Job Growth, Economic Strength in Key Sectors, Strong Demand for Class-A Office Space Highlight Study’s Key Findings
WEST PALM BEACH, FLORIDA (September 4, 2018) --
The City of West Palm Beach is a great place in which to do business, based on the results of an Economic Development Survey presented to City Commissioners during a Mayor-Commission Work Session on Tuesday, September 4, 2018. The study, conducted by Avalanche Consulting over a 6-month period, showed West Palm Beach job growth exceeding the national average, more evidence of the City’s need for Class-A office space, and economic strength in both the City’s traditional economic sectors of Real Estate/Development and Tourism as well as in other diversifying sectors such as Finance, Medicine, and Cottage Industries on Antique Row and in the Warehouse District
The findings will also be presented at a luncheon at the Chamber of Commerce of the Palm Beaches on Wednesday, September 5, 2018 at 11:45 a.m. at the Palm Beach County Convention Center.
The key takeaways below are a sample of some of the most significant statistics that reveal both strengths and priority issues to be addressed in West Palm Beach:
- Economic & Demographic Trends:
- Job growth in West Palm Beach has been strong in nearly all industries. Since 2012, employment in West Palm Beach has risen by more than 20%. During this same period, total U.S. employment increased by less than 9%.
- The population of West Palm Beach is also growing rapidly—at nearly twice the U.S. rate over the past five years.
- West Palm Beach is an employment destination that draws workers from across South Florida – 90% of its workers come from outside the City limits, and it boasts a large labor shed of more than 680,000 workers available to employers.
- West Palm Beach is well-educated—more than 32% of West Palm Beach residents have a bachelor’s degree or higher—above the U.S., Florida, and Miami Metro averages.
- The City also benefits from acclaimed educational institutions throughout the region—collectively, schools in a 25-mile radius of the City awarded 18,790 degrees in 2017.
- West Palm Beach is entrepreneurial and innovative, with a high share of self-employed individuals and an above-average number of patent holding investors living in the City.
- Income levels in West Palm Beach are below average and growing more slowly than all benchmarks despite strong economic growth. This contributes to high poverty levels concentrated in specific parts of the City.
- Crime rates in West Palm Beach, while relatively high, have fallen over the past decade.
- Business Climate:
- The State of Florida offers a highly competitive business tax environment with no personal income tax and a relatively low corporate income tax rate. The state’s tax environment is especially competitive relative to high-tax financial centers in other states.
- Property taxes in West Palm Beach are relatively high compared to benchmarks, but not extraordinarily so.
- Sales tax collections have grown rapidly in West Palm Beach since 2013. Retail sales comprise the largest source of sales tax collection in West Palm Beach, but Leisure/Hospitality and Construction are the fastest growing source of sales tax revenues.
- In addition to attractive tax rates, the City also has competitive utility rates.
- High speed internet access is readily available in West Palm Beach, and gigabyte service is much more common than seen in most U.S. communities.
- Visitor Trends:
- The number of visitors to Palm Beach County (PBC) has grown rapidly over the past decade, contributing to a corresponding rapid rise in bed tax collections. Visitation remains seasonal with peak visitation in the winter months—but the off seasons are growing in visitor activity.
- West Palm Beach is the top destination for visitors to PBC but number two for overnight stays. The large gap between visitation and stays indicates that West Palm Beach could accommodate additional hotel rooms. [Note: Two hotels will be online in 2019: Hilton Canopy and Marriot Autograph]
- Visitors to PBC engage in a wide variety of activities, many of which relate to West Palm Beach’s assets, including shopping, fine dining, sightseeing, art galleries, historic sites, museums, nightclubs and more.
- Additionally, Palm Beach International Airport is a major asset to PBC and West Palm Beach.
- Residential Real Estate:
- Housing vacancy rates are relatively low in West Palm Beach, but rental vacancies are relatively high. This reflects that a majority of housing units permitted over the past five years have been for multi-family projects—increasing supply of rental options but keeping homes for purchase more static. West Palm Beach is a majority renter city and growing the share of renters over time—a trend common in many high-growth communities in the U.S. today.
- The median home value in West Palm Beach is lower than most benchmarks, but the median home value and median sales price of new homes is growing rapidly.
- The City of West Palm Beach permitted nearly as many housing units as new households added over the past five years, demonstrating that the market is providing almost enough supply to catch up with growing demand.
- Although homes and rental units are more affordable in West Palm Beach than many benchmarks, lower incomes in the city make housing expensive for residents – in 2016, 43% of households in West Palm Beach were in unaffordable housing, meaning that they spend more than 30% of their income on housing costs.
- Commercial Real Estate:
- Office real estate is growing increasingly scarce in West Palm Beach and PBC, especially for new, Class-A office. Class-A office vacancy rates have dropped steadily for the past five years, and rents have gone up correspondingly. Currently, Class-A office space in downtown West Palm Beach is sometimes more expensive than in Miami.
- Demand for industrial real estate is also strong in PBC and West Palm Beach. New construction has helped absorb growing demand, but vacancy rates continue to fall, causing prices to go up over time. Industrial real estate is still currently more affordable in West Palm Beach than many parts of Palm Beach County.
“The City of West Palm Beach offers a superlative business climate coupled with an exceptional quality of life,” said West Palm Beach Mayor Jeri Muoio. “Bolstered by a pro-business government and a vibrant, supportive business community, West Palm Beach is on a solid economic growth track exceeding national averages, as seen in the job growth data, strong sales, and rising property values in our city. We also, now, have even more data about our City’s very strong need for more Class-A office space.”
“One of the things that makes the City of West Palm Beach stand out is that we are creating jobs faster than we can fill them,” said City of West Palm Beach Economic Development Director Christopher Roog. “While the U.S. economy has rebounded, West Palm Beach has seen remarkable additions in the last seven years thanks to the strong national economic climate and, also, the will of Mayor Jeri Muoio and City Commissioners who have put policies in place that promote jobs growth and investment in our City.”
Mayor Jeri Muoio tapped Avalanche Consulting to conduct the study to obtain a new perspective of the City’s economic landscape in light of all of the exciting new developments that have recently come online in West Palm Beach: Brightline, the Hilton Hotel, the Warehouse District, to name a few. The study’s real-time data will be used to help instruct, guide and update the City’s economic strategy for the next 3-5 years, and key data points will be used to demonstrate the success of policies.
The Economic Development Study was developed in partnership with Avalanche Consulting, the City of West Palm Beach, West Palm Beach Community Redevelopment Agency, West Palm Beach Downtown Development Authority, and the Chamber of Commerce of the Palm Beaches. The creation of this Economic Development Study included a sector analysis and also competitive assessment examining quantitative data with interviews and focus groups with more than 70-stakeholders in West Palm Beach.
To view the study in its entirety, please visit: http://wpb.org/Departments/Economic-Development/2018-Economic-Development-Study