Don't worry it's just your money!

Throughout this blog, I have always advocated for thrift and good management of taxpayers' dollars by our cities, counties and the state of Florida.

As a real estate agent, I observe every day how excessive taxation has a major effect on home-ownership. At about 2% per year on the value of your home, added to Florida high insurance premiums, (as well as out-of-control condominium fees) it is an overwhelming factor that often discourages buyers.

Property Taxes and routine expenses are often higher than the basic monthly payment of the related mortgage loan.

The generosity with which taxpayers' dollars are spent with no other consideration than "if it's there we must get it", is far out of the traditional values of thrift and austerity that should be the norm in times of recession, hardship, and high unemployment.

The same criteria we follow in our home budgets should be applied by our city commissioners.

They can’t just spend and seek the revenue later. Because most possibly, you and me will be stuck with the bill.

I heard that a former manager of Hallandale Beach, who was making an outrageous salary, (and doing a pretty bad job), was fired at an usually high cost to the city.

The present interim manager assumed his functions just a few months ago.

He will possibly get a bonus of $15,000.

Why is it that the city had to consider this bonus request so soon?

Do you ask your boss for a raise two or three months after you were hired?

Trust me, I hate getting involved in local politics. I would just like to see less pomp and circumstance, less meetings and bureaucracy, less formalities, forms, regulations, and a more down-to-earth management of citizens' money.

Our elected officers should start understanding that they have a mandate to gradually reduce their cities' budgets, because they are inflated and unaffordable.

In South Florida, we are famous for our dozens of municipalities all along the coast, each with its commissioners, offices, firemen, water departments, police departments, and miscellaneous levels of managers, technocrats, and bureaucrats.

While this proliferation of local governments could, in some people's minds, be an advantage of de-centralized government, don’t you think that we can't afford it anymore? Is this really a good idea?

I'd like to hear some comments.

I read this on August 9th, in The Miami Herald:

HALLANDALE BEACH

IS MONEY NO OBJECT HERE?

You would think city commissioners and Mayor J.C. would know better by now. In 2007 the commission and the Mayor gave themselves a whopping $55,000 pay raise without bothering to notify the public first.

As a result, a hailstorm of outrage from local residents rained down on City Hall, and the chastised officials rescinded the raises.

But now city officials are up to the same old game: Hastily and secretly spending taxpayers' money like it grows on trees. First, they were so desperate to get rid of former City Manager Mike Good that they agreed to pay him an overly generous severance package worth $366,653 in total.

Now, the mayor and commission majority want to reward interim City Manager Mark Antonio with a $15,000 bonus on top of his $145,000 annual salary. And, if it hadn't been for Commissioner Keith London, they would have signed the bonus check without benefit of public notice or input.

The talk of a bonus for Mr. Antonio came at the end of long budget workshop session that lasted past midnight last week. Residents had left, and while a video camera was recording the session, the broadcast of the meeting had gone off the air.

The commission turned to an evaluation of Mr. Antonio and generally praised his work. That prompted the interim manager to ask for a $25,000 bonus. Mayor Cooper countered with an offer of $10,000.

Eventually the $15,000 figure was negotiated.

That's when Mr. London blew the whistle for a timeout, saying a vote on the award of the bonus should happen in a public meeting for residents to observe and comment on.

So, eager for some reason to ensure that Mr. Antonio gets his bonus sooner rather than later, the commission set a special meeting for 6 p.m. Monday at City Hall for the bonus vote.

Mysteriously, they just couldn't wait for the next scheduled commission meeting.

Commissioners and Mayor Cooper had better be prepared to justify why Mr. Antonio deserves a bonus simply for doing what he was hired to do.

And to explain why they're so willing to be fast and loose with taxpayers' dollars. 

Henry B. Nathan is a Realtor at United Realty Group Inc.

Visit my websites:

Condo-southflorida.com

GoldenIsles-homes.com

Golden-Beach-Homes.com

The Beach Club Condos

Bella Mare Condos in Aventura

BELLA MARE is one of my favorite condominium buildings in Aventura.

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All units have east and west views, and no hallways. Private elevator to each unit’s foyer.

You should visit the Bella Mare just for the experience.

Amenities include:

Marina

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Business Center

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Front Desk

Playground

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Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos, Sunny Isles Condos,

Hallandale Beach Blues - 2010

The City of Hallandale is having a nasty dispute, that can be seen on several blogs, between some of its commissioners, residents, and some condo association societies.

The fact is that, after years of paying the City Manager incredibly high salaries and benefits, it appears that this Manager wasn't even going to work most of the time.

They have finally decided to fire him.

The dispute is apparently about paying him now 11 months of severance package, plus health insurance for life, I think, and some additional benefits. And that the total bill could be almost a million dollar.

