The Orange County (Florida) Commission voted 4-3 Tuesday night to fund up to $125 million dollars from a dedicated fund to help pay for the extension of Kirkman Road to the site of the upcoming Epic Universe theme park. Universal Orlando had requested the funding, which elicited opposition from local labor and community activists.
The vote was close, but it passed, helping ensure that the Epic Universe project will be completed as planned. Universal owns the site upon which it is building its third theme park, but needed the road expansion to help people actually be able to get to the park without further clogging the area's already traffic-choked roads. (Jason Garcia this evening tweeted an excellent thread explaining the whole deal.)
The state of Florida is kicking in $16 million for the extension, and Universal is on the hook for the balance of what it has estimated could be a $305 million project. The $125 million from the county is coming from Community Redevelopment Area funds that are collected from businesses in the International Drive area, to pay for road improvements in that area. The money cannot be used for other projects in the county.
And that was the issue that stirred opposition to the funding.
Here's some relevant context. A lot of people who work in the service industry are getting sick of falling further and further behind as their pay does not keep up with the costs of housing, transportation, health care, and other costs of living. Disneyland in California just went through a raucous and very public labor negotiation as workers argued for substantial pay increases, given the high cost of living in Southern California. In Central Florida, the Orlando Sentinel has just launched a multi-part series documenting how some people working in the local tourist industry can't make ends meet.
In that context, spending $125 million on yet another new road when so many people in Orange County need affordable housing and better public transportation strikes many people as absurd. But attacking this funding proposal is like setting a mouse trap to stop the wild boar that's trashing the yard. It's going after the wrong target.
On Theme Park Insider, I advocate for consumers, hourly park employees, themed entertainment designers, and the theme park industry - in that order. Yet the local residents around theme parks include many hourly park employees, so I generally support efforts to help them, too.
But I don't buy the suggestion that paying to expand a new road to support a major new theme park means that a local government can't also pay to take care of its residents, too. Tax revenue becomes a zero sum game pretty much only when elected officials are looking for an excuse to ignore a community. Many Orlando area residents, including many park and hospitality employees, feel ignored right now. They have every right to speak up and demand a better deal from their elected officials.
That said, writing on behalf of the people who spend all this money to visit Central Florida, tourists' taxes should fund projects for tourists. Once the tourism industry is established in a community, it should not become a tax burden on local residents - tourist taxes, including sales and hotel taxes, should pay the cost of maintaining roads and public services in those areas. But money flowing from a successful local tourism industry should not exempt those area residents who are capable of paying to support local services from having to pay their fair share, too.
Florida's got a lot of problems right now that are in no way the fault of Universal Orlando or its proposal to extend a road to serve the Epic Universe project. Yes, the area needs better public transportation to serve its residents. But creating an effective mass transit system isn't so much about having the money to buy buses and pay drivers as it is having the political will to zone communities so that mass transit makes sense. If you ignore mass transit until all the roads and neighborhoods are built, your bus system never will work. Like most communities, the Greater Orlando area has shown zero interest in making anything more than a token attempt at enforcing transit-oriented zoning and development. (The irony here is that Orlando's theme parks probably have the most popular bus services in the area.)
Yes, people working at the parks in Orlando need more affordable housing, too. But if the you want that, first ban Airbnb in the community, then come talk to me. Every unit rented via Airbnb is one less unit available for housing, driving up rents for people who work and want to live in the area. Make your visitors stay in hotels or timeshares and that means more housing units - and hotel taxes - for the community. Enact an unoccupied housing tax, too, while you're at it, to help ensure that housing is used for housing instead of for parking or laundering cash. That's more cash for the community.
And if you really want to have more money available for social services and responsible urban planning in Central Florida, allow me to say three very dirty words to many Floridians: state income tax. Heck, just taxing incomes in excess of $100,000 a year could help a lot of Florida's problems go away without putting any burden on most working-class and retired Floridians.
Anyway, Universal got its money, and the Kirkman Road extension is proceeding. But the frustration that almost killed this plan is not going away. Nor should it. But if the people who live in Central Florida and work in its theme parks (as I once did) want things to change for the better, they need to set their sights much, much higher than stopping a road deal.
