NEW YORK (CNNMoney.com) -- Home prices fell 6.7 percent in October, compared with a year ago, according to the S&P/Case-Shiller 10-city home-price index, a record drop as housing markets continued to deteriorate.
It was the largest drop in more than 16 years and marked the 10th consecutive month of price depreciation and 23 months of decelerating returns.
"No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," said Robert J. Shiller, chief economist at MacroMarkets in a release.
Case-Shiller's 20-city index fell 6.1 percent. Shiller noted that 11 of the markets in the 20-city index posted a record fall.
Some economists are beginning to lower their expectations for housing markets, predicting a longer and deeper price slump than they had previously forecast.
Several factors are hurting markets: Inventories are high with an 11-month supply of homes already for sale; a spike in foreclosures has added to the supply; and there are many vacant homes on the market, which tend to have very motivated sellers, depressing prices more quickly.
Miami was hit with a 12.4 percent decline in the month, the most of any area. Tampa fell 11.8 percent and Detroit, 11.2 percent.
Only Charlotte, N.C. (4.3 percent), Portland, Ore. (1.1 percent) and Seattle (3.3 percent) showed positive price growth.
Brooklyn housekeeper Rita Dobrer was swept up in South Florida's real estate frenzy, using $600,000 from a jury award as deposits on six condominiums in two Miami projects in 2005.
Dobrer said she never had the intention, let alone the financial ability, to buy the six condos -- which cost about $3 million. Rather, she claimed she was enticed by the developer's verbal guarantees that she could reap $600,000 in profits by selling the units without ever taking ownership.
Dobrer's hopes for a windfall, though, have cratered in the ailing residential real estate market. Unable to flip the units, Dobrer joined 35 other Russian immigrants in New York, New Jersey and Florida who on Friday sued Miami developer The Related Group for the return of the deposits on units in Miami's 50 Biscayne and Bal Harbour's Harbour House.
The allegation the condos were pitched as investment opportunities marks the latest twist in a mushrooming problem: buyers seeking to get out of contracts. Buyers have pounced on changes in units sizes, interior improvements, condo budgets and completion dates as reasons for escaping contracts.
Developers are facing dozens of lawsuits, if not more, from buyers, and the pace appears to be picking up as projects near completion.
''It's starting to snowball,'' said real estate analyst Jack McCabe in Deerfield Beach.
Developers aren't inclined to let buyers out of purchases, though. A Fort Lauderdale lawyer sued 22 town-house buyers in Fort Myers on behalf of a developer seeking to force them to close on their contracts -- even though they were willing to walk away without their deposits.
Related Group is fighting back, as well.
Miami lawyer Susan Mortensen, who is defending Related and other developers in similar suits, said many of the buyers who profited in the housing boom are unwilling to participate in the market's downturn.
''They are really profiteers. They are not victimized consumers,'' Mortensen said.
Aventura lawyer Robert H. Cooper, who filed two suits against Related on Friday, said developers shouldn't be surprised about the predicament they're in because they created it.
''They were, across the board, signing contracts with purchasers they knew did not have the ability to consummate the transaction,'' Cooper said.
''I'm a housekeeper,'' Dobrer added. ``Who would give me a mortgage for $2 [million] or $3 million?''
If what Dobrer says is true, McCabe said it would illustrate just how speculative the condo-building boom in South Florida became. In essence, it would mean developers relied in part on shell buyers to meet presale requirements and qualify for construction funding.
Dobrer said Related wouldn't allow her to buy four units in her name at Harbour House for that very reason. So Dobrer said she, her two daughters, and sister each bought units with the proceeds from her court winnings from a car accident. Dobrer bought two units in 50 Biscayne.
''The question for the developer would be, how could you accept contracts from a housekeeper who obviously didn't have the income or the wherewithal to close -- unless you were guaranteeing she could flip them for a profit?'' McCabe said.
Mortensen wouldn't say whether Related did any income verification or credit check of potential buyers.
