Florida's primary concern is turmoil over real estate

ST. CLOUD, Fla. — Florida is a cultural patchwork. The Panhandle seems to have more in common with neighboring Alabama and Georgia than with Fort Lauderdale and Miami in the southern part of the state. The condo canyons on the coasts are worlds away from the sugar-cane and orange plantations in the interior.

But as the state prepares for its presidential primary on Tuesday, one issue appears to sew together its disparate parts: the real-estate crisis.

Florida has felt the effects of the national mortgage troubles and housing slowdown as acutely as any state in the country. Rampant construction has come to a halt, home sales have plummeted and job losses in housing-related industries have soared. At the same time, residents have seen a rise in property taxes and, after devastating hurricanes in 2004 and 2005, an increase in insurance rates.

In interviews with about two dozen people in this fast-growing Central Florida city, almost all said that slumping property values and rising taxes and insurance costs were at the top of their concerns.

"After the hurricanes went by, everything went sky high — property taxes, insurance," said Mohamed Yusaf, 53, a native of Guyana who moved his family to St. Cloud from the Bronx, N.Y., in 1995 and now owns a small strip mall here and a motel in Kissimmee. Yusaf said the taxes and insurance on his hotel were about $24,000 per year combined, more than double the rates in 2004.

Candidates from both parties have been talking increasingly about the need for economic stimulus to avoid a recession, and some have proposed plans to stem the tide of foreclosures.

Former New York Mayor Rudy Giuliani, who has tied the future of his campaign to results in Florida, has tried to differentiate himself from the other Republican candidates by promoting his support for a national catastrophic relief fund that would help lower the cost of hurricane insurance.

Apart from that fund, however, there was no mention of Florida's real-estate crisis during the two-hour Republican debate on Thursday in Boca Raton.

(Democrats are also voting on Tuesday, but the leading candidates for the party's nomination have not campaigned in Florida. And the national party stripped the state of its delegates, as punishment for holding its primary before Feb. 5.)

For many Floridians, real estate has vaulted over other perennial concerns like public safety, immigration and health care. Last year, in response to rising anger about the cost of owning a home, the Florida Legislature approved a plan to lessen property taxes that includes a proposed constitutional amendment. The amendment will appear on the ballot on Tuesday.

The measure, championed by Gov. Charlie Crist, a Republican, would limit property taxes while providing cuts for most homeowners. Florida does not have an income tax, and many local governments are lobbying against the amendment, saying it would ravage their budgets.

Florida's real-estate problems come into sharp focus here in St. Cloud and along the Interstate 4 corridor, which runs from Tampa on the Gulf Coast side, through Orlando in the center, to Daytona Beach on the Atlantic.

The area has traditionally had a high concentration of undecided voters, making it Florida's key swing region in elections. Indeed, many of the voters interviewed in St. Cloud said they were considering candidates from both parties.

"I'm a registered Republican," said Richard McConahay, 63, the former owner of a feed store here. "But when it comes to that final minute in the booth, that doesn't really matter."

McConahay said he was leaning toward Sen. John McCain, R-Ariz. "I think he's relatively sincere, relatively honest," he said.

As for the main contenders for the Democratic nomination, Sens. Hillary Rodham Clinton of New York and Barack Obama of Illinois, "I just don't get a good gut feeling from Hillary," McConahay said. "I don't know Obama."

Yusaf, the motel owner, said he was a registered Democrat and planned to vote according to party affiliation, but he was trying to decide between Clinton and Obama. Though the real-estate crisis was at the top of his concerns, he was evaluating the candidates on other issues, too, including health care.

Once a sleepy town of ranchers and retirees, St. Cloud has been transformed in recent years, with its population nearly tripling since 1990, to 30,100, and dozens of housing subdivisions springing up. But as in the rest of the state, construction has slowed and the real estate market has calcified. There are for-sale signs on nearly every block, and some newly built subdivisions sit half-empty.

John Groenendaal, a city planner for St. Cloud, said he paid $170,000 in 2004 for a 2,000-square-foot, three-bedroom house in the city. At the peak of the housing boom, in 2006, it was worth about $300,000, Groenendaal said. "But if I had to sell it now," he said, "I probably would only get $200,000."

Chris Heck, 47, a house framer living here, said he was choosing his candidate based on a range of issues, including immigration. He said he was leaning toward Giuliani, and Mitt Romney, the former Republican governor of Massachusetts, and was particularly impressed by Romney's stance against illegal immigrants.