Setting the PACE: New legislation makes a good thing better

When was the last time you heard of a business coalition siding with local government entities pushing for tighter regulations on that business’s industry?

That’s exactly what happened with SB 770, which Gov. Ron DeSantis signed into law last week.

SB 770 improves the “Property Assessed Clean Energy” program, commonly known as PACE. In short, PACE allows property owners to obtain financing for crucial home improvements without putting those costs on a credit card or accessing other similarly high-cost options.

These homeowners may not be able to obtain bank financing or have sufficient savings to pay cash for the necessary improvements. But, through PACE, they have access to financing rather than paying astronomical credit card rates. PACE finance payments are made through property tax assessments.

The new legislation — supported by a coalition of local government entities and PACE financing providers — includes important program expansions. Namely:

— It will help improve Florida water quality by authorizing participating local governments to allow homeowners to use PACE for septic-to-sewer conversions, which will help protect Florida’s precious springs and drinking water sources. According to a bill analysis by legislative staff, an estimated 2.3 million septic systems are in operation in Florida, many of which are at risk of leaching into the state’s water table and estuaries.

— It allows PACE financing to harden sea walls and cover other flood mitigation projects. As recent flooding in South Florida illustrates, this is a key issue for many Florida residents.

— It increases PACE’s vital role in lowering insurance premiums. As Florida’s homeowners’ insurance crisis continues and has led to multiple special sessions and intense focus from DeSantis, a University of South Florida study estimates that PACE home improvements have amounted to well over $1 billion in insurance premium savings.

Meanwhile, PACE will continue to drive employment, particularly among tradespeople.

More than 30,000 jobs have been created by PACE financing in Florida to date. PACE supports local home improvement contractors, roofers and suppliers who keep the Florida economy moving while doing important work to protect and improve people’s homes. To date, nearly 130,000 PACE projects have been completed around the state for a total economic impact of $3 billion.

Finally, the legislation provides important new consumer protections — which PACE financing companies support — to make sure homeowners benefit fully from the program. Those include:

— Reducing the maximum term of financing from 30 to 20 years.

— Adding an income test to make sure the financing fits within the borrower’s budget

— Clarifying that no single loan can exceed 20 % of the home’s value.

— Adding stronger requirements for contractors.

— Giving homeowners three days to change their minds about PACE financing.

Now, there is a terrific opportunity for local governments and financing providers to come together and reinvigorate this new, better program — helping Floridians make their homes safer, all while bringing down the property tax bills.

You may have read about current litigation involving PACE. Many hope that this legislation will lead to a spirit of cooperation, which will allow this crucial program for Florida homeowners to grow, with the concerns of local governments addressed.