South Florida's Property Value Surge & Delray Ups Parking Rates

As cities begin work on next year's budgets, new numbers show that the pandemic-fueled surge in South Florida property values continued in 2022.

According to preliminary estimates released June 1, Boca Raton's tax roll increased almost 12 percent. In Delray Beach, the overall increase was 13.2 percent and 15.63 percent for properties within the Downtown Development Authority. The agency levies a separate tax for its programs.

Though the Federal Reserve began raising interest rates In March 2022 and mortgage rates followed, the drag on homebuying took longer to hit this area. Prices also stayed high here last year because inventory stayed low. Now that homeowners with low rates are reluctant to sell and take a higher rate, the supply of new homes likely won't rise.

For Boca Raton and Delray Beach, the two-year increase in values almost certainly is historic. A year ago, Boca Raton's tax roll went up 12.7 percent. That's even more impressive when you consider that Boca Raton has the highest property value of any city in Palm Beach County. Values in Delray Beach went up 13.4 percent in 2021.

Property taxes are the main source of revenue for local governments, but primary homeowners won't pay anything close to those increases. Florida's Save Our Homes amendment caps annual taxable increases at three percent for homesteaded properties or the rate of inflation—whichever is lower. That value resets higher, though, when a home is sold, and the cap doesn't apply to second homes or commercial properties.

So the added revenue will be tempting for local officials. Delray Beach holds its first public budget meeting next Tuesday. Those values, however, also could create a financial trap.

As noted, these are outlier numbers. In 2020, the increase in Boca Raton was just 2.8 percent. In Delray Beach, it was five percent. And those numbers looked good compared to predictions that values could crash after the COVID-19 pandemic began in March of that year.

Delray Beach would like to lower its tax rate incrementally again this year. Both cities, though, would have to drop the rate significantly for homeowners to pay less. Even when the rate stays the same, overall bills go up. That's the reality behind the annual boasts by Boca Raton City Council members that they didn't raise taxes.

It does bear repeating, though, that Boca Raton has a very impressive tax base for a city of about 98,000 people. The value of taxable property within the city is $34.6 billion. Compare that to $21 billion in West Palm Beach, which has a population of about 120,000 and has been touting its success at drawing companies from New York City.

Delray Beach also looks good compared to its northern neighbor. The tax roll is $16.3 billion for a city of 67,000. In Boynton Beach, which has about the same population, the value is $9.1 billion.

Delray Beach has raised parking prices, but discussion about this recurring topic probably isn't done.

Attempting to simplify things, city commissioners approved a three-tier system that started May 17. Spaces on East Atlantic Avenue between A1A and Swinton Avenue cost $4 per hour with a maximum of three hours. Spaces on the beach cost $3 per hour, and spaces everywhere else are $2.

City administrators had proposed a rate of $4 for the beach. That system, they said, could bring in an additional $3.1 million per year. Commissioners, though, preferred what Delray Beach is calling the "4-3-2" system.

Practically speaking, these increases apply mostly to out-of-towners. Delray Beach residents can obtain yearly passes for as little as $12, depending on location. Yet the city has sold only 207 permits for downtown. Most residents long ago adopted personal strategies for parking near or on Atlantic Avenue.

In addition, city garages have plenty of parking for longer than the three-hour limit for spaces on Atlantic. The city hopes that the new pricing will encourage more people to use those garages and free up more on-street parking.

For Delray Beach, parking is a water-bed issue. Push on part of it, and you jiggle another part. Downtown business owners want space nearby for their customers and their employees. Some owners say their workers don't feel safe walking even the few blocks to a garage. City officials, however, want spaces to turn over quicker.

The commission had planned to continue the discussion today at a workshop meeting titled "Parking Rate Plan and Technology." Some commissioners had wondered why the city can't give residents a price break with each parking transaction. Director of Public Works Missie Barletto said Delray Beach doesn't have such technology. But the meeting was canceled.

Commissioners also complained about emails based on misinformation about the new rates. Rob Long said he heard from residents that the change would affect spaces in parking lots near the beach. It doesn't. City Manager Terrence Moore said his staff would amp up communication efforts.

Also on the agenda for today's commission meeting is a resolution authorizing Moore to execute documents related to the lawsuit over "forever chemicals" in the city's water.

Delray Beach joined other local governments in litigation against DuPont, maker of those polyfluoroalkyl substances, known as PFAs. The category covers roughly 12,000 chemicals used to make many household products. They are called "forever chemicals" because they take so long to break down and have been linked to cancer and other diseases.

Before he joined the commission, Long raised the issue of PFAs. Though levels in Delray Beach met state standards, environmental groups said the standards were weak. The Environmental Protection Agency soon will toughen those standards. Delray Beach's new water plant will be able to meet those stricter limits.

Peter Licata, who as south-county regional superintendent supervises campuses in Boca Raton and Delray Beach for the Palm Beach County School District, is a finalist to become superintendent in Broward County.

The school board narrowed the field to three last week. Licata, a former principal at Boca Raton Middle School, was a semifinalist last year when the Broward job seemed about to come open. He then withdrew.

With hurricane season having started last week, Boca Raton is the only city in the county to have received StormReady certification from the National Weather Service.

According to a news release, cities must meet standards in three main categories to obtain the certification—tree trimming, staff preparation and drainage. In recent years, the city has urged residents to trim trees away from power lines. The emergency operations center is built to withstand a Category 5 storm, and underground work throughout the city has been a priority.

The National Weather Service considers local governments that have obtained the certification to be better prepared to handle impacts from a storm.

Visit our City Watch page and also sign up for our City Watch e-newsletter, where you’ll get the latest column delivered directly to your inbox.

Δ

Sign up for our City Watch e-newsletter, where you'll get the latest column delivered directly to your inbox.

Δ