''Purchasers have an independent responsibility to look after their own financial affairs,'' she said.
As for allegations that buyers were told they could flip their units for a profit without purchasing them, Mortensen said they either signed or initialed contracts that acknowledged no such representations were ever made.
Responded Cooper: ``Everyone in real life knows that verbal sales tactics and presentations are what people base their decisions on, not the fine print on the back of the contract.''
Related wooed buyers with buffet dinners at a fancy Russian restaurant in New York, recalled Irina Herman, a real estate agent who has joined the Harbour House suit to get her $127,000 deposit back. She wanted to buy the $635,000 condo as an investment, saying the sales representative told her she could make $100,000.
Efim Mekler, a retired painting contractor in New York, put deposits of $238,000 on two Harbour House units priced at $689,000 and $450,000. He planned to sell the smaller unit.
''You'll sell it like that,'' he said he was told. ''This sale is going to go like hot knishes.'' He said he can afford to close on the units but refuses.
The lawsuits allege Related needed to register its condominiums as investments before pitching units to New York buyers, as required by New York state law.
The purpose of the law is to ensure prospective buyers have detailed information to make a reasoned judgment about whether to buy.
The plaintiffs also assert that Related made ''material'' changes to the contracts that were ''adverse'' to them. For instance, Herman contends her unit in Harbour House is about 100 square feet smaller than the 1,156-square-foot unit she agreed to buy.
Miami Herald staff writer Matthew Haggman contributed to this report.
http://www.miamiherald.com/business/story/294125.html
The two women who stopped by her Coconut Creek home knew the 55-year-old widow was behind on her mortgage payments and facing foreclosure.
They promised help. For a fee, they would arrange the sale of Gainer's home so that she could stay there, paying rent. With the foreclosure halted, Gainer would get credit counseling and, after a year, a new mortgage and her home back in her name. She agreed.
Now, the Broward County schoolteacher and more than a dozen other homeowners contend in interviews and court filings that two companies -- National Foreclosure Management and American Home Rescue -- promised to save them from foreclosure but sucked out their home equity through excessive fees, what they claim is a fraud known as equity stripping. Then, they say, the firms skipped out, leaving owners scrambling again to prevent foreclosure on new, higher mortgages.
George Castrataro, a Broward legal-aid attorney representing Gainer and several other alleged victims, said he found $532,000 in questionable closing expenses in a review of 12 National Foreclosure deals alone.
Florida's attorney general is investigating the two companies. Sandi Copes, attorney general spokeswoman, declined to discuss the probe, but said it's being ``pursued actively.''
Mortgage fraud that flourished along with Florida's real-estate market in the past few years has many variations -- loan applicants who fudge their income to qualify for a higher-priced home, scam brokers who flip homes among fake buyers, pocketing the mortgage proceeds. But equity stripping, regulators and lawyers say, is especially pernicious because it preys on desperate homeowners looking for any solution that will stave off foreclosure and keep them in their homes.
WARNING ON PRACTICES
U.S. AND SOME STATES
STEP INTO THE ARENA
The U.S. Department of Housing and Urban Development has warned homeowners to avoid firms specializing in foreclosure prevention, and some states have cracked down on rescue operations: New York passed legislation in February to stamp out the practice, and Massachusetts temporarily banned for-profit rescue firms. Florida has no specific law addressing foreclosure prevention.
''Conditions are perfect for foreclosure rescue scams right now,'' said Lauren Saunders, managing director of the National Consumer Law Center's Washington, D.C., office. ``It has been around for a long time, but it really blossoms when people have equity in their homes and mortgages they cannot afford.''
South Florida is fertile ground. Despite the slowdown after years of zooming prices, home values are still much higher than they were three or four years ago. This means homeowners have accumulated significant equity. Meanwhile, many South Florida homeowners took out bigger and riskier mortgages than they could handle.
