Palm Beach County Property Prices Rise

Despite a sharp rise in taxable property values in 2015 — which will bring Palm Beach County about $9 million more than it expected — County Administrator Bob Weisman said he does not plan to recommend a reduction in tax rates this year.

“We need every one of those dollars to meet the requests of the sheriff, demands for Palm Tran (bus service), the courts,” said Weisman, whose staff is preparing the county’s budget. “We were still trying to close a substantial gap between revenue and the demand for services. This will help with that.”

The 8.7 percent countywide jump is the biggest in a decade.

It became apparent Friday with Property Appraiser Gary Nikolits’ release of estimated property values for 2015. The taxable value — which is the number that local governments base their budgets and property taxes on — rose in the county and each of its 38 cities and towns for the second year in a row.

With tax rates pegged to property values, a rise in property values could mean more tax revenue for infrastructure, libraries, police and fire service. Or elected officials could return some or all of that additional revenue to taxpayers by reducing tax rates.

Officials from several cities said it’s too soon in the budget-writing process to determine what should be done with the additional revenue.

“It’s pretty good news, but I don’t know at this moment how it’s going to affect the tax rate,” said Paul Schofield, village manager of Wellington, where estimates showed a 9.7 percent increase in values.

Added Royal Palm Beach Village Manager Ray Liggins, whose village showed a 10.7 percent hike: “It’s going to come down to how many capital projects we want to get done next year. I’m not sure yet which direction we’re going.”

Palm Beach Gardens Vice Mayor David Levy said a tax cut could be in the offing for residents of his city, where a 7.3 percent jump is forecast.

“What we will probably need to do is evaluate the additional taxable value and see what to do with the additional funds,” he said. “Probably, we should return a good portion of it to the taxpayer.”

Other city officials saw the increased property values as validation of their growth and development strategies.

“Lake Worth’s growth is more about people rediscovering and investing in our cottages, walkable neighborhoods and cool, funky downtown,” said Michael Bornstein, city manager of Lake Worth, which showed a 9.5 percent increase. “Unlike some of our sister cities that are adding new, large urban development communities, we are re-filling with residents who appreciate our lifestyle and assets such as the beach, golf course and arts scene.”

Jupiter Town Councilman Todd Wodraska said the 9.8 percent rise in his town’s property values “shows that Jupiter and north county’s attention to low density and keeping green space has served us well.”

Property values grew countywide for the fourth year in row, highlighting the county’s climb from the depths of the Great Recession.

“The county has had a surprisingly healthy comeback,” Nikolits said. “Palm Beach County is a desirable place to live.”

While the rise in taxable property values can be good news for local governments, it also requires hard decisions by elected officials. Higher property values, without any reduction in tax rates, means home and business owners must pay more in property taxes.

Local government officials can decide to reduce their property tax rates and, based on the higher values, still draw the same amount of revenue they drew in 2014. That process of calculating proposed tax rates for the 2015-2016 budget year will go on in the county and its cities from now until October.

Included in the estimates released Friday is not only the value of all real estate — residential, commercial, industrial, agricultural — but also of business property such as equipment, furniture and fixtures.

The numbers are preliminary estimates for local governments to start the budgeting process and are likely to change, at least slightly, when the updated tax rolls are released July 1. Adjustments are then made as property owners challenge their assessments to the Value Adjustment Board, and final property value figures are determined in the fall after all the challenges are resolved.

But the early estimates show property-value increases enjoyed by the county’s cities ranged from 32.3 percent for Riviera Beach to 1.2 percent for the tiny town of Glen Ridge.

The average growth for all cities is 9.4 percent, and most of the large cities are close to that number, including Boynton Beach at 9.3 percent and West Palm Beach at 11.5 percent.

Property values rose even in places that have often struggled. Property values in Belle Glade were up nearly 11 percent and in Pahokee about 10 percent.

Though increases in the value of commercial property are the primary driver of the overall boost, the value of residential property is on the rise, too, Nikolits said.

“Appreciation of residential properties continues to be above what one might consider normal,” he said. “Back in the 1990s, when the market was more stable, you would expect to see annual increases in the 4 percent to 7 percent range, not the 12 percent range of today’s market.”

The rise in property values aren’t a surprise. Nikolits predicted a boost this year, though he said he thought it would be smaller than the 7.4 percent rise the county saw last year.

“At the time I made that projection, I was not thinking of the three big drivers that were coming on the roll this year — Harbourside Plaza in Jupiter, The Outlet Mall in West Palm Beach and the new FPL power plant in Riviera Beach,” he said.

That power plant was a huge factor in Riviera Beach’s boost in property values, Nikolits said.

“The overwhelming majority of the increase in Riviera Beach was from the power plant,” he said. “Factor out the power plant, and their increase is probably around 9 to 10 percent.”

Four years ago, countywide property values fell to a 10-year low of $124.4 billion — a steep plunge from the historic high of $169.5 billion in 2007. Only two years before that, the value of property had shot up 23 percent — from $130.1 billion in 2005 to $160.1 billion in 2006.

Now, the taxable value of property stands at $151.7 billion, up from $139.5 billion last year and the highest it has been since the start of the recession in 2008, when it was $159.7 billion.

The county is poised, in the next year or two, to regain all of the property value losses of the Great Recession.

“If things continue as they have the past two years, that would be true,” Nikolits said, “and I’m not seeing anything to indicate a substantial slowdown in the next year or so.”

Staff writers Kristen M. Clark, Bill DiPaolo, Tony Doris, Sarah Peters, Alexandra Seltzer and Kevin D. Thompson contributed to this story.