Win, win, win, win: Major new study shows PACE program helps … well, everything

Roofer worker in special protective work wear and gloves, installing asphalt or bitumen shingle on top of the new roof under construction residential building
Florida's PACE program improves just about anything it touches.

It’s not often that you find a state program that enjoys bipartisan support and helps homeowners, private sector lenders, local governments, and the environment.

But a major new independent study finds that Florida’s PACE program is good for virtually all the stakeholder groups it touches. The study — the first of its kind on the PACE program — was conducted by researchers at Yale University, the University of North Carolina at Chapel Hill, and two international higher educational partners.

The report is particularly impactful as Florida sits in the heart of hurricane season with a potential storm looming.

Florida’s PACE program was started in 2010 and has helped thousands of Floridians finance hurricane-hardening home improvements without resorting to credit card debt.

The Yale/UNC study finds that PACE also accomplishes the following:

— Increases the home values of homeowners who utilize it

— Helps lenders, as higher house prices increase collateral recovery values

— Brings more revenue to local governments by expanding the property tax base

A bill updating PACE was passed overwhelmingly by both houses of the Legislature in the last Session, signed by the Governor, and the program has been affirmed multiple times by a circuit court judge.

The Yale/UNC study is the first micro-level research into estimating how housing and mortgage markets respond to PACE programs.

“We show that PACE loans reduce homeowners’ financial constraints without crowding out for-purchase or refinancing mortgages while providing net fiscal benefits to local governments,” the study said.

Dr. Cameron LaPoint, assistant professor of finance at the Yale School of Management and co-author of the study, said PACE “democratizes access to credit” without forcing homeowners to rely on high-rate credit cards.

The study was completely independent and funded by the Yale International Center for Finance and the Yale Tobin Center for Economic Policy. Researchers analyzed 16,000 Florida PACE loans and then created a database of detailed microdata examining housing transactions, loans, building permits, tax delinquency, and other liens.

While the Yale/UNC study didn’t research other variables, the environmental benefits of PACE are clear and were expanded in the latest legislation, which allows homeowners to use PACE for septic-to-sewer conversions. This is important because, 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.

And if that’s not enough, PACE also plays a huge role in lowering insurance premiums. A University of South Florida study estimated that PACE home improvements have amounted to well over $1 billion in insurance premium savings. Finally, the PACE program is also vital to local tradespeople, such as roofers, who perform these essential home improvements and help maintain employment for many Floridians.

Last year’s new legislation included key new provisions that protect consumers, including reducing the maximum term of financing from 30 to 20 years, adding an income test, requiring that only 20% or less of the home’s value can be financed, and requiring applicants to have a phone call to discuss financing terms and program details.

Peter Schorsch

Peter Schorsch is the President of Extensive Enterprises Media and is the publisher of FloridaPolitics.com, INFLUENCE Magazine, and Sunburn, the morning read of what’s hot in Florida politics. Previous to his publishing efforts, Peter was a political consultant to dozens of congressional and state campaigns, as well as several of the state’s largest governmental affairs and public relations firms. Peter lives in St. Petersburg with his wife, Michelle, and their daughter, Ella. Follow Peter on Twitter @PeterSchorschFL.


5 comments

  • "E" [FKA ELVIS - FKA EARL]

    September 23, 2024 at 7:25 pm

    We thank Ron & Casey for our Sage PACE Program. Its stuff like this that will serve our Great Nation well when we elect Ron in 2028 as our Sage POTUS.
    Thanks again,
    “E”

    • rick whitaker

      September 23, 2024 at 9:31 pm

      EARL SHITTS, a real man knows how to vote for a good woman, earl, i guess you’re fuked huh

    • Billy Rotberg

      September 24, 2024 at 11:32 am

      I’m not fan of PACE as it is predatory lending. Desantis referred to permitless concealed carry as “Constitutional carry” which is not correct. It would need to include open carry. Still, Desantis is much better than Christ or that Gillum character caught in a hotel room with a male escort.

  • Old news

    September 24, 2024 at 9:38 am

    Pace for elderly to make or keep the value up otherwise nothing they can do for you unless you have green.

  • Billy Rotberg

    September 24, 2024 at 11:24 am

    It’s only good as a last resort. PACE will tack the cost of your home project onto your property taxes over 30 years so you end up paying 3 times what the project costs. I looked into it and decided against it.

Comments are closed.


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