One result is the proliferation of equity-stripping scams, which homeowners lawyer Castrataro, of Legal Aid Service of Broward County, calls ''an epidemic.'' Between the Plantation law office and its sister agency, Coast to Coast Legal Aid of South Florida, an average of six or seven new equitystripping cases arrive each week. The companies fingered frequently, Castrataro said: National Foreclosure and American Home Rescue.
National Foreclosure shut down last September. Wyman Roberts, its former president, declined to comment. Bernard Williams, National Foreclosure's registered agent and president of American Home Rescue, denies that the companies were doing anything wrong. ''We wanted to do the right thing by people, but that business is just like a quagmire,'' he said.
''These people come to you with problems and you resolve the problems, and then they resort to the same mind-set that got them into their problems,'' he said. ``They have bad habits and continue to have bad habits.''
HOMEOWNER PROFILE
EQUITY HAS GROWN;
SO HAVE MONEY WOES
To work, equity stripping requires a certain kind of homeowner: those who have built-up equity in their homes, yet are struggling to pay their mortgages. Kayhlene Gainer fit the bill.
She bought the five-bedroom house in Coconut Creek in 1999 for $155,400, using money from a settlement in a personal-injury lawsuit involving her late husband.
But after Gainer's daughter, Faith, went to college in 2004, tuition bills presented a big new expense. Then she had several unexpected, pricey car repairs.
''It all cost me more than I thought it would,'' Gainer said.
Enter National Foreclosure Management. The Miami Lakes firm opened in December 2004, state records show. Wyman Roberts was president. Bernard Williams, registered agent, also was a branch manager for Southeast Capital Mortgage, a brokerage that shared National Foreclosure's offices.
The firm obtained weekly lists of homes set for foreclosure from county courts. It recruited ''field analysts'' to go door-to-door, hawking its ''home saver'' program. At National Foreclosure's peak, more than 60 people fanned out into South Florida neighborhoods, Williams said.
The field analyst who knocked on Gainer's door in April 2005 was Lakeisha Marion from National Foreclosure Management. Marion later worked for American Home Rescue.
She made $4,000 each time a homeowner signed up, said Marion, who left the company after a financial dispute with Williams. She closed one to three deals a month.
On Saturdays, field analysts piled into National Foreclosure's Miami Lakes office to discuss strategy and to role-play, honing their sales skills. There ''would be people in the hallway,'' Marion said. They included teachers and even police officers, seeking to make extra money in off hours, she said.
In mailings to homeowners, the firm pledged to ensure ''that you regain full rights and ownership to your home.'' It offered to equip clients ``with the necessary tools need[ed] to improve your financial planning skills.''
For Gainer, Marion's pitch sounded heaven-sent. Marion promised to stop foreclosure proceedings and to provide more than $10,000 cash upfront, financial planning courses, and payment of her taxes and insurance for the year.
'INVESTORS' INVOLVED
NAMES AND CREDIT
ARE LOANED FOR A FEE
Once National Foreclosure found willing homeowners, it matched them with ''investors'' willing to act as buyers. These investors rarely saw the homes they were buying, but lent their names and credit for a fee, with the understanding that the original homeowner would take the home back in a year.
Some straw buyers say they were victims, too, their credit ruined because the foreclosure rescue firm told them the homeowner was making the loan payments.
Zobeida Perez of Miami was the investor who bought Gainer's home. Perez did not return calls seeking comment, but her lawyer, Charles Simon, said Perez made $5,000 for lending her name and credit to the Coconut Creek house for a year.
''She saw a way to make quick money,'' said Simon, who declined to offer further details about Perez's involvement. ``She's a victim in this. She did this innocently.''
Less than a week after meeting Marion, Gainer says, she met with Williams and Roberts at their office on Miami Lakes Drive. She recalls gold-leaf certificates on the wall, touting the home rescue program.
It all made sense to Gainer. On April 22, 2005, she signed the papers, selling her home to Perez for $298,000. Her mortgage balance: $187,791.