Some time ago, and looking at the high property taxes in Florida which we had to endure during the last few years, due to the accelerated increase of assessed values, I wrote that our cities cannot understand that, since we are in a period of recession, they have to learn how to spend our money more wisely.

I wrote a few times, on how they found the turnaround way of avoiding what our legislators had mandated: reduction of taxes.

This is an example.

The City manager, recently fired, made apparently between $250,000 and $450,000 a year (depending on whose information you read).

If in fact he made these last figures, I bet that not even the City manager of Los Angeles, Tokyo, or Paris would match it. That's really something to brag about!

Hallandale Beach is a city of about 40,000 residents. Schools are some of the worst in the state.
Services are very expensive and considered inferior.

But the City Hall is impressive...

You just draw your conclusions.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos, Sunny Isles Condos,

33% RATE INCREASE IN PROPERTY INSURANCE?

Remember "Drop like a Rock"?

Our Governor, Charlie Crist promised, not so long ago, that Florida property taxes and insurances would get such a wonderful cut that real estate in our state would receive an incredible boost.

Now, whoever you think are your friends in Florida Congress, read the news, and read my comments below:

From The Sun Sentinel - March 25, 2010

Senate panel passes bill allowing major home insurance rate hikes

The Senate's insurance committee passed a bill Wednesday that would essentially allow home insurance rates to rise by a statewide average of up to 33 percent in the next three years. That means premiums in South Florida could rise by more than that. "Couple that with the 10 percent annual increase passed by this committee last week, and you have huge rate increases," said Bill Newton, executive director of the Florida Consumer Action Network who spoke in opposition to the bill along with Florida Insurance Consumer Advocate Sean Shaw. Gov. Charlie Crist also made an appearance to ask lawmakers not to vote for the bill.

The bill would essentially allow automatic average statewide rate hikes of up to 5 percent the first year, 10 percent the second year and 15 percent the third year. Policyholders' premiums can increase by more or less than the statewide average rate. Supporters say the bill is needed to strengthen Florida's property insurance market, draw more insurers to the state and improve companies' ability to pay claims if a major hurricane strikes. Opponents say rates already went up in South Florida after the 2004 and 2005 hurricanes and consumers can't afford additional increases. After heated debate, the committee passed the bill, SB 876, by a 6 to 4 vote. Voting for it were Minority Leader Al Lawson, D-Tallahassee and Senators J.D. Alexander, R-Lake Wales, Mike Bennett, R-Bradenton, Chris Smith, D-Fort Lauderdale, Jeremy Ring, D-Margate, and Garrett Richter, R-Naples. Voting against it were Senate President Pro Tempore Mike Fasano, R-New Port Richey and Senators Ronda Storms, R-Brandon, Alex Villalobos, R-Miami, and Joe Negron, R-Jupiter.

Newton said he's "disturbed" that all the Democrats on the committee voted for the bill and other insurance proposals. The House insurance committee passed its version of the bill, HB 447, last week. To weigh in on this bill or others, you can find your legislators on the state's Web site.

In all truth, our Governor is not the culprit.

Perhaps his Republican friends in Tallahassee?

Oops, not so fast: Have you noticed how many Democrats have also voted for this new attack on the beleaguered homeowner in this state?

Counties, Cities, and now the State: nobody seems to understand that we are living the most trouble times in many decades. Poverty in Florida is one of the worse in the whole US. Foreclosures, Jobless claims, Deficits, are our daily bread.

But our politicians do not quite understand the necessity of downsizing. Downsizing doesn't necessarily mean reducing essential services, like education and health. It means reducing the waste, reducing luxurious offices, parties, travel expenses, level and sub-levels of unnecessary and blown up bureaucracy. Things must change because we cannot afford our and "their" lifestyle anymore. As we are forced to adjust our expenses in face of the recession and economic necessities, so must our government change their spending habits.

In the same line of action, our government must take definite steps to rein in insurance companies. Their non-ending greediness must be contained, least one of these days some genius comes up with a reform , a "public option", a "single-payer-system" or something similar to the health reform that has shaken our political landscape, only that next time it could be applicable to property and auto insurance.

Insurance companies are a big part of the problem. Unbridled and uncontrolled, they lobby and mandate at will their rules on us, as well as our elected officers.

It is evident that the consumer is powerless against their voracity . At least if he wants to buy a car, get a mortgage, or obtain health care. High rates of insurance are a large factor in denying the access to homeownership to many citizens, as are high property tax rates.

Five years since we had a major hurricane, no losses for the insurers, but still paid our premiums. We already had our rates raised after Katrina.

So what exactly happened that forced these insurance companies to pump up again their rate at this shameful levels? And how could they convince our legislators?

