The unprecedented growth of Lake and Sumter Counties and the resulting increase in tax revenue are creating both opportunities and challenges. 

While the influx of funds might seem beneficial, local officials and experts suggest that this growth comes with significant challenges that require careful consideration.

Housing Market Trends and Economic Impact

Lake County Commissioner Sean Parks describes the housing market as “a mixed bag.” He acknowledges that people move here for the beauty and lower cost of living, but also points out that rapid growth has created problems such as traffic and road issues, lack of open space, water resource protection and lack of entry-level, affordable housing.

“Housing is becoming a problem because inflation has been cumulatively taking a toll the last few years,” Parks says. “We will not be able to attract and retain the businesses we want without some level of housing affordability for the workforce.”

Increasing impact fees on developers might seem like a solution, but that could actually worsen the problem by making homes even more expensive. 

“These impact fees are approximately $40,000, so that adds $40,000 to the average price of a home,” says local Realtor Addie Owens, who shares Parks’ concerns about affordability.

Owens suggests that alternative solutions such as bond programs might help spread the cost more evenly over time and make housing more accessible.

The Challenge of Growth and Development Plans

Rapid growth has forced officials to rethink their development plans. Parks says that the county and some cities have made strides in demanding higher quality development but there is still much work to be done, particularly in protecting open spaces and water resources. 

“Is the development going to cost more to serve than the revenues collected from taxes?” he asks. 

That question, he believes, is crucial for ensuring that new developments are fiscally sustainable in the long run.

A clear example of the challenges posed by rapid growth can be seen in Wildwood, where the city had to expand its wastewater treatment capacity much earlier than anticipated. Fueled by home construction in The Villages, apartment projects and new businesses, Wildwood’s population nearly doubled in three years to 30,327, according to a 2023 University of Florida estimate. 

To accommodate the growth, city commissioners recently decided to build a smaller water treatment plant and continue operating the upgraded existing plant, which will allow the two facilities to process about 5.5 million gallons of wastewater each day.

Does Increased Tax Revenue Solve All Problems?

While increased tax revenue is beneficial, it doesn’t solve all problems. Parks warns against the assumption that more development always results in a budget surplus. 

“Many elected officials and managers believe that increased development always results in a budget surplus,” he says. “While a ‘sugar high’ of immediate tax revenue is achieved from an influx of new residential growth, it is often negated a few years down the road when the cost of service exceeds revenues.”

Owens says that the key to managing growth lies in government accountability. 

“Increased accountability to government spending solves more problems than increased taxes,” she says, stressing the importance of carefully planning how tax revenue is spent to ensure it supports sustainable growth and addresses the needs of the community.