But Gainer didn't study her closing statement carefully. If she had, she would have noticed that much of the $108,209 profit was eaten up by fees.
Those included a line item for ''seller held mortgage,'' which she says she never took out, for $59,600. Another line item: ''3 percent sellers contribution to buyer'' for $8,940. There are two ''poc'' line items, or ''paid outside closing,'' totaling $7,556. Total fees: $76,096.
Separate settlement charges came to $24,003, 8 percent of the purchase price. A typical percentage is between 3 and 5.
Those high fees and unexplained charges are how Gainer's equity was ''stripped,'' her lawyer says.
Williams declined to comment on Gainer's specific equity-stripping claims, saying Roberts was in charge. He did say the typical fee charged at closing was $15,000.
UNWELCOME SURPRISE
SELLER SAYS PROMISES
WERE NOT FULFILLED
Disappointments came immediately. Williams and Roberts said the upfront cash initially promised wouldn't be paid because ''when they did the real figures, there was no money left,'' Gainer said.
Weeks passed, and her concerns mounted. Promised credit counseling and financial-planning courses had not been scheduled. She called Williams and Roberts, but 'they kept saying, `Someone will call you, someone will call you,' '' she said.
She gave up, but kept sending her $1,575 monthly rent to National Foreclosure.
In April 2006, a year after signing, she tried to arrange to put the house back under her name, as the agreement spelled out.
Roberts told her it would be easy, she recalled. But when she arrived in Miami Lakes for an appointment, he didn't show up, she said.
Then, in the fall of 2006, came a huge blow: a letter from National Foreclosure Management saying it was shutting down. The buyer, Perez, who had never met Gainer but legally owned her home, showed up unannounced at the schoolteacher's house. Perez said the property's mortgage had not been paid and the lender was foreclosing.
''All along, I had been making monthly payments to NFM for rent,'' Gainer said. ``Evidently, they were not paying the mortgage on it. But I had no idea what was going on because the mortgage was not in my name.''
homeowner
But getting the house back was no simple task. Now she had a mortgage bigger than $250,000 to satisfyTaxes and insurance hadn't been paid. Gainer had to buy her house again at a higher price.
Perez, meanwhile, was getting impatient. While Gainer cobbled together financing, Perez feared that foreclosure would ruin her credit. She, too, felt duped, claiming she was told that Gainer would pay the mortgage, her lawyer said. In March, she sued in Broward Circuit Court to evict Gainer and her family.
Gainer again begged Bernard Williams for help. But by then, Williams had moved to American Home Rescue. He recommended a lawyer to Gainer, but Gainer and the lawyer never spoke.
A week before her final eviction hearing, the increasingly desperate Gainer turned to the Rev. Glenn Bostic, a Broward religious and social activist she knew. Bostic, in turn, took her to visit Legal Aid Service of Broward County, where Castrataro agreed to take her case.
After the judge heard the fraud allegation, he and Perez agreed April 19 to allow Gainer more time to pay off Perez's mortgage. Two people have ''gotten screwed in this deal,'' Perez's lawyer, Simon, told the court.
CASE STILL UNFOLDING
FORMER OWNER, BUYER
WALK SEPARATE PATHS
Four months later, Gainer is still struggling to get financing together to pay the mortgage.
Perez is going to court later this month to try to enforce the settlement.
Williams said Wyman Roberts opened a home rescue operation in Tennessee for a time. It's not known where he is now.
Williams said he has gotten out of the foreclosure prevention business. He wrote to investors, field analysts and former homeowners June 23 that American Home Rescue was closing.
''Changes in the mortgage industry and the foreclosure market'' were forcing the company to ''discontinue operations,'' Williams' letter said.
He is now taking on a new real-estate venture, in a new location that has had its own share of distressed homeowners.
''I've gone to New Orleans,'' Williams said.
