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Real EstateWise
Development Dynamics
In South Florida
By Neil M. Shpritz
Interesting times are these! The South Florida economy, along with
those of the state and nation, is clearly experiencing some stress.
Creativity in economic development efforts is critical as competition
for new and expanding business and industry intensifies.
A
At the outset, let me make something clear. Though I shall be
critically addressing some major issues about the structural
economy of South Florida, I do expect to see continued
population growth here, a fact that by itself assures steady interest
in locational opportunities by corporate America.
There are very real matters concerning property taxes and
insurance, but lamentations that significant numbers of people are
fleeing residency here simply are not accurate in my judgment.
The other, and more compelling, reality is that the foundation of
the South Florida economy is based upon tourism and
construction/development.
Several trends are currently troubling. Most evident is the
residential real estate slowdown. Whether one talks about “soft”
or “hard” landings, there is a real reversal of trend. On one
hand, people begin to feel poorer as paper profits shrink or are
wiped out. Very real and immediate, however, construction jobs,
generally high wage in
nature, are being cut as
the result of the drop-off
in new building activity.
The silver lining on
this cloud is that
commercial construction
should now be able to
proceed more
aggressively since there
is a readily available
cadre of experienced trades people who have lost positions in
residential building. Another bright spot in the residential outlook
is that South Florida remains extremely popular for the millions
reaching retirement age and looking to migrate to a warm
climate. This should somewhat cushion the residential market’s
slide, both in severity and duration.
I am not trying in any way to minimize the pain of people
looking to buy and sell homes in the current environment;
however, structural issues facing our economy are far more
important in the long run. As I have cautioned previously, it is
critical that our state and county move aggressively in the area of
economic development to upgrade the quality of jobs and
incomes. We must abandon, and there are hopeful signs that we
are abandoning, a strategy of being just the low cost job
provider. This is not an unusual circumstance for a region
primarily dependent upon tourism and service employment.
It is easy to play statistical games when talking about job
creation. But, the fact remains that incomes here lag significantly
below national norms. And, as should be expected given the
large base of low wage industry, Florida is adding jobs at a
faster pace in lower rather than higher wage occupational
classifications.
Now, on to more good news. Recognition of the importance
of quality jobs is taking hold in both the private and public
sectors. Active recruitment for a biotechnology “cluster” is
obviously occurring and recent announcements by Scripps, IBM
and a host of others confirm our healthy efforts are paying off.
That takes us to the controversial subject of public subsidies for
private companies. We shall soon explore that very interesting
topic in this column.
See you next month!
— Neil Shpritz has been an economic development professional for more
than 35 years. His national experiences encompass both the private and
public sectors. He can be reached at P: 561-306-6860 or by email,
nmsecon@adelphia.net. ❂