‘Good news’ for Cape taxpayers?
Cape Coral’s growth train is a triple engine express running on parallel tracks.
In terms of population, people are moving here in droves with a released-this-week study by Porch.com placing Cape Coral in the No. 5 spot for midsized cities showing increases.
Cape Coral, coming in behind Frisco, Texas; McKinney, Texas; Murfreesboro, Tennessee; and Irvine, California grew in population by nearly 30 percent — 29.88, to be exact — between 2010 and 2020, according to its analysis of U.S. Census data.
The housing market is hotter than ever — hotter than the late, great housing boom of the early 2000s. In terms of residential sales, Realtors are reporting the lowest “inventory” in years because sellers are receiving multiple offers on homes that often sell in just a day or two of listing.
Finally, overall property valuation saw another big bump with the Lee County Property Appraiser reporting an increase of taxable valuation jumping 10.88 percent year-over-year in the Cape.
Total taxable valuation of Cape Coral properties rose to $18,382,969,754 — a value change of $1,804,213,873, with $616,594,782 of that from new construction, according to the still-preliminary tax roll values released by the office.
On the economic front, most will say this is good news.
Good news because pandemic predictions related to the economy did not hold true in the housing market.
Good news because real estate and construction are economic drivers in Southwest Florida and, with the service industry taking such a hard, hard hit, this growth provided some economic stability.
Good news because increased housing prices mean an increase in taxable property valuation which means, according to taxing entities everywhere, “extra money” to fund services and the positions and projects needed to do that.
And in that way of thinking, taxing bodies can do that without “raising taxes,” i.e., keeping the property rate the same while budgeting the additional tax money received due to the difference between last year’s total taxable valuation and this year’s.
Among administrative staff and the elected boards of cities, districts, counties and the like, it’s pretty common thinking.
These, however, are not common times.
First, the run-up of housing prices in the last few years — and the last year in particular — is likely unsustainable long term.
While market experts point out the differences between the last shooting star market and this one — fewer flippers, more cash investment — and don’t see another crash, they are pointing out that a leveling is likely.
For taxing bodies, on the practical side, that means, or should mean anyway, a cautious approach to allocating “extra” property tax dollars for non-urgent, multi-year “wants.”
For taxing bodies, on the human impact side, that means, or should mean, a recognition that while the housing market is booming due largely to demand from people moving here, many current residents have not fared well through the last year.
As stated earlier, the service industry was slammed with closures, reduced capacity mandates, layoffs and more, as were retail and hospitality related businesses and their employees. Small businesses, and those who work for them, were especially hard hit.
Southwest Floridans have spent less because we have had less, some of us a lot less.
The reality is property owners, be they commercial or residential taxpayers, are looking at a tax increase at the current millage rate.
City Manager Rob Hernandez is expected to release his proposed city budget to the Cape Coral City Council early next week.
It will be interesting to see his approach to budgeting, or not, these “extra” funds in light of the pandemic’s impact on many of the city’s businesses and residents.
Of special interest will be a tax “rollback” scenario and how two of Cape Coral’s other General Fund taxes play into the millage rate recommended.
Lest we forget, the city imposed two new taxes — excuse us, an assessment and a tax — to “reduce the city’s reliance on property taxes.”
Those taxes are a fire services assessment to offset the cost of Cape Coral Fire Department operations as well as a public service tax, a 7 percent levy added to electric bills in addition to the city’s 3 percent franchise fee.
This money goes into the same coffer as property tax revenue, the city’s General Fund, and was intended, ahem, to spread the burden largely borne by residential property owners to a broader base.
Yes, it will be interesting to see how that all works out now that valuations are booming to record highs.
We await this year’s budget proposal and Council’s reaction, as they begin the budget process following their summer hiatus.