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More and more people are now living in manufactured home communities because of the staggering price of "starter" homes that start at $300K+. We saw one new community the other day "starting at $700,000". It's insane, but will only get worse because people seem happy to take on board mortgages that are $2000+/month and 1 bedroom apartments that fetch anything up to $1000/month. And we still have a shortage of available homes. Everywhere, and I mean everywhere, you go there are new developments appearing, and most of them are sold when the land is still dirt.
The flow of people coming to live in Orlando is never ending, and it's people who come from the states up north, that don't blink an eye at paying for a $300K starter home, because in MI et al, their starters are $400K+. We are in a never ending upward trend, and the seed is set. Until there's some kind of recession, it will continue to spiral out of control.
Road infrastructure has no chance of keeping up with it all. I4 will be OK for maybe 12 months after completion, but then it's going to be a parking lot again during the rush hours. The same will apply to the new Kirkman extension.
I love living in Orlando, but there comes a time when living out in the boonies becomes more and more of a very nice sounding option .... :)
And what makes it even worse is sadly the manufactured home communities are scams. You "buy" a house for 50 grand but then you have to pay $500-$1000 a month in rent on top of that for the privilege of living there...and then obviously since its not a real structure it goes down in value so you take it from both ends with rising rents and lower home value. We need to ban those and build real affordable housing options. I live in a beautifully maintained and landscaped neighborhood with pools and everything on prime real estate right next to MK, and my HOA is $168 a month. No industry lobby can convince me that most manufactured home communities are not scams.
I agree ..... I looked at some of 'nicer' communities and the monthly payment was outrageous, so I decided to stay in my condo. My HOA is $350/month but that's a 1/3 of the cost if I lived in one of the over 55 communities. Even the Villages is way overpriced these days.
...... and then it's goodbye to it all, if a hurricane blows through.
I bought my place in 2002, and I've seen it valued anywhere between $65K and $205K. Orlando is a crazy place to live that's for sure.
The one thing I will be thankful for when it's all done, is being able to drive along Sand Lake road with no construction. It's an absolute hell hole, and has been now for 3-4 years.
I have ZERO knowledge regarding the Orlando real estate market, but I despise the concept of artificial market manipulation by local governments. Governments should provide assistance and preferential zoning to ensure there is appropriately affordable housing for the region's workforce, but to shift financial resources (using tourist taxes to pay for affordable housing or other resident projects) and/or disrupt an open marketplace (like Airbnb) is disingenuous.
Orlando has become a victim of its own success, but it cannot bite the hand that feeds it. Levying income taxes in the state is always going to face fierce opposition, and is practically a non-starter. That means local property taxes and sales taxes are the only realistic revenue generators that can be tapped. Those avenues can only go so far to bridge the gap to make housing more affordable, so officials must be more aggressive in zoning restrictions and require developers to pay more of the tab to cover infrastructure costs to link communities and industry (as Universal has done here). Such tactics are likely to slow growth some as developers become more calculating in their plans, but officials have to resist the temptation to grow the tax base so much that they're having to play catch up over the next decade, which is how Orlando ended up where it is right now. This same scenario has played out across the country, and yet governments keep making the same mistake of taxing tourists to solve all their ills.
Very good article.
I live at the other side of the ocean, but similar 'defective politics' on local level exist here.
Housing, indeed, is a legal zoning matter (or should be). Strict regulations around zoning are needed to avoid lapse & abuse. I aggree fully with Robert around the example of AirBnb being a pest for both tourism tax income AND housing stability. In Europe, many cities are busy with a legal fight against the AirBnb's infesting "gang style" black-money business.(Same with Uber and others) YES, AirBnb is considered being a semi-maffia organisation in Europe, since about 3 years.
It's not daily news here, but monthly anyway...
(Try google translate)
https://joop.bnnvara.nl/nieuws/barcelona-legt-airbnb-aan-banden
https://www.parool.nl/nieuws/hoe-pakken-andere-steden-de-worsteling-met-airbnb-aan~b654303c/?referer=https%3A%2F%2Fwww.google.com%2F
https://www.trouw.nl/nieuws/parijs-heeft-de-oorlog-verklaard-aan-airbnb~bd4605e3/?referer=https%3A%2F%2Fwww.google.com%2F
https://www.hln.be/de-krant/drie-ambtenaren-speuren-fulltime-naar-illegale-airbnb-s~af92b8f6/
https://nl.express.live/madrid-airbnb-sluiting-toeristenflats/
(I will not present a full list of articles, as that would fill already the size of a pocket book...)