Without being a specialist in actuarial sciences and risks calculations, my bet is that they do it simply because they can. And they will keep doing it unless you and me do something about it.

Henry B. Nathan is a Florida Realtor at United Realty Group Inc.
Visit my website: http://www.condo-southflorida.com
where you can search for Aventura Condos, Florida Condos, Sunny Isles Condos,

Citizens Against Excessive Taxes

Cut Property Taxes Now is a very serious citizens initiative which proposal is on the web at:
www.cutpropertytaxesnow

I consider this tax reduction package one of the most interesting and I tend to support it.

Notwithstanding that I will possibly vote YES on January 29th, to the proposed amendments on the present property tax system, I believe that this new initiative would be the complement needed if we want to really get serious about reforming the system in an equitable way.

The January 29th ballot would be mostly about the "portability" of the "save-our-homes" protection. This will perfect and consolidate a provision that has "saved the homes" of many Florida residents against the continuous greed of local government.

However the inequity of the system is blatant. Non residents, snowbirds, new home buyers, businesses, investors, are paying a much higher share of local property taxes, without enjoying any additional privilege. This could even be a challenge to the constitutionality of the "save-our-homes" protection if we do not address it now.

By limiting the taxation power of cities and counties, the new initiative could be the shot in the arm that Florida Real Estate is desperately needing. And a great relief to our middle class.

In effect, all the roll backs voted by the legislature and even the new January 29th amendment, if approved, can be easily bypassed by simply increasing the tax rates. To explain it more in detail, your home assessed value can stay the same or be reduced but your taxes can still go up if the tax percentage (millage) applied in calculating your taxes is increased.

The new initiatives addresses this loophole.

They need 650,000 signatures by January 29th.

They have about 75,000 now.

You can watch their video at:

http://www.youtube.com/cutpropertytaxesnow

You can also make a small contribution on their website: www.cutpropertytaxesnow.com

I am not a friend of any of the people or groups that have put together this initiative.
I have written about the Florida property tax issue and I believe that it is a major problem that affect the lives of all Florida property owners.

If you have any comments, either negative or positive, please post it here.

I am a Licensed Real Estate Professional in Florida.
My website is: www.condo-southflorida.com

Property Tax Reform?

On January 29th, 2008, a Florida Property Tax Reform proposal will go on the ballot.
A 60% majority of votes is needed to pass the reforms approved by the Legislators in October.

An extended campaign by Florida's Governor, with the support of Florida Realtors Association is under way.

My opinion?

Although pathetically insufficient and inadequate, I am seriously thinking of voting yes.
Why? The reduction of yearly taxes to the average homestead homeowner will in the best case reach about $ 220 per year. Non residents, investors, business real estate owners will see no improvement at all.

The possibility of the cities and counties bypassing the tax reduction by increasing their tax rate will probably wipe out all effectiveness of even this small relief, and the "drop as a rock" promise will just be a delusion.

However, the portability of the "save our homes" protection has been reasonably addressed and that will be an important factor in the revival of real estate in our state. Some people will be able to upgrade or downgrade on their present homes without the fear of losing this benefit.
How much will that affect the market? It remains to be seen, but it will definitely be a factor.

There are other proposals which could go on a new ballot in November 2008. One of them is the "cut property taxes now" which should limit the maximum of taxes paid to 1.35% per year on the taxable value. This would also cover snowbirds, investors, businesses, and new home buyers. It should be a much more realistic way of addressing the free spending of our
governments, avoiding loop holes and confusions. Somehow in the same way as California has successfully tackled this issue. And it will attenuate the inequity of the present tax laws.

Therefore, since we accomplish just a step ahead and leave the door open to more agressive
solutions, I am seriously thinking of voting yes on January 29.

Do we really care about our money?

Do we really care about where our tax money goes?

I have found this article by Michael Mayo, from the Sun Sentinel to be very illustrative about why the tax reduction talk might mostly end up in…talk. Budgets have grown so fat that, unless citizens’ action occurs promptly, cities and counties will strongly resist before allowing any tax reduction.

If a politician engineers an outrageous pay raise, it doesn't take long for citizens to snap to attention.

Funny, then, how the bigger, more outrageous things can slide along more subtly.

Such is the story in Hallandale Beach, where Vice Mayor Bill Julian's rescinded attempt to boost city commissioners' salaries from $20,500 to $75,000 triggered angry howls and brought camera-toting media hordes to City Hall last week.

"I feel like a leper. I'm public enemy No. 1," Julian said Monday. "I would have been better off getting an intern pregnant."

