Development Slows Significantly in Miami Beach

With slower growth in property values and a projected deficit in the FY 2019 budget, the City begins the process of examining budget cuts and what’s driving property values.
 
As we reported yesterday, the preliminary assessed property values show an increase of 3.4% but the City needed 7% growth to maintain current services in the next budget year. Despite a projected increase of $5.8m in property tax revenue, there is a deficit of $5.4m in the budget.
 
In an email to Miami Beach City Manager Jimmy Morales, CFO John Woodruff wrote, “An interesting insight from the property value numbers is that new construction decreased dramatically.  We went from $858.8 million last year to $97 million in new construction this year.  The baseline growth last year was 5.3% but new construction goosed it to 7.8%.  This year our baseline growth was 3.1% and new construction barely increased it to 3.4%.  The County’s baseline growth was 3.9% but new construction got them to 6.0%.”

While the certified property assessments aren’t due until July 1, very little change is expected. As Woodruff wrote, “After July 1st we’ll have more insights into what’s driving the property values.  We could be looking at several years of relatively flat property values.”
 
Commissioner Ricky Arriola, Chair of the Finance and Citywide Projects Committee, told RE:MiamiBeach, “[W]ith the prevailing attitude against new development, our City faces a future of slow revenue growth and therefore painful future cuts in services. It's been fashionable to run for elected office on a platform of 'no new development' but I don't think people understand that that will mean fewer police officers, a smaller fire department, decreased city services and fewer interesting projects to live in, shop at or to dine."
 
The Finance and Citywide Projects Committee will discuss the budget at its meeting on Friday, though it will certainly come up at tomorrow’s Commission meeting.