Past economic troughs may have been characterized by old cities with idled assembly lines and abandoned factories. This one is defined by places such as Flagler where half-built subdivisions have little hope of ever being filled and thousands of carpenters, landscapers, mortgage brokers, furniture sellers and interior designers thrown out of work have little hope...

Share story

PALM COAST, Fla. — Toby Tobin’s luxurious three-bedroom condominium speaks to an unsustainable vision of the good life that not long ago lured people in droves, transforming this once sleepy retirement community into a boomtown.

Tobin’s place at the Tidelands complex looks out on the Intracoastal Waterway, and the beach is just minutes away. In January, he picked it up in a short sale for $170,000 — less than a third of the $587,500 the original owner paid in 2005.

Similar developments in distress dot the lush landscape in Palm Coast, the hub of Flagler County. Once they fueled a virtuous cycle of rising property values, new projects, new residents and new jobs that made Flagler the fastest-growing county in the nation. Now they offer vivid evidence of an economy gone bad in ways proving difficult to repair.

Two years after the recession ended, the jobless rate in this county south of Jacksonville was 13.8 percent in April — down from 14.5 percent in March but still the highest in Florida — and officials are at a loss for ways to turn things around.

Past economic troughs may have been characterized by old cities with idled assembly lines and abandoned factories. This one is defined by places such as Flagler where half-built subdivisions have little hope of ever being filled and thousands of carpenters, landscapers, mortgage brokers, furniture sellers and interior designers thrown out of work have little hope of regaining their jobs.

“Flagler County is the poster child for what went right and what wrong in the economy,” said Tobin, a real-estate consultant whose website GoToby.com tracks the local real-estate market.

Unraveling the economic problems in places heavily reliant on housing growth is proving problematic.

Florida was once synonymous with breakneck growth, and as recently as 2006 the state’s unemployment rate was 3.3 percent.

“We had these withering heights when housing was hot, but when it went deep-space cold it put us in this situation we are trying to climb out of,” said Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness. “Here, the fates of those two markets, the labor market and housing market, are tightly intertwined.”

While parts of Florida can count on tourism for a significant number of jobs, many more communities in the state have economies built around a housing market that continues to sink.

“We have had structural problems take place here,” said Donald O’Brien Jr., an insurance broker who was part owner of a Flagler County title-insurance business during the boom years. “What is going to replace the jobs that were here? Our primary industry is gone.”

The title company he co-owned has gone from 24 employees to five. At its peak, it was doing as many as 400 closings a month, O’Brien said, but now business has slowed to a trickle.

With no port, no rail sidings and no signature industry, local political and business leaders see no obvious route to new prosperity. Officials say they want to do more to market the county — with its retro beachfront, surfable waves and canopied bike trails — as both a tourist and retirement destination. Beyond that, they are unsure what to do.

“We were on top of a crest of a wave a couple of years ago,” said Jon Netts, mayor of Palm Coast. “The higher you ride on the crest, the harder you have to fall when the tide goes out. There is no magical fix here.”

Meanwhile, declining local revenue and state budget cuts are forcing the school system, the county’s largest employer, to contemplate layoffs and a shorter school day.

Median home prices have fallen by more than half since early 2006. Nearly 15 percent of the county’s homes with mortgages have been sent default notices, four times the national rate, according to CoreLogic, a mortgage-research firm. And the local YMCA recently closed because of ongoing fiscal problems.

“People here turn on the TV and hear the economy is turning around and they wonder where in the world these people are,” said Rabbi Merrill Shapiro, who heads the Flagler Area Ministerial Association. “The downward motion has slowed, but here we still find ourselves in a downward cycle.”