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Editorial: How to prevent the next housing bubble

After a punishing economic recession, the stronger signs in Tampa Bay's housing market are a welcome relief. Increasing home sales, new housing starts and rising prices and values are boosting the outlook for jobs, household income and the tax base. But the real estate collapse offers a cautionary tale, and state and local governments should avoid repeating the very policies that fueled the market bubble, its eventual bust and sprawl from overbuilding that continues to cost taxpayers.

An analysis last week by the Tampa Bay Times' Drew Harwell shows good news nearly across the board. More than 35,000 homes sold in Tampa Bay last year, the most since 2005. The median home sold for $155,000, the highest price since 2008. And rising prices have helped to increase the percentage of homes with equity and the number of homes for sale. While the bay area is still one of the foreclosure capitals of the nation, the housing market is healthier and fewer properties are changing hands under fire-sale conditions.

As the housing market recovers, officials should better manage growth this time around. That requires bringing local regulatory agencies up to speed and smarter planning to push new growth toward urban areas where roads, utilities and other infrastructure already exist. Local governments in the area responded to the recession by cutting staff for permitting and development review. With construction on the rise, there are signs some are now overwhelmed with proposed projects to review. Moving too quickly to handle the rush can result in short-sighted decisions with long-term ramifications.

Area governments also need to revisit the incentives they offered to prime the pump. During the recession, bay area communities waived property taxes, cut impact and permitting fees, fast-tracked the regulatory process and offered millions of dollars in tax incentives to bring new business to the region. With the market stabilizing, officials should target that money much more strategically. Two-thirds of new single-family homes started in this market last year were in Hillsborough's southern and eastern suburbs; one-quarter were in Pasco County's newer, sprawling subdivisions. These development patterns make it more costly to deliver public services.

Officials also need to acknowledge the economic recovery will likely continue to be gradual and unpredictable. While several developments strike a positive outlook — such as the big push by Sarasota-based builder Neal Communities to venture north into Hillsborough's new-home market — the fundamentals of the region's job, housing and income pictures have not dramatically improved. The Tampa Bay area is still struggling to diversify its economic base, modernize its transportation system and build a regional identity. The urgency to make a full economic recovery cannot sacrifice smart urban planning and be allowed to create the suburban sprawl that fueled the region's growth in the past.

Editorial: How to prevent the next housing bubble 01/10/14 [Last modified: Monday, January 13, 2014 12:30pm]
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