Two years after local leaders unveiled plans for a massive biotech park in Liberty City, Miami-Dade County on Tuesday killed the deal, severed ties with the developer and vowed to recover public money spent on the troubled project.
County Manager George Burgess sent a letter Tuesday to companies controlled by Boston developer Dennis Stackhouse, saying his firms defaulted on county contracts and a 75-year lease on county land by failing to provide crucial documents about the biotech park.
In a memo to Mayor Carlos Alvarez, the manager raised serious concerns about the validity of key tenants that were to lease space in the park while creating thousands of jobs for urban residents.
''The developer has missed deadlines that place him in default,'' Burgess said. ``The leases and letter of intent are highly suspect.''
In an investigative series that began Sunday, The Miami Herald exposed widespread breakdowns in oversight of the biotech park by the county and the Empowerment Trust, a county-funded agency charged with monitoring the project.
Though millions of dollars have been spent on the project, not a single building has gone up.
Tuesday's move kills an agreement approved by the County Commission in January that pledged $23 million toward a parking garage to be built along with three other buildings -- the first phase of a highly touted development slated to be larger than Miami's AmericanAirlines Arena.
As the county took action against the developer, the Miami-Dade state attorney's office and the Miami-Dade Police Department launched a criminal investigation into questionable spending surrounding the park.
The Miami Herald reported Stackhouse diverted more than $500,000 from the biotech park through doubling billings and dubious expenses while paying a host of political insiders to drum up support for the project.
Among them: former U.S. Rep. Carrie Meek, who received at least $40,000, a leased car and a free office for her foundation while her son, U.S. Rep. Kendrick Meek, moved to secure federal dollars for the biotech park.
Kendrick Meek wrote a letter to the mayor Monday questioning the county's oversight of the project and demanding an end to federal funds for the developer.
That prompted a strongly worded response on Tuesday from Alvarez, who pointed to the congressman's two-year role in the biotech park, including his involvement in an organization that provided Stackhouse's companies with millions of dollars.
''As the former chair of the Task Force on Urban Economic Revitalization between 2002-2005 . . . you are undoubtedly aware of the loan review process and how funding is allocated,'' the mayor wrote.
With Meek as chairman, the economic task force approved two loans to Stackhouse companies totaling more than $5 million. Those companies now owe more than $200,000 in late payments, The Miami Herald found.
The demise of the biotech park is the latest in a long series of failures at Poinciana Industrial Park, a vast collection of empty lots set aside for economic development after a riot in 1980.
Since 1982, the county has spent millions trying to lure jobs and businesses to the area, in decline for decades.
In 2001, the county named the Empowerment Trust the master developer of Poinciana, but the county manager is now moving to break ties with the agency, which is run by county employees.
''We have concerns about the pace of several capital programs undertaken by [the] Empowerment Trust, the level and type of investments, and general operations,'' Burgess wrote in his memo to Alvarez.
Aundra Wallace, CEO of the trust, could not be reached for comment.
Records show the agency failed to keep track of millions of dollars set aside for the biotech park, including a $3 million interest-free loan the trust provided to a Stackhouse company in 2006.
The loan -- funded with federal money -- was provided to Stackhouse without any security, raising question about how the county can recover the money.
Questions also abound over issues surrounding the status of county land at Poinciana. Stackhouse secured a $4.2 million loan from a private lender in 2005 using the land as collateral -- with county officials allowing the private lender top priority for any funds recovered.
Miami-Dade Commissioner Joe Martinez, who voted against the parking lot deal earlier this year, blamed the Alvarez administration and staff at the Empowerment Trust for lax oversight.
''The project never should have gone forth,'' he said. ``It seems staff did not do due diligence.''
He said commissioners only learned the back story -- including Stackhouse's history of financial woes -- after reading the newspaper's series this week.
County Commissioner Dorrin Rolle, an ardent supporter of the biotech project and the $23 million parking garage deal, said the paper's findings should be examined.
