At a Greater Tampa Bay Chamber of Commerce event last month, Governor Crist asked when Florida real estate had last been such a bargain. “My friends up north are buying in Singer Island and Treasure Island,” he said. “Be hopeful.”
The current governor has given Florida residents as much reason as he can to be hopeful, pushing changes to the state’s property taxes and rolling back the tax rolls by billions of dollars. Speaking at a Real Estate Roundtable session the same month in Tallahassee, Crist told realtors, “It doesn’t get much better than this. Prices have gotten as low as they can. Now is the time to buy, while the deals exist.”
Crist’s political career is at a similar stage — Senator Mel Martinez’s decision not to run for re-election has left open what appears to be a political bargain — a can’t-miss senate race that pits a popular governor against a field of two lesser-known legislators (although Crist won’t face just token opposition in the Republican primary).
Now that Crist has announced his plans to jockey for a seat in the U.S. Senate, it’s a question whether his rosy-eyed rhetoric on real estate has been matched by actions finding buyers for the bargains he so frequently touts, and what impact his departure will have on a state devastated by its real estate market.
“I don’t know that [his departure] is going to impact real estate in Florida. A lot of things have to happen for real estate in Florida to recover,” said Florida Senator Evelyn Lynn, Republican of Ormond Beach, a member of the senate’s commerce committee. “I think that Governor Crist has done anything and everything possible to get the economy moving again.”
Lynn sponsored a new proposed constitutional amendment, which would give a property tax break to first time homebuyers, on the 2010 ballot, requiring a 60 percent vote. It was approved by the legislature earlier this month. Property tax proposals have formed the core of Crist’s real estate policy in Tallahassee.
“I think the governor has become very much aware of the fact that without having the real estate market back on track, our economy isn’t going to recover—that’s an integral part of our total economy in Florida,” she said.
Crist spearheaded a constitutional amendment referendum to reduce property taxes by $10 billion in January of last year. This followed the Florida legislature’s passing a $15 billion rollback in 2007, dubbed the largest in the state’s history.
Last year’s amendment, in addition to the claimed $10 billion cut, allowed portability of the Save Our Homes tax benefit, which limits annual increases to assessments at 3 percent on those with a 25,000 homestead exemption, that is, primary residences. The portability component allowed transfer of up to $500,000 of the assessment cap to a new property if the owner moved. The homestead exemption is not available to secondary and investment homeowners.
But even a pro-development politician can’t give a flagging market a boost in values.
“I don’t think he actively was an advocate one way or another,” said Gwen Margolis, a former president of the Florida senate, former county commissioner for Miami-Dade County and longtime real estate investor who left the legislature in 2008. “I don’t know what his position was — he was very concerned with the devaluation of properties, but I can’t tell you that there was any result during the session that would have changed things.”
While it’s not clear whether these tax cuts have driven sales, several of the more distressed areas of the state have seen large increases in sales of single-family homes, according to the Florida Association of Realtors.
In Fort Lauderdale, for example, the first quarter of 2009 saw a 46 percent increase over the same period in 2008. Fort Myers-Cape Coral saw a 141 percent change.
But for some, Crist’s substantive record on real estate has consisted of nominal property tax cuts and little else, says Jack McCabe, a real estate analyst in Deerfield Beach.
“The governor to me really has not done anything that you would consider positive towards helping the real estate market. The property tax cuts have been because valuations have dropped so drastically — our real estate market in Florida is one of the most devastated in the country. It’s a touchy subject, but I have not seen Governor Crist strongly come out for anything that would have been of great benefit to the Florida real estate market in his tenure.” McCabe also said that the current property tax system, including Save Our Homes, creates disparities in liability, even between adjacent homes on the same street, depending on the status of the owner.
Former speaker of the Florida house Marco Rubio, who will likely be his chief opposition in the Republican primary, had actually proposed doing away with the property tax and instituting a higher sales tax in its place. Rubio, an attorney in Miami, announced his candidacy for Senate last week.
As for the Governor’s office, two candidates loom large: State Attorney General Bill McCollum, a Republican, and Chief Financial Officer Alex Sink, a Democrat, have been tapped as likely successors in the State Capitol, but that could change by the summer.
“What we’re seeing now is the money primary,” said Christopher Mann, associate professor of political science at the University of Miami. “I think you have announced candidates for the “money” primary who many not be the candidates come the primary next year. There may be people who jump in late because they don’t have to play because they have the ability to self-finance — a member of the U.S. House, for instance, who can transfer campaign funds who doesn’t need to play this early, or wait for someone to stumble.”
As for the Senate race, Mann said Rubio could be a dark-horse candidate, depending on the state of the economy. “Rubio could be the Obama against Charlie Crist,” he said. “The people who vote in the Republican primary are not Charlie Crist’s biggest supporters.” If the economy remains stagnant or suffers more, “he will be held accountable for state of economy, and that could play out to Rubio’s benefit.
Mann said McCollum and Sink do have an advantage in that they have been through the campaign grind before. “There are unlikely to be skeletons in their closets that will cause them to drop out. But it’s a tough economy, it’s a lot of money to raise, and whether these folks can prove themselves out, we’ve seen lots of people who have supposed to be the nominee fizzle.”