Who: Jim Naugle, Mayor of Ft. Lauderdale, Fla.Where: Creolina’s, 209 SW 2nd Street, Ft. Lauderdale, Fla., January 29, 2008On the Menu: Chicken Proven?al, Bananas Foster and real estate buying opportunities.
Ft. Lauderdale has the oldest population of any major city in Florida. The Sunshine State’s median age is indeed about a year higher than the nation’s as a whole, and Broward County, which is mainly comprised of the city and its suburbs, is higher still.
But it’s not what you’d expect, given the state’s reputation as a haven for retirees. It is certainly nowhere around that of the nearby Century Village, a massive adult community, where the average resident is close to 80. In Ft. Lauderdale, it is a youthful 39.3 years. And as we set out to lunch, Ft. Lauderdale Mayor Jim Naugle shows little inclination to discuss his city as a great place to retire.
On the contrary, he wants to talk about the city’s vitality. Notably, of its success in attracting new businesses. If he mentions miles of waterways and beachfront properties that Ft. Lauderdale possesses, it is because he wants to boast about the fact that tourism has been displaced as the city’s top industry by yachting and boating. To be sure, there are still over 10 million tourists who come to the area every year, but docking, boat repair and boat building now contribute more money to the local economy and plenty of jobs. The Ft. Lauderdale international boat show is now bigger than the one in D?sseldorf, Naugle says proudly.
There is more. As we walk a few blocks to the bustling downtown restaurant area known as Himmarshee Village, Naugle points to other local attractions: the Art Museum, the Broward Center for the Performing Arts, the high-rise where former Dolphins quarterback Dan Marino owns a luxury condominium and the headquarters of AutoNation, the latest of the three Fortune 500 companies founded by local tycoon H. Wayne Huizenga.
Naugle may be a salesman of his city, but he also has a reputation for speaking his mind that transcends the confines of Southern Florida. When asked about advice he would want to give to people wishing to retire to Ft. Lauderdale, Naugle says gruffly:
“Bring a lot of money. We are a great place to live, but we ain’t cheap.”
Property values are high, and so are taxes. In addition, Florida residents are required to take out a variety of insurance policies, such as wind, flood and hurricane insurance, which people living in other parts of the country are spared.
“We are not trying to sell ourselves as a cheap place to live. We are not Celebration, Florida,” referring to a residential community recently built from scratch just outside Orlando.
Living CityBut that, Naugle concedes, is something that attracts a certain kind of retiree.
“You’ll notice that our median income is not especially high,” he says. “That’s because we have people with substantial accumulated net worth rather than annual income.”
In other words, retirees.
But a certain kind of retiree, the kind that is attracted by the active lifestyle offered by South Florida. In fact, Naugle says that the typical progression of people discovering Ft. Lauderdale is, first, they go there for recreation or boating, then decide to buy a second home and then, perhaps, move their business. And finally, of course, retire.
Ft. Lauderdale is a living and breathing city, a medium-sized, international metropolis — with a far larger Miami located cheek by jowl, for those who wish more excitement. And yet, Ft. Lauderdale retains a quintessentially American small town flavor. As we make our way to the restaurant — where a waitress greets Naugle with a huge hug — a police officer calls out to us over the loudspeaker in his squad car, threatening to cite the mayor for jaywalking.
“He might just do it,” quips Naugle. “We’re in tough talks with the police union.”
Naugle’s parents, when they retired, moved into an apartment. His father, he says, wanted to live in a place where his neighbors got up to go to work every morning. Ft. Lauderdale, in fact, has a variety of housing stock, to suit every taste: apartment buildings, multifamily dwellings, condos and exclusive beachfront properties.
Apartment living is great for travel, which today’s retirees increasingly enjoy. Being so easy to get away from is another of Ft. Lauderdale’s advantages, Naugle remarks. The city has a small airport of its own, which helps travelers avoid high costs and crowds on domestic flights. And of course there is the great resource of the Miami International Airport, which links South Florida with the rest of the world.
The two airports are a major factor in making the port of Ft. Lauderdale a hub for Caribbean cruises. In fact, it is now one of the busiest cruise ship ports in the world, attracting both domestic and international tourists.
Buying OpportunityIn recent years, the internationalization of the city has been spurred by the weakness of the U.S. dollar, says Naugle. Foreign money has been pouring into the city’s real estate sector, because people are attracted to the safety of investing in the United States. Quite a few also feel they want to retire to this country.
Today, foreign buyers come in handy, since the real estate market everywhere has weakened substantially. Florida has been especially overbuilt. Curiously, the inflow of foreign funds into the real estate market is what Ft. Lauderdale shares with New York City. The connection goes deeper. Ft. Lauderdale is full of retirees originally from the New York metropolitan area, where foreign buying has also helped support real estate prices. Prospective retirees from Manhattan are still able to sell their property advantageously and move down to Florida.
Naugle is surely no Mike Bloomberg, the high-profile New York City mayor. He holds the position on a part-time basis. He faces reelection every three years, but over the nearly two decades that he has been mayor, he has run unopposed so often that he doesn’t even fundraise. He draws a salary of $35,000 per year, which helps with expenses, as he puts it.
But, like Bloomberg, Naugle is a successful businessman. He owns a real estate company. So, his opinion on real estate prices is especially interesting.
“The real estate market may go through tough times,” he concedes. “There is too much supply. It may not recover promptly and, just as in the 1970s, prices may stay low for a while even after the market has bottomed.”
However, he sees the future as bright. Aside from macroeconomic factors, there is the appeal of South Florida to masses of retiring baby boomers and foreign buyers.
“In real estate, you make money not when you sell, but when you buy. It is a very good buying opportunity now.”
Especially for people who plan to retire in the next decade or so.
Alexei Bayer runs KAFAN FX Information Services, an economic consulting firm in New York; reach him at email@example.com. His monthly “Global Economy” column in Research has received an excellence award from the New York State Society of Certified Public Accountants for the past five years, 2004-2008.