''Recent news articles regarding questionable oversight at Poinciana Industrial Park clearly requires investigation and a thorough report from county staff,'' he said in a written statment.
Miami Herald staff writer Matthew I. Pinzur contributed to this report.
In case you haven't heard, a new tax plan for Florida property owners is in the final stages of the approval process. This could mean a huge savings for some, but not everyone. Here's a few questions and answers about what's to come...
Q: How soon will my taxes be cut?
A: It will be months before you actually see savings. Lawmakers passed a bill that requires cities, counties and special taxing districts to roll back their taxes to last year's levels, plus an additional cut. Miami-Dade County government has to cut back an additional 9 percent, Broward 5 percent and Monroe 3 percent.
Homeowners will find out in November, when they get their new tax bills, how much they are saving. They will get an idea in August, though, when tax notices go out alerting property owners to the tax rates cities and counties plan to adopt.
The rollback does not apply to property taxes charged by school districts, which make up 30 to 40 percent of the tax bill.
If voters approve a constitutional amendment in January that expands Florida's homestead exemption, homeowners would see those additional savings on the tax bill they receive in November 2008.
Q: Can cities and counties get around the rollback?
A: Yes, but it will be difficult and costly. It will take a supermajority or unanimous vote by the local governing board, or even a public referendum, depending on how far a local government wants to go beyond rollback rates. Governments that violate rollback provisions will forfeit millions in state money.
Q: Will I get a tax refund?
A: No. Your annual tax bill will go down in the future.
Q: How are homestead exemptions changing?
A: Florida's traditional $25,000 homestead exemption will remain unchanged unless 60 percent of voters approve the constitutional amendment Jan. 29. If this happens, Florida homeowners who now have homestead exemptions may choose between the new ''super-sized'' exemption or the tax breaks they currently enjoy, including the $25,000 exemption and the Save Our Homes tax break, which caps increases on the annual assessment to 3 percent.
Those who choose the super-sized exemption can shield up to $195,000 of the value of their home.
Q: Why would I want to keep the Save Our Homes caps?
A: People who have owned homes for years and have seen their market value rise may do better staying with Save Our Homes. Let's say you bought a home 10 years ago, and your taxable value is $200,000, but the appraised value is higher, say $500,000. Under Save Our Homes, you pay taxes on $175,000 -- $200,000 minus your homestead exemption of $25,000. Under the new exemptions, you would pay taxes on the higher amount -- $500,000, minus the $195,000 exemption, or $305,000.
Q: How does the super-sized exemption work?
A: It is based on the value of your home as determined by the county property appraiser, which the Legislature calls the ''just value.'' In some places, Miami-Dade County among them, it is called ''market value,'' though that number is usually somewhat below the real price the home would get if sold.
For the first $200,000 in value, 75 percent is shielded from taxation. Between $200,000 and $500,000, a homeowner gets another 15 percent exemption. There are no additional exemptions above $500,000 now. But the $500,000 threshold would automatically grow each year by the same percent personal income grows.
Each homeowner under the plan is guaranteed a minimum exemption of $50,000, while the maximum exemption is $195,000. Low-income seniors will get a minimum exemption of $100,000.
Cities, counties and schools will be able to charge taxes only on the amount of your home that is not shielded from taxation.
Q: How do I get the super-sized exemption?
A: If the amendment passes, homeowners who now enjoy the Save Our Homes protection must make a one-time ''irrevocable election'' to receive the super-sized exemption. Otherwise they remain under the Save Our Homes caps as long as they own their home. If the amendment passes, anyone who buys a home on Jan. 1, 2008, or after will not be eligible for Save Our Homes and would receive the super-sized exemption.
Q: Why has there been controversy over the impact on schools?
A: Though school districts are exempt from the property tax rollbacks and cuts, they would be affected if the constitutional amendment passes. School districts, like any other local government, would be able to tax only the portion of a home's value not protected by the super-sized exemption. Lawmakers estimate this could cost schools statewide up to $7.2 billion over four years.