It's easy to go off on Julian, because he still doesn't get it. One minute he's apologizing for his "dumb" and "stupid" maneuvers, the next he's unapologetically detailing plans to push for a smaller raise, "maybe $6,000-8,000," in upcoming budget hearings.

But where's the outrage that the city's budget has gone from $68 million to $93 million in the past two years, a 36 percent increase?

Where's the outrage that the city has seen its cash reserves dwindle from $52.6 million in 2005 to a projected $30.3 million at the end of this budget year?

Where's the outrage that the current budget includes a discretionary $2.1 million fund for the city manager to hire outside consultants and additional personnel?

With one dunderheaded move, Julian has become the symbol for all that's wrong with municipal government: the bloat, the sense of entitlement, the sneaky tactics to bypass the public.

Julian brought up the proposal at an unrecorded lunch planning session last Wednesday, and it passed 3-2. But it didn't hold up to the light of day. On Friday, the commission unanimously rescinded the raise.

"Ethically, it was on the border," Julian said. "I didn't give the public a chance to give their input, and that's not right. I know it's not our money, it's the people's money. ... The way I did it gives the perception of deception."

He also did it at the worst possible time, with the Legislature poised to chop property taxes and local governments carping about the havoc it will wreak on essential services.

For all the heated reaction to the raises, the bigger issues behind spiraling city budgets often get lost.

One, involving future worker pension benefits, has been quietly playing out the past 19 months. Hallandale Beach has some 250 unionized city workers who haven't had a pay raise since October 2005, when their contract lapsed.

They are caught in the crossfire of a bigger battle with national implications. It's one that cities have to win for a semblance of budget sanity.

The city wants to change workers' pensions from a traditional "defined benefit" fixed pension to a riskier "defined contribution" 401K-type plan that most private sector firms now offer.

Representatives of AFSCME, the American Federation of State, County and Municipal Employees, are resisting.

"This is the future," said Assistant City Manager Mark Antonio.

But in the future, Julian's chutzpah is what people all over South Florida will remember, even if the scuttled raises amount to a drop in the fiscal bucket. I asked if he thought voters would forget by the time of his next election, in 2011.

"I think people should forget by the end of the month," Julian said. "What do they want to do, flog me on the City Hall steps? This is the first mistake I've made in six years. It's a big one. But at least I'm big enough to admit I did wrong."

Julian, a former thoroughbred trainer, was re-elected to a four-year term in March. He received 942 votes in a city of 18,442 registered voters. The city has about 35,000 residents.

"The apathy is unbelievable," Julian said. He said the commission switched from day to night meetings to accommodate the public, and "we still only get like three people in the audience."

No wonder these people feel they have a license to steal.

Michael Mayo's column runs Tuesday, Thursday and Sunday. Read him every weekday online at Sun-Sentinel.com/mayoblog. Reach him at mmayo@sun-sentinel.com or 954-356-4508.

Please visit my website: http://www.condo-southflorida.com/resales_2.php?id=0
where you can use easy and efficient tools to search for Florida Real Estate, especially condos
and Preconstructions
Hundreds of buildings' description, preconstructions projects, or condo conversions.
Or you can conduct your customized search

While Legislature fiddles around...

While State Legislature fiddles around, Floridians burn

People are starting to realize that easy promises won't necessarily be as easily fulfilled.

While State Legislature fiddles around, Floridians burn

Published May 6, 2007

TALLAHASSEE · Lower property taxes are on the way.

How do I know this? Because somebody hung a big sign in front of the lectern where our state's illustrious leaders spoke after the Legislature wrapped its regular session Friday afternoon.

The sign said: "Lower Property Taxes Are On The Way."

The sign also had a big arrow on it, pointing down, just to show how serious they were.

Beautiful. So now we know what became of the people who made the "Mission Accomplished" banner.

After the leaders congratulated themselves for a "phenomenal" session in which they did nothing about property taxes, they pledged to do something about property taxes very soon, at the special session June 12-22.

Then off they went to Happy Hour, backslapping and smiling all the way.

This didn't impress some people back home.

"All they do is talk," said Dolores Parachini, of Boca Raton. "There's no action."

"Last year they said they were funding a study," said Jim Demarest, a real estate agent from Fort Lauderdale. "I figured, OK, take your time, then come back and make something work. But now they've come back and said we need more time? Fool me once, shame on you. Fool me twice, shame on me."

The Legislature's performance gets them the silver medal in the Dunderhead Politicians of the Week event. Gold medal goes to the Hallandale Beach City Commission, for sneakily voting themselves a more-than-triple pay raise, to $75,000, before rescinding the move on Friday.

In the overall scheme of things, an extra six weeks to fix a broken and unfair property tax system isn't unreasonable.

The problem is there's no guarantee legislators will come up with a solution.