@Russell
AirBnb is not "an open marketplace". It's an organised large scale abuse on HOUSING. In almost every country, housing IS regulated as being "legal residence", which includes that all kind of taxes are low/very low on property where people actually are supposed to LIVE. Short stay = business activity, related to tourism or temporary work conditions. Businesses must conform to a full list of operational regulations and full taxing on the profits. AirBnb actually set up a 95% fraudulent system to earn money, while still paying low/very low "residence" taxes, and getting the profits disapear on black market sheme.
Maffia has MANY different activity faces. AirBnb is one of those faces...
(I'm not going to say anything about house prices, as American houses are cheap, generally speaking, compared to Europe.)
Maybe this is off topic but I have to agree that Airbnb is a huge problem in very touristy cities. Maybe Orlando should in fact follow what a lot of European cities did and outright ban them. They take so much inventory off the market and pay hardly any tax.
Getting large companies like Universal and Disney to pay more for infrastructure is a good thing but governments should also try and improve standards for everyone. I find it astonishing at how low the minimum wage in the US is compared to almost every other industrialize nation. Here in Alberta our minimum wage is $15 an hour and a quick search showed $8-9 for Florida. Even with the exchange rate that's super low!
If it wasn`t for tourism, Florida would be an economically destitute backwater with some orange trees. Just sayin`.
I just did a tour throughout Europe and AIRBNB was widely available. I don't know where the previous couple of commentators are talking about? A few small cities? However. AIRBNB in Europe did pay almost the same exact hotel room taxes (passed on to you the consumer) as you would if you were staying in a hotel. Many AIRBNB listing are in fact high density small rooms. Very efficient for packing tourists in efficient spaces. Much more efficient than the big houses that resident's live in. I have stayed in a bunch of them. The sterotype that a lot of you have about AirBNB is mostly false. Many US cities also impose almost the same tax on Airbnb as the hotel bed tax. One could make the same argument that Robert made about hotels. Hotel rooms are unoccupied approx 30 percent of the nights. Even. In orlando. Geez resident's could live there right. It is no different than AIRBNB. For the minority of listings that are large houses, they are paying just as much tax per person as the avg hotel. It's all the same percentage based on the rent per night. As to public transit. Most public transit workers and government workers in general get paid significantly more (counting pay and very generous benefits) than the average employee who is not employed by the gov't.
If the unions were not so greedy, the cost of building and running public transport would be cut 33 to 50 percent. Which could result in a lot more capacity on the lines and getting things running much more efficiently. The issue is mostly the increased costs associated with the unions.
The unions are just as out for maximum profit as any corporation. Except. Most corporations are more longsighted to play the long game and take a little bit less profit now to keep profits going long term, than the average union. Unions have largely contributed to the bankruptcy of so so so many large companies.
The only reason why the gov't GM bailout happened was because of significantly above market wages being paid for several decades and unworkable pension promises that were not realistic if the company faced any significant competition.
I just did a tour throughout Europe and AIRBNB was widely available. I don't know where the previous couple of commentators are talking about? A few small cities? However. AIRBNB in Europe did pay almost the same exact hotel room taxes (passed on to you the consumer) as you would if you were staying in a hotel. Many AIRBNB listing are in fact high density small rooms. Very efficient for packing tourists in efficient spaces. Much more efficient than the big houses that resident's live in. I have stayed in a bunch of them. The sterotype that a lot of you have about AirBNB is mostly false. Many US cities also impose almost the same tax on Airbnb as the hotel bed tax. One could make the same argument that Robert made about hotels. Hotel rooms are unoccupied approx 30 percent of the nights. Even. In orlando. Geez resident's could live there right. It is no different than AIRBNB. For the minority of listings that are large houses, they are paying just as much tax per person as the avg hotel. It's all the same percentage based on the rent per night. As to public transit. Most public transit workers and government workers in general get paid significantly more (counting pay and very generous benefits) than the average employee who is not employed by the gov't.
If the unions were not so greedy, the cost of building and running public transport would be cut 33 to 50 percent. Which could result in a lot more capacity on the lines and getting things running much more efficiently. The issue is mostly the increased costs associated with the unions.
The unions are just as out for maximum profit as any corporation. Except. Most corporations are more longsighted to play the long game and take a little bit less profit now to keep profits going long term, than the average union. Unions have largely contributed to the bankruptcy of so so so many large companies.
