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'55 and Over' Crushing Margate Economy?
• Demand for these homes is low
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Sunday,
May 31, 2009
With thousands of homes listed as ’55 and Over’ in Margate, one might say Margate is a retirement city. Not only does U.S. News & World Report list Margate as one of the “Best Places to Retire,” the phrase “that’s where all the old people live,” has been used more than once to describe our North Broward city.
Economic implications of ‘55 and Over’ in Margate
AD VALOREM TAX
When single-family homes in Margate were selling for an average $300,000 during the boom years, ‘55 and Over’ single-family home equivalents were selling for about $240,000 – or 20 percent less. This presents a strain to Margate’s ad valorem tax base, as the lower fair market value for ’55 and Over’ homes results in less taxable value for the city.
Since the burst of Florida's housing bubble, the average, tax-assessed value of a Paradise Gardens single-family home (a 55 and Over community with approximately 1200 single-family homes) has plummeted by $50,000 (a 25 percent drop). This adds up to a loss of about $400,000 in ad valorem taxes that Margate won’t be collecting this year from just four of the sixteen ’55 and Over’ communities in the city.
POPULATION
According to the U.S. Census, the population of Margate, Florida has grown a scant one percent from years 2000-2007 (about 585 people) – a far slower growth rate than the national average of 1.1 percent yearly and a less robust growth rate than cities bordering Margate.
As population growth is vital to economic expansion – and the majority of residents living in ’55 and Over’ communities typically don’t grow population – the overabundance of ’55 and Over’ communities in Margate may contradict sound economic development moving forward.
SPENDING
The majority of residents living in ’55 and Over’ communities in Margate are age 65 and older and possess limited disposable income. In fact, most live on fixed incomes, say seniors at Margate’s Focal Point Senior Center. This sizeable Margate age group spends less freely and is more frugal with their dollar, posing a detriment to Margate businesses that don't cater to the senior demographic.
CITY SERVICES
In a recent housing study entitled “The Impact of Age Restricted Housing” the author reports that the impact of ’55 and Over’ communities isn’t realized by a city until ten years out, when ’55 and Over’ residents begin to age and require more city services, such as transportation, emergency services and healthcare. As a result, many towns and cities across the U.S. have limited the number of ’55 and Over’ communities they allow, in an effort to maintain a demographically balanced residential mix and a vital local economy.
'55 and Over' homes aren't selling in Margate
Realtors from Century 21 and RE/MAX say it’s nearly impossible to sell a “55 and Over’ home in Margate, especially in the down economy. Some stopped accepting ’55 and Over’ listings before the housing bubble burst, said one realtor, because the communities are over-restrictive and “all too-tough a sell.”
Turn away the police, the fire department and city workers?
Suitable for snow-birds and those approaching retirement, ’55 and Over” communities in Margate continue to turn away civil-servants, fire-rescue workers and police officers for ‘being too young.’ The same people that provide them with the services they require.
Now that ‘55 and Over’ communities in Margate are overrun with foreclosures and abandon properties that not even the banks can sell, these communities may be encouraged to re-think age restrictions and to consider allowing a higher percentage of families, educators, city workers and other professionals to move in.
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Copyright Cassius Group 2009
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