Residential Woes overshadow federal incentives By KENT HOOVER
Small business indicators hit their lowest level in 17 years in January, and
many in South Florida worry that the economic stimulus package passed by
Congress won't do enough.
The National Federation of Independent Business' monthly Index of Small
Business Optimism fell 2.8 points in January to 91.8, the lowest reading
since January 1991. The index is based on a survey of small business owners.
"This January reading is more of a recession in expectations than in hard
economic data," NFIB Chief Economist William Dunkelberg said. "Hiring plans
and job openings are much stronger today than in 1991."
The stimulus package aims to fight off a recession by giving consumers more
money to spend and businesses more incentive to invest in new equipment.
Taxpayers should receive rebate checks from the federal government in May,
and businesses will be allowed to write off 50 percent of new capital
investments this year.
Congress also doubled the Section 179 expensing limit for small businesses
to $250,000. This break allows small businesses to write off investments in
new equipment immediately, instead of depreciating them over time. This
saves businesses money and the hassle of keeping depreciation records.
The limit on how big of an investment a small business can make and still
qualify for this break was increased to $800,000. This means the amount a
business can expense will be decreased by every dollar spent above $800,000.
A small business that makes a $1 million capital investment, for example,
will be able to expense $50,000 of it.
Jim Adinolfe, VP and CEO of Atlas Sign Industries in West Palm Beach, a $20
million manufacturing company, said the package will save money for some
businesses, but he is skeptical how much it will boost the economy.
"Many, many businesses are in a wait-and-see attitude,² he said. ³And, this
will not change until the economic landscape takes a decided turn for the
Businesses with healthy cash flow might use the incentives to position
themselves to prosper when the downturn ends, said Leigh Katzman, managing
partner of Katzman & Korr, which has offices in Fort Lauderdale and Boynton
Beach. "The accelerated depreciation will not help those companies that are
teetering financially, cannot make capital investments and need immediate
The NFIB survey found that 58 percent of small businesses reported capital
outlays over the past six months, but only 25 percent plan to make capital
expenditures in the next three to six months, a decline of five percentage
Six of Florida's largest metropolitan statistical areas are among the 25
U.S. regions with the highest foreclosure activity -- and Miami leads the
The latest RealtyTrac rankings are based on the percentage of total
households facing foreclosure. In Miami, 51,662 properties were in some
stage of foreclosure, up 106 percent over 2006 and representing more than
2.7 percent of the total market. That was enough to give Miami a No. 8
ranking, making it the worst for foreclosures in Florida.
Also in the top 10 was Fort Lauderdale, where 45,367 properties were in some
stage of foreclosure, up 110 percent from the year before. Orlando, which
had a 117.7 percent increase in foreclosure activity, finished 20th, just
behind Toledo, Ohio. It was immediately followed by West Palm Beach, where
18,561 properties were in some stage of foreclosure, up 88.9 percent from
the year before.
"As expected, the number of properties entering some stage of foreclosure in
2007 was up in the vast majority of the nation's 100 largest metro areas,
with 86 metros reporting increases from 2006," RealtyTrac CEO James J.
Saccacio said in a release. "Most of the metro areas with the highest
foreclosure rates were either cities like Stockton [Calif.] and Las Vegas,
which experienced meteoric growth and unsustainable price appreciation over
the past few years, or cities like Detroit, which are undergoing a more
widespread economic downturn along with higher unemployment rates."
Single mother and bus driver Tangelia Sands and her four children have moved
into Miami¹s first green affordable home built with public funds.
Developer Ario Lundy, principal of Palmetto Homes of Miami, which has
completed more than a dozen single-family homes in the city, built the
three-bedroom, two-bathroom home in Liberty City. The developer expects to
get silver Leadership in Energy and Environmental Design (LEED)
certification, which signifies the home meets the basic standards of
efficiency for usage of water, energy and materials. For the Sandses, the
green design is supposed to translate into smaller utility bills.
The Sandses qualified to buy the home under a city program requiring that
the family earn no more than 120 percent of the average median income. For a
family of five, including mom, $76,875 is the cap.
To help the Sandses buy the house, the city gave $78,000, the Miami-Dade
County Housing Finance Authority contributed $70,000, SunTrust Mortgage
provided $74,000 in financing and the Florida Housing Corp. provided
The city also conveyed the parcel to the developer to build the home, which
is priced at $225,000. Cost of construction for the 2,200-square-foot home
Christine Bermudez, a spokeswoman for the Miami Community Development
Department, said the idea of incorporating green design into the home was
not part of the development agenda from the start. It evolved organically
during discussions with the developer and the funding agencies.