The only reason why the gov't GM bailout happened was because of significantly above market wages being paid for several decades and unworkable pension promises that were not realistic if the company faced any significant competition.
You must be from the north lol. Overly generous government union salaries/pensions isn't nearly as prominent in the south where people are much more conservative and prefer low taxes. Orange County and Orlando government workers don't make squat, many of the jobs didn't raise wages above $10/hour until Disney did. I have a friend in Tampa whose an elementary school teacher and makes 31 grand ($15 an hour for a 40 hour workweek).
Although I do agree with you GM employees for a long time were over paid and the UAW kept causing issues and pushing for higher and higher pay. Auto industry people I know have told me some crazy stories about GM factories back in the 80's in chaos with no rules, the UAW stewards would encourage workers to purposely screw up the cars to stick it to management.
...although the execs weren't exactly model citizens either leaving at noon all the time, getting huge bonuses for no reason, alcohol, etc...(those kind of stories also came to me straight from the source lol).
Come to England and see real housing cost issues then compare what you get for $300K v an average apartment in southern England. I won't even talk about London. Everything is relative.
4-bed villa with swimming pool on US27 v Celebration....??
There is still good value for money if you want to be 10-20 miles out.
@Herwig - I don't know much about Airbnb or property taxes in Europe, but in most US jurisdictions, real estate is taxed at a very high level (I pay over 1% on my home's assessed value EVERY SINGLE YEAR, which is on the low side compared to jurisdictions closer to the city). The issue with Airbnb is not with the service, it's with how users categorize their properties with local jurisdictions. In most places in the US, "vacation" or "second home" properties are taxed at a significantly higher value than your primary residence (usually 1.5% or higher). Rental properties are taxed at an even higher level with additional tax applied to income generated from rental properties (mostly because the US government takes a cut of the income). Most places require property owners to verify that they physically lived in their primary residence for a certain percentage of the year to avoid people from turning urban dwellings into rental units and paying the appropriate taxes. However, very few locales have the resources to assess properties that have been modified to split a structure initially categorized as a single family home into multiple dwellings to tax the square footage of the income property separately from the primary residence. If you want to complain about the principles of Airbnb, that's where you could have a gripe, but ultimately the issues lie with the jurisdictions, and not the service. Airbnb is very efficient, and when users are honest and don't try to skirt the law, all appropriate taxes are paid. The service itself should not be blamed when scofflaws attempt to skirt the law (people were claiming vacation homes as permanent residences long before Airbnb came around), and if local governments and the hotel industry feel that Airbnb users are not properly categorizing their properties, then they need to allocate more resources to ensure that appropriate taxes are being collected.
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One important thing to note is that all of the complaining that the unions have been leading actually did kind of work - everyone knew the road was going to get approved but the day before the vote Universal got nervous and announced they are donating some of their land for 1,000 units of affordable housing. Considering commissioners the vote was 4-3 I think it's clear Universal was feeling some heat.
The affordable housing crises in Central Florida definitely is a thing and needs to be addressed as a crisis. Just 15 years ago Orlando was known as a relatively affordable place to live and now its known as one of the most unaffordable, the booming economy mixed with the massive amounts of people moving in from Puerto Rico and the Northeast US has completely overwhelmed our housing, government services, and roads. This is of course not a new problem for Orlando it's been going on ever since WDW was built, and the economy was so bad from 2008-2014 that people were just happy to have a job, but now that housing has become so unaffordable and traffic is so bad it's like the a stewing pot that has finally boiled over. If I bought my house 10 years ago it would've been like $200,000, I bought it last year for $280 and now its worth $300. You can't beat the supply and demand curve, like Robert said we didn't zone properly decades ago and we're paying for it now.
Disney and Universal have become easy scapegoat but they are not the problem (especially Disney now which pays their employees entire college tuition and actually pays relatively well). The people in our community need to come together and say stop with the $300,000 single family homes and luxury apartments dotted all over the place and zone for density & public transport. Pretty much all throughout the USA and Canada we have had such an economically inefficient way of living for decades and now that our cities have become unaffordable for most people are starting to wake up and realize we need to get our act together. I've always been conservative and even I support Mayor Demmings 1 cent tax to improve public transportation our community needs it (Florida will never have a state income tax though that's considered heresy to even bring that up lol).