The other problem is that Florida's property tax system is just one of many wobbly legs on a teetering economic table.

The property insurance system that the Legislature allegedly fixed at a special session in January remains a mess, with homeowners still getting socked with big increases and cancellations.

Throw in higher rates for our dwindling water supply, higher gas prices and now possibly higher tuition rates at state colleges, and you've got a middle class on the brink of financial ruin.

"I came to Florida my whole life on vacation, and I couldn't wait to move here," said Parachini, who moved from Nutley, N.J., to South Florida four years ago. "Now it's become a place for millionaires."

Parachini moved to a condo in Boca Raton two years ago. She's been trying to sell her place the last four months. She has had no offers.

"My insurance has doubled the last two years," she said. "In New Jersey, the taxes on my house were high [$7,000] but I only paid $700 a year in insurance. Now it's costing me more to live here, and I only have a small villa."

As real estate values soared in the last five years, the property tax system has walloped recent home buyers and those with commercial, rental and vacation properties. It has also chilled families and seniors from moving into bigger or smaller homes because of the tax consequences.

The Legislature has been exploring ways to revamp the system, including creating new exemptions, expanding caps on assessment increases to all property owners, rolling back the amount local governments can collect, allowing full-time residents to carry tax breaks with them when they move and increasing sales taxes to replace lost property taxes.

Demarest is frustrated that the politicians couldn't reach a compromise sooner.

"It's not like this is a topic that came up at the last minute," said Demarest.

Before the session, Gov. Charlie Crist promised that property taxes would "drop like a rock."

On Friday, Senate President Ken Pruitt held up a rock. "It says patience on it," Pruitt said.

If this doesn't get settled soon, the only thing dropping like a rock will be their poll numbers. And Floridians will keep voting with their feet, straight out of the state.

Michael Mayo's column runs Tuesday, Thursday and Sunday. Read him online every weekday at Sun-Sentinel.com/mayoblog. Reach him at mmayo@sun-sentinel.com or 954-356-4508.

Henry B. Nathan is a realtor in South Florida.

Please visit my website: http://www.condo-southflorida.com/resales_2.php?id=0
where you can use easy and efficient tools to search for Florida Real Estate, especially condos
and Preconstructions
Hundreds of buildings' description, preconstructions projects, or condo conversions.
Or you can conduct your customized search

Condo Questions you haven't asked

Condo Questions you haven't asked.

Are you sure that you want to buy a florida condo rather than a house?
Let’s talk about the advantages.
- You can lock the apartment’s door and travel to Paris or Disney. If you own a house, it becomes a small project. Who’s going to take care of the lawn? And the pool? And what if there is a leak while you am away? Or somebody tries to break in?
-You just pay the condo fees and that takes care of the insurance, the landscape, the pool, and the repairs. No more of these pesky bills.
-You will possibly meet more people in the elevator or just sitting at the pool. You can make more acquaintances and social life can be better in a condo building.
-There might be a nice gym and it’s so convenient to just go downstairs instead of taking the car!
-A problem? Just call the condo management or the maintenance man.
-They have this nice clubhouse, where you can just relax or watch TV while you talk to one of your neighbors.
-Security is not a big concern if your condominium has implemented some kind of 24-hour surveillance.
On the other hand…
-These condominium fees are really high! The pool service at your old house cost about seventy dollars, and if you didn’t want to do your own lawn work, the landscape wouldn’t be more than a hundred dollars a month. Repairs? You mean fixing the fence every ten years? Or the pool pump? That doesn’t even come close to all these payments the condo association is bleeding you every month.
- Parking is a hassle. Going through the entrance gate, park the car, take the elevator! If it was a house, you just park anywhere and you’re home.
- You have 2 grown-up kids and 3 cars. There is only one parking place per apartment. Guess who has a big problem?
- You would like to make some minor changes in your condo and the homeowners’ association doesn’t want to hear about it. There might be an old lady who is so intrusive and mean in the board of directors…
- When you moved in, you didn’t know that this building was falling apart. You just got an “assessment” for “elevator repairs” which will increase your monthly payment by more than 50% the next 18 months!
Evidently, you forgot to ask some questions. Let’s see:
- You had the right to go through the condo association documents. But you didn’t do your homework. You could read some of the board’s meetings minutes. You would have found out that some major repairs had been postponed for a few years.
-You would have found out that the Association’s reserves hadn’t been kept at a reasonable level. Remember that, the older the building, the larger the reserve. You were so happy that the monthly maintenance fee was low. Did you suspect that they weren’t putting aside enough funds to cover the unavoidable roof repair, or the air conditioning’s old age?
Or perhaps they were not maintaining the elevators adequately? Condo owners hate to see an increase in their monthly fee. A good measure of a well managed building is that a reserve fund is maintained for every item, taking into account its remaining life expectancy. And there are well established rules about how a reserve fund must be managed. So, if you had asked to see their budget, it would have made sense.
- Maybe you should have talked to some of your future neighbors and heard about their complaints. For example, you might have found out that a few owners haven’t paid their dues for a long time. And guess from which pockets the deficit is going to be covered. You would be surprised how often it happens. Any lack in the condo association funds will be covered by the rest of the homeowners.
- It wouldn’t hurt to have your lawyer examine the condominium papers and bylaws, to check about any inconsistency. At the same time let him check if there is or have been a lawsuit against the association; maybe by the condo owners themselves.
- Did you check if they allow pets? How many? What size?
-What about their policy about renting your apartment? Many communities restrict the rental of their units. They could have screening policies for prospective tenants. They could altogether limit or prohibit renting. If renting is allowed now, things could change next year. A condo association can change its rules at any time.
- In general, does this owners’ association behave in a rational and organized way? Ask around and make sure that they have usually been sound and balanced in their decisions, taken well care of the premises, and not tried to make life more difficult than it already is. There are more than a few cases when dictatorial boards became the condo owners' nightmare.
- Don’t forget to check the building insurance. See if it covers adequately whatever your own homeowner’s insurance doesn’t. Usually it should include coverage of what is outside your apartment’s walls. Check their hurricane coverage if it’s the case. Check their coverage for unexpected code non-compliances that force the building into costly expenses.
I don't mean to scare you. I have only mentioned the worse-case scenarios. Condo living is usually very pleasant and there are lots of advantages in making this choice.
You just have to choose the right place.
My name is Henry B. Nathan and I am a Realtor specialized in Florida Condo I am multilingual and part of my cliente is composed by foreign nationals. Immobilier Floride is how Florida Real Estate is called in France.