Republican lawmakers say the Legislature will find a way to make up that money for schools, but they did not say how.
Q: If the amendment passes and I choose to keep the Save Our Homes caps on my home, what happens when I sell it and buy another main home in Florida?
A: If you buy your home on Jan. 1 or after, you will not have Save Our Homes on the new home, you'll have the super-size exemption. That's how the Legislature plans to gradually phase out Save Our Homes.
Q: Does the super-sized exemption apply to second homes, rental homes or businesses?
A: No. It applies only to the primary homestead.
Q: What tax breaks do businesses, owners of rental property and second homes receive?
A: Their biggest tax break will come from this year's mandatory tax rollback. The constitutional amendment, however, exempts businesses from paying tangible personal property taxes on equipment if they own less than $25,000 worth. The amendment also gives the Legislature the power to pass tax breaks in the future for waterfront property used for commercial purposes or public access and for affordable housing.
Q: What happens to low-income seniors?
A: The proposed constitutional amendment would guarantee that those 65 years and older who verify that they are poor are eligible for at least a $100,000 exemption on their home. Plus, low-income seniors would continue to be eligible for additional exemptions that are now offered by cities and counties. The amendment does not change the provision that lets cities and counties offer an additional $50,000 worth of exemptions.
In a poll with Miami Agent Magazine... See what Nicole Sauer had to say!
The most recent proposal to help homeowners lower thier property taxes just might work for us. The previous proposal suggested completely ommiting property taxes for homeowners' primary residences and then raising sales taxes in order to allow the city to maintain it's budget. It sounds extreme because it is. The new plan proposed by the Democrats seems to be right on track. Read below and tell me what you think!
The battle of the property-tax cut proposals intensified Wednesday, with Democrats in the state House rolling out a plan for a steep hike in the homestead exemption and their GOP counterparts backpedaling from a controversial measure to sharply roll back -- and eventually kill -- local property taxes.
As Democrats described their idea as a ''surgical'' cut that spares cities and counties from the deep budget cuts proposed by House Republicans, Speaker Marco Rubio backed off a key piece of his proposal.
At a meeting with city and county officials from Miami-Dade County, Rubio announced he still wants to eliminate property taxes on all primary homes and replace it with a 2.5 cent increase in the sales tax. But rather than use the 2000-01 budget as the base for budget cuts, he now prefers to use the 2003-04 budget as the base and avoid budget cuts altogether, if possible, by changing the way counties assess property.
''I prefer to do this because the hit is less and it does away with the inequities,'' Rubio told members of the West Miami and Hialeah city councils and Miami-Dade Commissioners Rebeca Sosa, Bruno Barreiro, Carlos Gimenez, Sally Heyman and Katy Sorenson.
Because the GOP House plan does away with property taxes on homesteaded property, it eliminates inequities caused by the Save Our Homes Act, which charges neighbors with similar homes vastly different tax rates.
Meanwhile, House Democrats voted unanimously to endorse a solution that leaves much of the current property tax system in place -- including the Save Our Homes cap on tax assessments -- but gives homeowners heftier exemptions. The tax cuts would help middle- and working-class homeowners, renters and small businesses, proponents said.
Under the Democrats' plan, the state would base tax exemptions on the median assessed value for single-family homes in each county. Owners of primary homes would get a homestead exemption equal to half that amount, plus the existing $25,000 exemption.
For example, in Miami-Dade County, the median assessed value of a single-family home is $226,580, so homeowners would, at a minimum, receive an exemption of $113,290 plus $25,000, for a total of $138,290. In Broward County, the median assessed value is $230,730, so homeowners could get a minimum exemption of $140,365.
Homeowners whose property taxes under the current Save Our Homes system are lower than under the new proposal would get to keep the lower tax.
