TAMPA — In further proof of Tampa Bay’s red hot real estate market, the total value of taxable property in the region is projected to rise at or near double digit rates this year.
The result will likely be a small windfall for local government agencies as they prepare their last budgets before an increase in the homestead exemption goes to voters in a November referendum.
Estimates by property appraiser offices show that taxable values — the total value of property minus homestead and other exemptions — are up roughly 10 percent in unincorporated Hillsborough County, the biggest increase since the real estate market crashed around 2007.
Projections are equally bright for the region’s two biggest cities, with the taxable value of property rising by 10.4 percent in Tampa and 9.5 percent in St. Petersburg. Taxable values are also up about 8.5 percent in Pasco County and Pinellas County.
Fueling the increases are rising home values and almost $3.4 billion worth of new construction in Hillsborough and Pinellas counties, property appraiser data shows. The bulk of that, some $2.5 billion, was in Hillsborough County.
"I think we’re seeing a continuation of the trend we’ve seen over the past few years of a steady and healthy real estate market," said Hillsborough County Property Appraiser Bob Henriquez. "With inventory so low in the resale market, there has been a ton of new construction in south county."
Higher taxable values mean property owners will pay more in taxes even if local governments keep the same tax rates.
For example, based on 2017 tax rates, Hillsborough County would collect an extra $45 million for its general fund and about $20.1 million for services like water, sewer, road maintenance and trash pickup in the unincorporated areas.
"We haven’t seen those levels since 2008," Hillsborough County Administrator Mike Merrill said. "We don’t believe that’s sustainable at all over the long run."
Plans for the additional revenue include affordable housing, school traffic safety projects and a program to improve the county’s foster care system.
The county is also planning to give $250,00 to a Children’s Board of Hillsborough County program that teaches young people to swim and more than $400,000 to Prodigy, a program that uses art and music to help low-income children develop life skills.
But mindful of a potential increase in the homestead exemption, which would cost Hillsborough more than $30 million per year, the focus is on one-time expenditures that the county is not committed to continuing.
"We were glad for the ability to do additional programs," Merrill said. "But we can’t plan on funding those on a recurring basis because of the uncertainty."
In Tampa, the increase in values will mean an extra $18.4 million in property tax revenues. Mayor Bob Buckhorn has not yet decided how to spend the extra money, said Sonya Little, Tampa’s chief financial officer.
The boost to St. Petersburg’s budget will be about $10.5 million, which will help narrow a projected budget deficit to $1.2 million, said Budget Director Liz Makofske.
The 8.5 percent increase in Pasco County will produce almost $16 million in additional revenue, said Dan Biles, county administrator.
"For us, it allows us to keep up with the demand for services," he said. "As people start making more calls to customer services, to the Sheriff’s Office, this allows us to meet some of those needs."
Taxable values have largely rebounded to their levels before the real estate crash that helped fuel the Great Recession, Henriquez said.
The crash wiped out billions of dollars in property value and cost local governments millions of dollars in revenue. Tampa officials estimate they lost $283.2 million in property taxes from 2008 through 2017.
While home values have recovered, the Save Our Homes cap means assessments for homeowners can’t grow by more than 3 percent a year or by the change in the Consumer Price Index, whichever is lower. A 10 percent cap on the assessed value of non-homesteaded properties has been in effect since 2009.
Henriquez said he doesn’t worry that the market is in danger of another collapse.
Before the last slump, total taxable values rose by more than 15 percent in 2005 and another 20 percent the following year.
"Clearly," he said, "it’s not what we saw just prior to the crash last time."
Staff writer Laurel Demkovich contributed to this report. Contact Christopher O’Donnell at codonnell@tampabay.com or (813) 226-3446. Follow @codonnell_Times.
Taxable property values, 2018
(In billions, compared to 2017)
Hillsborough: $85.7, up 10.23%
Pinellas: $74.7, up 8.48%
Pasco: $26.7, up 8.5%
Tampa: $31.1, up 10.4%
St. Petersburg: $17.9, up 10.3%
Source: Property appraiser’s offices