Please visit my website: http://www.condo-southflorida.com

Property Taxes and Home Affordability in Florida

Property Taxes and Home Affordability in Florida.

Impact of property taxes on homeowners in Miami and South Florida.

By: Henry B. Nathan

A key factor in the present Florida real estate troubles is home affordability. Many other issues exist and can be considered part of the normal market fluctuations. However, affordability is invariably the essential element.

Comparisons of Home Prices and Family Income in 1980 and 2005

Let's use Miami-Dade's median home price and Florida's median family income statistics for this purpose.

Median Home Price in 1980 - $75,000.

Median Home Price in 2005 - $372,000.

1989 Median Family Income in Florida = $ 21,355.

2005 Median Family Income in Florida (estimated) = $60,000.

Increase of Median Family income in the same period = 181%.

Increase of Median Home Price between 1980 and 2006 = 396%.

Note: These figures have not been fully verified. They have been taken from different sources, and could reflect some inaccuracy. They are used to graphically explain a tendency, and only in this context, will they serve the purpose of this essay.

Average property tax for new buyer (including Homestead exemption) in 1980: $ 850.

Average property tax for new buyer (including Homestead exemption) in 2005: $5,899. (Approximate figures)

Homestead exemption grants a $ 25,000 deduction on the home assessed value for homeowners who qualify and register with their county appraiser.

What is Save our Homes?

In 1992, Florida voters approved an amendment to the Florida constitution that limited the amount of value a homestead property could increase for tax calculation's purposes.

The law limits assessment increases to 3% percent or the increase of the Consumer price Index - whichever is less.

Non-Homestead property is assessed at the full market value annually.

Home Affordability as considered through FNMA guidelines

$36,588 Minimum Yearly Income, as per FNMA guidelines, was necessary to cover Median Home purchase in 1980, assuming 90% financing @ 12.5% annual interest, 1% insurance annual rate, (PITI= $854). Note the very high interest rates prevailing in the 80's.

(PITI = Principal + Interest + Taxes + Insurance)

$134,086 Minimum Yearly Income as per FNMA guidelines, was necessary to cover Median Home purchase in 2005; assuming a 90% financing @ 6.5% annual interest, 1% insurance rates, (PITI=$3,152)

Roughly, FNMA basic guidelines require that no more than 28% of the buyer's gross income should be dedicated to pay for his monthly PITI (Principal + Interest + Taxes + Insurance).

To be noted is the dwindling affordability despite the fact that mortgage rates in 2005 were half of what they were in 1980.

Impact of Property taxes as compared to median home values in 1980 and 2005

Property Tax for new buyers as a proportion of median home value in 1980 = 1,133%

Property Tax for new buyers as a proportion of median home value in 2005 = 1.586%

The heavier burden is partly due to the decline of the homestead exemption as a proportion of home value.

The $25,000 exemption represented 33.3% of the median home value in 1980.

