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Housing slump slams Hernando economy

BROOKSVILLE — This sprawling retiree and bedroom community that quadrupled in population since 1980 has been staggered by a building bust that reduced it to one of the state's hardest-hit communities.

Thousands are jobless and struggling to make ends meet in a county that ranks near the top of many gloomy economic indicators.

"I don't want to go on food stamps. I want to support my family," said Misael Sosa, an unemployed electrician who moved here with his family four years ago when jobs sprouted as fast as houses. "It's scary. I have a wife, three kids, a mortgage and bills. I don't know what we're going to do if I can't find a job."

Statewide figures reflect Hernando's pain. The county has:

• The second-highest increase in the number of households receiving food stamps from May 2007 to May 2008, at 58 percent.

• The third-highest unemployment rate in April, at 6.6 percent.

• The fourth-highest rate of foreclosures in May from the previous year.

• The fifth-highest jump in students receiving free or reduced-price school lunches from March 2007 to March 2008.

It's a steep decline for a county touted just a few years ago as a great place to live — rolling hills, forests and farmland on the east side, affordable suburban housing on the west side and a scenic coastline.

In 2005, single-family home building set a record. County development staffers worked Saturdays to meet the demand.

For all of 2008, county officials expect to see as many new homes built as they did in a single month during the boom.

Like many, Sosa rode the housing tide, working for subcontractors. Now the 47-year-old is one of more than 4,000 Hernando residents out of work. One morning this week, he piled into his dented Chevy Silverado and drove across two counties looking for a job.

His reversal of fortunes speaks to the primary reason behind the county's downfall: the collapse of its one-dimensional construction-based economy.

"When you're running at that huge of a height, you're going to fall pretty hard," said economist William Fruth, who has studied the Hernando economy.

It's a problem Michael McHugh, the county's business development director, faces daily. As the county's promoter, McHugh acknowledged that many folks are without jobs, but he isn't discouraged.

He believes that the county's unemployment rate is skewed because it doesn't factor in employee-leasing companies that are located elsewhere but employ Hernando residents.

McHugh even suggested that high unemployment is a positive tool for business recruitment.

"It's an absolute double-edge sword," he said. "We love low unemployment, but … when people are looking at communities, some of them actually prefer an area with high unemployment."

Looking forward, he acknowledges that the county needs to diversify its economy with other types of industry and higher-paying jobs. The average annual wage hovered near $28,000 in 2007. But he cautioned that it isn't easy.

"There are fundamental things that take time to change," he said. "I don't know anyone who can change their economy overnight."

The state of the county's economy doesn't surprise Fruth, who two years ago predicted the result in a report for a local business group.

The Palm City consultant, who has analyzed local and state economies for 15 years, recognized that Hernando County's dependence on residential development created a glut of low-paying service jobs. Wal-Mart is the county's largest private employer.

According to his report, if Hernando were considered on its own, rather than part of the Tampa Bay area, its average wage would be at the very bottom of the 361 metropolitan areas in the country.

"The problem with an economy based on population growth is that it can't be sustained," Fruth said. "And nothing changes until there's a crisis."

The crisis is clear to officials such as Jean Rags, the county's health and human services director, who oversees public assistance programs.

From construction subcontractors to real estate agents, the number of people asking for help has steadily increased during the past year, Rags said. An estimated 30 people a day seek assistance.

"It can all be attributed to the fact that their number of hours have been reduced, and maybe they've lost their benefits," she said. "Or their position might have been eliminated altogether."

This is the case with Sosa. His job in Ocala wiring a new mall recently ended. The prospect of another paycheck seems as dim as relying on someone else to take care of his family.

For now, though, he'll have to figure out how to make it on a $275-a-week unemployment check. That's less than half of what he once brought home.

But Sosa hasn't given up yet. He plans to get back in his truck, which costs at least $100 to fill these days, and do some more job hunting.

"I have to find a job," he said. "I have to."

Chandra Broadwater can be reached at or (352) 754-1432. John Frank can be reached at or (352) 754-6114.

Hernando ranks at the top of the following categories in the Tampa Bay area. Here is how it compares in Florida:

Food stamps: Second-highest increase in number of households from May 2007 to May 2008, at 58 percent. State average increase: 21 percent.

Unemployment: Third-highest rate in April, at 6.6 percent. State average: 4.9 percent.

Foreclosures: Fourth-highest rate in May, or one in 154 households. State average: one in 228 households.

Students receiving free and reduced-price lunches: Fifth-highest gain from March 2007 to March 2008, at 28 percent. State average increase: 4.1 percent.

Sources: Florida Department of Children and Families; Florida Agency for Workforce Innovation; RealtyTrac; Florida Department of Education

Hernando's economy has spiraled downward as the home-building industry turned sour. Here are the number of permits issued for single-family homes.

2005: 4,185

2006: 2,787

2007: 807

2008: 134*

*Through May 31.

Source: Hernando County Development Department

Housing slump slams Hernando economy 06/20/08 [Last modified: Sunday, June 22, 2008 11:09pm]
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