Commercial property owners would get a tax break, equal to 25 percent of the median assessed value of similar property in the county. The tax would apply to the first $1 million of value, and the tax break would be capped at $250,000. Owners of rental property would be required to pass along the savings to renters, at a rate to be determined by each county.
''This brings portability and tax relief -- that's why this thing's so fair,'' said Rep. Jack Seiler, a Wilton Manors Democrat and an author of the Democratic plan.
After being briefed by Seiler and House Democratic Leader Dan Gelber, Broward County Commissioner Sue Gunzberger said the idea is ``much better than what we've been looking at.''
Seiler said the plan also offers one big advantage over the Republican proposal: It doesn't treat rich and poor alike. Under the Republican plan, for example, radio talk-show host Rush Limbaugh would get a $424,423 tax break on his Palm Beach mansion. Under the Democratic plan, Limbaugh's tax break would be closer to $130,000.
The competing tax ideas emerged a week after Rubio declared local government spending was out of control and needed to be tamed with severe budget cuts.
Since then, many local governments warned that the cuts would sever critical local services, and some House Republicans retreated.
Rubio said he will not abandon his original plan altogether, saying he believes there is still support for rolling back local budgets by $5.8 billion statewide.
Rubio urged the local officials to help push for his new version, which would allow the state to swap property taxes for a 2.5 cent hike in the state sales tax.
Among the other changes in his the new version: Renters would get property tax relief and taxes on commercial and nonhomesteaded property would be reduced to 2003-04 levels and capped into the future under a formula that takes into account inflation and population growth. Businesses also would get a $25,000 exemption on tangible personal property, and the poorest counties would be exempt from any budget cuts.
Hialeah Mayor Julio Robaina said Rubio's alternative plan might work. Barreiro said there should be ''zero rollback.'' But all agreed that tax changes are needed.
Robaina said he and members of the Florida Association of Counties and the Florida League of Cities have been trying to craft a fair formula to divide up tax revenue from the 2.5-cent sales-tax increase and send it back to counties.
That formula, Rubio said, will be the key to passing the House Republican plan.
''If you can't design it, it can't be done,'' he said.
Why Get An Inspection? | Title Information | Tax Closing Costs | 500 Brickell | Mirador Condo Conversion | Phone Numbers of Interest: | Paramount Bay | Mondrian South Beach | Closing Costs | Looking to Buy? | Download Adobe Acrobat | Environmental Issues | News | Real Estate Glossary | Our Properties | Our Featured Homes | Search Homes / REALTOR.COM® | Home | The Bi-Weekly Mortgage | Mortgage Saving Tips | Your Downpayment | Housing Finance Agencies | Your Buying Power | Writing the Offer | Loan Programs | Mortgage Shopping | Locking in Rates | Staying Approved | Neighborhood Prices | Staging Your Home | 9 Steps to Owning | Seller Paid Closing | Bi-weekly Pmt Calc | ARM Calc | APR Calc | Fixed Rate Mtg Calc | Mortgage Points Calc | 15 vs 30 Year Mtg Calc | Mtg Tax Savings Calc | Balloon Mortgage Calc | ARM vs Fixed Rate Calc | Mortgage Qualifier Calc | Required Income Calc | Maximum Mortgage Calc | Mortgage Payoff Calc | Rent vs Buy Calc | Refi Interest Savings Calc | Refi Breakeven Calc | Mortgage Calculators | Request Industry Info | Reasons homes don't sell | Buying Foreclosures/REO's | Types of Listing Contracts | The Listing Contract | Contingencies in Contracts | Listing Commissions | Need a Bridge Loan? | What's Earnest Money? | Role of the MLS | Improvements That Pay | Selling One, Buying Another | Miami Beach BLOG
Copyright © 2008 Sports + Entertainment RealtyPortions Copyright © 2008 a la mode, inc.Another XSite by a la mode, inc. | Terms of Use| Site MapAll rate, payment, and area information are estimates and approximations only.