financing for residential property owners in locations where local governments have opted in to the program.
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