Street Economics

Panama City, Florida

HJR 1 Homestead-Exemption Tax-Base Exposure

Bay County . 2025 final assessment roll

Snapshot

The Panama City read

Panama City fits the Balanced / Diversified archetype: a genuine mix of residential, commercial, and other uses with no single category overwhelming the base, which is the healthiest profile a Florida city can carry into this amendment.

At full phase-in in 2028, 23.0% of the city’s non-school taxable base is exposed to the larger homestead exemption, with a 15.3% step at the 2027 threshold. The residential share takes a hit, but the commercial and rental base cushions it, which is exactly what a diversified composition is supposed to do. Among ranked Florida cities, Panama City sits at 199 of 404 by exposure, placing it in the middle of the statewide distribution.

Of 17,725 residential housing units, 41.6% are owner-occupied, 18.9% are owned by out-of-state owners, and 39.5% are non-homestead but Florida-owned. That 39.5% Florida-owned non-homestead share is a meaningful signal: the city’s rental market is largely a local-ownership story, not an absentee-ownership story, which means the economic relationships between landlords and the community are more likely to be durable.

Land-use composition

Share of taxable value by category, Panama City, 2025 roll:

Condo coverage for Bay County is still being finalized, so composition percentages and the exposure figure may shift slightly once that data recovery validates.

What the exposure band means

Moderate exposure. A meaningful but absorbable hit. The place has some non-homestead base to lean on. Mitigation is about steering future growth, not emergency response.

Looking ahead

Neither of the following changes the exposure figure above; both shape how Panama City grows its base after the amendment takes effect.

First, beginning January 1, 2027, the annual assessment-increase cap on non-homestead property drops from 10% to 5%, covering commercial and industrial real property and small residential rentals of nine units or fewer. Because a capped property’s assessed value can rise only 5% per year, the main engine of base growth in these categories shifts to transactions: a sale or change of control resets the property to market value. Transaction velocity in the commercial, industrial, and rental segments will matter more to Panama City’s non-homestead base than it did under the old cap.

Second, new Florida residents who did not maintain a Florida permanent residence as of December 31, 2026 phase into the larger exemption over five years rather than receiving it immediately. This ramp cannot be read from the assessment roll, so the 23.0% and 15.3% figures above assume full application of the exemption to every qualifying homestead. Near-term exposure could run slightly lower than modeled in years where a meaningful share of new homesteaders are still inside their five-year window.

Where the opportunity is

These recommendations are based solely on the tax roll’s land-use composition. They do not account for whether local land development regulations and zoning permit the uses described, whether there is local obstruction, or the political dynamics that typically decide what actually gets approved. This is a starting point for a conversation, not a development plan.

• Panama City’s diversified base is its primary asset going into this amendment, and the first mitigation priority is to maintain that balance deliberately rather than letting it erode by default. The cushion the city has today exists because commercial and rental uses have kept pace with residential growth; every future approval that tilts the mix back toward owner-occupied residential quietly narrows that cushion.
• The second move is to use the diversified base as an active economic-development signal. A city that can absorb a significant homestead exemption expansion without a services crisis is a more predictable operating environment for businesses and investors than one facing emergency millage adjustments. That stability is a recruiting advantage and should be framed as one.
• The third move is to identify which non-homestead category is thinnest and target the next increment of growth there. Industrial at 3.7% of value and multifamily at 8.5% are the two categories with room to grow without disrupting the existing balance. The out-of-state ownership data in the composition table shows that outside investors are already active in both categories by value, which suggests market interest exists; the question is whether local land-use decisions are channeling that interest productively.
• The fourth move is to steer commercial, rental, and industrial growth into established corridors and the commercial core, where new investment reinforces the diversified base rather than scattering it across the city in ways that are harder to service efficiently.

Watch-out: diversification erodes quietly if every approval is another subdivision. Panama City should carry an explicit composition target, not just a general preference for balance, so that the cushion the current roll shows is a managed outcome rather than a lucky one.

Source and scope

All figures are drawn from the Florida Department of Revenue 2025 final assessment roll, the most recent certified roll in the state’s possession. The roll is used here as a structural proxy for tax-base composition, not as a dollar forecast for any specific budget year. HJR 1 / CS-HJR 1F is on the November 2026 ballot; the 2026 roll is the assessment roll in place when voters decide. If the amendment passes, the first roll affected is the 2027 roll at the $150,000 step, followed by the 2028 roll at the full $250,000 phase-in. When the 2026 and later rolls are certified, the analysis re-runs on the new data.

Ownership shares are measured on a residential-unit basis: each homestead-eligible parcel counts as one unit and each multifamily parcel counts by its number of apartment units. The out-of-state ownership figure is a mailing-address proxy; it undercounts true outside ownership because an out-of-state investor using an in-state LLC mailing address counts as Florida-owned, and it does not prove where any individual owner actually lives. This is a land-use-composition starting point, not a full fiscal, economic, or legal analysis.

Place: Panama City. Florida