It represented a measly 6.7% in 2005.

Percentage of Median Family income dedicated to Home Property Tax in 1980 = 4%

Percentage of Median Family income dedicated to Home Property Tax in 2006 = 9,83%

However, this increase is only valid for new buyers in this market. The Save our Homes

Tax break unfairly burdens new buyers, vacation-home owners and investors, and protects Old Homestead Owners with the limitation to 3% yearly increase in their property taxes.

Fact: Even though Median Home Values have increased proportionally more than double the Median Family Income, and substantially increased the tax base, Counties and Cities, as beneficiaries of property taxes, have found their way to increase their mileage (or tax rate), further aggravating the cost of owning a property in Florida.

Do we fully understand the message that these irrefutable facts are sending to all parties?

To old homeowners in Florida: Do not ever, ever move from your house or condo. You will be punished by an unsustainable raise in property taxes, even if you downgrade to a smaller and more affordable home.

Do not try to add space, build or remodel. Every added square foot will be taxed at the full market value, because it would not be covered by the Save Our Homes exemption. You would be surprised by how much it could raise your tax bill.

To Owners of second homes or vacation homes in Florida: Congratulations, your equity has tripled in the last 10 years. Now, take your money and run. From now on, you are being hit with taxes three or four times higher then 10 years ago; while you are not taking advantage of schools and other infrastructure designed for permanent residents, you are paying the highest bills. Conclusion: Sell

To Investors who have held their property for more than 5 to 10 years. Congratulations; time to take your profits and find a better investment. Your tax expenses are 3 or 4 times what they were when you bought the property. You have tried to raise the rents you collect to cover your rising costs, but you have not been able to keep up to tax and maintenance fees increases. The fact is that renters cannot afford to pay a rent that would make sense for your investment.

To Investors who bought recently. Good luck. You have paid the high price. Your property taxes are high and relentlessly increasing. Your rents barely cover your taxes, maintenance fees and a tiny part of your monthly mortgage payments. The message: Cut your losses, sell and run... But this is the sticky situation of thousands of other "lucky" investors. As a last recourse, just try to rent it, take a monthly loss and hope for the best.

To New Homebuyers. Good luck. You are paying the highest prices. You are paying the highest property taxes. Your expectations of a quick valuation of your new home will have to wait for better times. Meanwhile, just clench your teeth, take the hit and hold on.

To Renters. You are already experiencing a strong pressure on rent prices and it will persist for some time. Your American dream of homeownership is being crushed and is almost unattainable now, but what you are paying in rent is almost a bargain. But expect progressive and unavoidable raises.

And the message that Florida residents are increasingly sending:

To Local Governments: You have been running wild with our dollars. You are fat and rich but you would not give up; you keep wasting our money and you keep increasing our taxes, and today you are the only beneficiaries of the real estate mayhem that is threatening our state. What about some legislature-mandated spending limits?

Correcting the problem:

Whoever is now a beneficiary of the Save our Homes taxation should not tolerate any intent to take away this privilege. After all, 3% cumulative annual increase (as allowed by the Save our Homes rules) is more than fair.

Cost of living has not on average increased more than this percentage during the last 10 or 15 years. So, why accept to be taxed on hypothetical sales value of your homes by greedy local government? We all know that county and city services have not improved in any way to justify three and four times larger tax bills.

Therefore, their expenses should have increased at the same rate as the national inflation rate. Unless they have chosen to mask their inefficiency at taxpayers' expense.

To the contrary, we can even argue that the mushrooming new constructions have already increased their tax base in such a way that the common homeowner should have expected a reduction in tax rates.

Legislators should better consider new regulation to transfer these Save our Homes advantages, when homestead owners switch properties of the same of lesser values. This would surely reactivate the real estate market.

There is no doubt that the present level of property taxes should face a serious examination in order to place them back at their historical levels, as a reasonable proportion of median family incomes, as opposed to their now almost confiscatory levels. I am talking about reduction of tax bills.

The present real estate recession is not due to circumstantial or accidental factors. There are deep economical reasons which can and should be corrected. Affordability of homes is part of our government responsibility and should be addressed accordingly. Unfair and abusive property taxes are one known issue and voters should put pressure on their representatives to correct it.

We are not talking about tentative and timid measures. I have heard of a motion to increase the Homestead exemption from $ 25,000 to $50,000. This will not solve anything. It would just be a symbolic and political step.

What about a real study of what 25 years of inflation have done to nullify the economical and social effect of this exemption? Shouldn't we roll it back to be the same proportion of basic home values as was in its original intent?

Wouldn't a $ 100,000 exemption be closer to reality? Wouldn't that help the first time home buyer achieve the American dream? Wouldn't that be a real injection of reality to our real estate market and our economy in general?

