Economic Future of Coral Gables: A Pessimistic View
August 8, 2010 Leave a comment
What are the prospects for the economy of the City Beautiful?
The slow return of the US economy from the worst economic recession since the Great Depression is raising strong concerns that the US may follow a slow up-and-down growth for many years to come rather than a sustained expansion. Slow growth is already causing a permanent loss of employment and skills of those unemployed for a long time. Families are suffering the loss in the values of their homes and savings.
There is a continuing weakness of small and medium banks from the financial crisis. The large “to big to fail” banks are still adjusting their business to the new economic realities. There is even a risk that the US will have another financial crisis in a few years because of more risky behavior and weak capital of the banks and the partial reform of financial regulations.
Coral Gables is not an island unto itself, but it is affected directly or indirectly by the following prevailing economic factors.
- The economic stagnation is hurting the retail sales and commercial property values in Coral Gables. Retail sales are not expected to return until consumers fix their own personal economies;
- There are restraints on the availability of financing for the construction of new commercial and residential real estate
- The State of Florida will not have money to transfer to municipalities (see this year’s estimated budget in which these monies fell);
- The city still has relatively high cost municipal services;
- There are limits on benefits from city enterprises such as the Biltmore Hotel, the parking system, the golf courses, the sanitary sewer system and the Coral Gables Country Club;
- The city may not be able to keep up with the maintenance and replacement of city infrastructure because of budget limitations;
- Businesses in the city, based on administrative, legal, marketing, media, insurance and financial services, are relatively stable but slow growers;
- The city has limited reserves for hurricane response;
- The antiquate tax system of the State discourages new residential owners with its high property taxes; and
- A county environment with high taxes and structural unemployment casts a pall over Coral Gables.