In the Tuesday Wall Street Journal, Professor Alan Blinder wrote of his puzzlement at the very slow growth of productivity in the last three years. There is really no mystery. The rate of growth of investment in...
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- Florida Governor Crist Tells Realtors to Get Ready for Ho...
Florida Governor Crist Tells Realtors to Get Ready for Housing Boom from Property Tax Cut
Always wanting to appear as standing up for the little guy (remember him as Attorney General fighting the "evils" of "price gouging" during hurricanes?), Florida Governor Charlie Crist rallied Realtors on Thursday to fight for his policies to lower property taxes and take on "greedy" insurance companies. From the Associated Press:
Gov. Charlie Crist urged real estate agents during a speech Thursday to rally support for a January ballot measure that will cut property taxes. He also repeatedly criticized the property insurance industry as tenacious and greedy.
Crist had a very receptive audience for the two issues he has promoted during his campaign last fall and since being elected governor in November, and he predicted agents will see significant results when he, lawmakers and voters work to bring down homeowners' costs.
"Florida's going to have a sonic boom when this happens. You're going to be busier than you've been in your life," Crist told 550 agents at the Florida Association of Realtors' annual convention. "Get ready, get your rest, make sure your license is up to date."
The governor predicted that boom will take place after the Jan. 29 election, when voters will vote on a property tax constitutional amendment on the Jan. 29 presidential primary ballot.
The proposal phases out the "Save Our Homes" property tax cap on primary homes and instead would give existing homeowners the choice of keeping their Save Our Homes benefits or trading them for a "super exemption:" 75 percent off the first $200,000 of a home's value and 15 percent off the next $300,000.
So the governor wants to cap insurance rates in the state and cut property taxes in order to spur the housing market. While his populist rhetoric may sound good to voters, all he is doing is criticizing one special interest while he rallies support from another.
Property taxes should be determined so as to fund local public services and should have nothing to do with trying to bulster any one segment of the economy, regardless of who is behind it, or how effective it would even be.
Also, it's funny that the governor would accuse the insurance industry of excessively high profits when, from 2000 through 2006, some of the biggest profits were earned by home builders and real estate companies. Were they gouging home buyers when they constructed all those mansions and took their commissions? What is "too high" according to Crist? We don't see Gov. Crist going after the real estate industry, which despite its supposed free entry is actually one of the most anti-competitive industries in the country -- probably more so than the insurance sector. Check out this piece from the AEI-Brookings Joint Center on competition in real estate: http://aei-brookings.org/publications/abstract.php?pid=1119.
We'll wait to see if Gov. Crist is consistent and supports policies that create more competition amongst the real estate sector in order to spur the housing market too. We'll also see if the governor is consistent and decides to cap real estate commissions. We won't hold our breath.
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