Monday, August 8, 2011

The Devaluing of Lake Worth...

It is well known that Lake Worth experienced the largest decrease in property values of any of the 38 municipalities in Palm Beach County, including the unincorporated area, over the past four years.  The overall decrease throughout the US, Florida and south Florida in particular, can be laid at the feet of what is now being called the Great Recession.  The supply of money for housing led to a glut of new residential units in the marketplace nationwide and regionally.  While Lake Worth added some units, what new housing stock that was added here was dwarfed by the amount added by other Palm Beach County municipalities like West Palm Beach, Palm Beach Gardens, Wellington and western areas of the county.

One factor that I have recently identified that continues to contribute to Lake Worth relative under-performance when in comes to property tax value is the lack of information and the lack of certainty in the marketplace.  Much like the downgrading of our nation's credit-worthiness in the eyes of institutional investors based upon the political gridlock in Washington, D.C., Lake Worth is a victim of its own sort of gridlock.

Remember back seven or so years ago when we embarked upon our master planning and visioning process?  The intent was to incorporate the community's vision into what it wanted Lake Worth to look like in the future.  This vision would then lead to a newly adopted Comprehensive Plan and ultimately a new zoning map and zoning code - in the form of land development regulations - that would allow that vision to become a reality.  At least $1.5 million has been spent on this effort to date and only this year were we able to say that we had a complete Comprehensive Plan that was found in compliance by the Department of Community Affairs - the arm of the state that used to regulate such things.  Since Governor Scott got into office, the entire department has essentially been dismantled and now communities are much more independent on how they chart their growth and development or "sustainability" than they were before.  But that is another story.

Meanwhile, the hands of time keep circling the clock and the pages keep flipping on the calendar.  What is currently known as the Lake Worth zoning code, and what the world can find on Municode, is not consistent with its Comprehensive Plan.  Other communities, generally speaking, do not face this inconsistency.  What this does for people that have money to invest in real estate or want to open a new business in Lake Worth is that it leads them to other communities that do not have this issue.  The market abhors uncertainty.  That's why the investment community was concerned about the inability of the United States to raise its debt limit to pay for it obligations.  There is now a "hangover" effect of this throughout the world about what was once considered a 100 percent safe investment.  That standard probably was never true in Lake Worth, but the principle is similar.

Like I said, time passes.  Recently, I was made aware of a colleague of mine who had a client that showed some interest in Lake Worth as a place to invest money in real estate.  In fact, there were about three individuals that contacted him for more information about what was possible on certain pieces of land.  I am not aware of the particulars of any of these, but the first step in determining whether or not to go forward with the investment of time and money is finding out what is possible to build on a given  piece of property.  Lenders are also interested in this information, as are insurance companies and other financial interests.  They want to make sure, with some certainty, that their investment will be safe over a reasonable period of time.  With this disconnect between the Comprehensive Plan and the city of Lake Worth's land development regulations, that uncertainty can never be made certain.  These people and entities with money then look elsewhere to put their money - places which can provide that certainty.

In my colleague's case, he was asking for a zoning map to be made available on the city's website - which one is not - no great surprise here.  A zoning map is available from the city, but it hasn't been updated for three (3) years.  So any information gathered by my planner colleague would have to carry that disclaimer.  This is how our Community Development Director responded to his suggestion to putting the zoning map on the website and the status of the map/re-write of the land development regulations:

I love your suggestions and would like very much to provide the information you desire on our city website.  Unfortunately, our current zoning map has not been updated recently.  What is available on the website is what we have.  Sad but true.  We will be providing a new zoning map and future land use map when we complete our Land Development Regulation process, which should occur by the end of the year.  At this time, I cannot justify financially the expense of developing an updated zoning map when we will need a new one in just a few months.  Please do stay in touch and we will be happy to accommodate your needs as best we can.  Thank you.

William WatersAIA, LEED AP, NCARB
FL AR#94136 & FL ID#5745
Community Development  Director
City of Lake Worth
1900 2nd Avenue North
Lake WorthFlorida 33461

These are some animated responses from a local land use attorney after being told of the foregoing and how it amounts to a de facto moratorium on redevelopment:

This practice is consistent with the Housing Code, which no one can have because the version of the Standard Housing Code they are using has been out of print for a decade or so, and, in addition, is copyrighted. So if you want one, you can't even buy it from the publishers. There is something fundamentally and deeply offensive to the principle of due process of law when you can be prosecuted for violating a law you can’t read.

No one reads their own code. Please consider LW Zoning Code sec. It's absolutely clear: zoning changes are not effective until mapped. That suggests to me that they should not be issuing permits for sites that have not had their zoning amendments mapped. (Permits once issued incorrectly in violation of the code would probably be protected by the principle of equitable estoppel, since the error is entirely on the side of the City & the permittee is an innocent victim of municipal incompetence.)

They can't enforce the LDR rewrite as "law". If they are, it's an illegal moratorium. By the way, the Burt Harris Act was just amended to tighten up the conditions for a moratorium -- e.g., max. 12 months.

In case you are interested, here is a link to the zoning map for the City of Greenacres, which is easily found on their website. I happen to have a small project going on there at the present time. I challenge you to look at websites of other cities in Palm Beach County and see how easy it is to find such elementary information.

In the meantime, those with money will invest it elsewhere and we will keep bringing up the rear of Palm Beach County municipalities.  The race to the bottom continues!  This is not unique to my fellow planner - it is something that would be felt by any planner or any person interested in Lake Worth.  What about all those people in Southend-on-Sea?