Affordable housing for Floridians is an urgent necessity. No doubt that million-dollars homes and condos have contributed to our economy, but will there be any economy left when working people start leaving the state because of unsustainable home values?

The "save our homes" laws have somehow protected a portion of our homeowners. However, they are an incomplete and unfair arrangement. A complete revision to maintain this protection and also protect new homebuyers, vacation home buyers and investors against abusive property tax increase would be welcome.

Of course, soaring property tax issue is not the only element in home affordability. Interests and financing costs, inflation, salaries, cost of building, land values, are also determinant factors.

But property taxes are a cumulative burden on the homeowner and they will haunt him year after year. It is time for local governments and our legislators to address this issue that is vital for the survival of our battered middle class.

Disclaimer: This article represents the personal opinions of the writer and are not related to any firm, association or business with which this writer maintains any kind of relationship.

Please visit my website:

http://www.condo-southflorida.com where you will find the most advanced tools to search for a home, or a condo, as well as review hundreds of preconstruction projects.
Our condo search tool will allow you to browse through many buildings in South Florida, and find all MLS listings for these specific locations.

What is mold? An introduction.

As a Real Estate professional, I have understood the importance of answering my customers’ questions about different related subjects. One of them is mold.

Molds are microscopic organisms that produce enzymes to digest organic matter. They are nature’s way of getting rid of plant and organic debris.

They reproduce through spores. They are basically fungi, as are mushrooms, mildews and yeast.

They are the essential part of the process of cheese making. Penicillin is originated in mold. So there is nothing wrong with them except in very specific situations: for example, when they get their way into our homes.

They usually begin growing when they find moisture on carpets, wood, paints, and insulation.

Excess moisture will build up from a flooding episode, high humidity, a leaky bathroom or a damaged roof. As soon as mold spores settle in a house, they feed on the moisture that they digest to grow.

Once mold spores settle in your home, they need moisture to begin growing and digesting whatever they are growing on.

How do they affect you? Mold spores, released into the air, will be absorbed through respiration or by skin contact to the affected area. They can also get in your body when you eat moldy food or by mouth contact after manipulating moldy materials.

For a healthy person, being exposed to common mold is not a great risk. People suffering from asthma, allergies, and lung diseases will aggravate their condition due to infections caused by molds. A common disease is caused by the mycotoxins, produced by molds. The effects can be respiratory, migraines, nausea, fatigues, cough and eye irritation.

Detecting mold:

Odors can be a first sign. A musty smell, added to white grows or clusters of black specks in damp locations are definitely something to worry about. But there are many cases of hidden mold that cannot be detected so easily. Try areas with water damage, or furnishing that have suffered from flooding or leaks. Places where warm and moist air has condensed on a wall, behind a headboard, furniture and closets. Kitchen, bathrooms, laundry rooms with high usage of water are the most suspect.

Fixing moisture and leakage problems in your house are the first step. Ventilation and good air circulation will help. Periodically aerating your house with fresh outside air. Use of air conditioning and dehumidifiers will definitely help.

Furniture against outside walls should be placed a few inches away from the wall

Verify that your bathrooms, kitchens and laundry rooms are ventilated with exhaust fans. Install fans if missing or damaged. Thoroughly clean or replace dirty or damaged carpets, curtains and upholstery immediately after a flooding incident.

If you attempt to clean mold, only do it if you are free of allergies or asthma. Even in this case, only do it in small areas and be careful not to stir and spread mold spores, which would only worsen the problem.

If the area is large, hidden under carpet or floors, between walls, you should definitely call a professional. If you do small cleanups, protect yourself with goggles, gloves, breathing mask. Ventilate the area by opening windows before starting. Seal off the area from the rest of the house to avoid spreading the mold spores. Cover ventilation grills. Remove your furniture to a clean area and inspect it for a later cleanup.

Bag and discard carefully all residues and moldy debris.

After cleaning, scrub all surfaces with mild detergent and warm water. If possible use a bleach solution.

Finally apply a borate-base detergent. Do not rinse. The surface will be protected from new mold. Borate-base detergent can be found in many stores. To finish, clean thoroughly the whole area, vacuum the floor, wash bed sheets and clothing that have been exposed.

Heavily affected furnishings should be discarded and replaced. If you decide to keep the least damaged, let them ventilate outside and check for remaining odors.

Watch during a few weeks for recurring odors or moisture.

This is just an introduction. You will easily find specialized professionals who can give you a more complete and educated advice on the subject. And it would be advisable to ask their opinion when buying an older home where you suspect that mold could be present.

Henry B. Nathan is a Realtor at International Realty Inc. - Please visit my website: http://www.condo-southflorida.com