Miami Herald writer, Breanne Gilpatrick, writes a fine article in today’s newspaper on the hangover from the latest boom and bust in housing and condo development.
The growth spigot in South Florida has been “all the way open”.
In 2006, building industry lobbyists did everything short of selling their first born to persuade county officials to move the Urban Development Boundary and city officials, to permit one high rise after another.
Even as the bubble was bursting, they argued that the surge of home and condo buyers had busted straight through historical trends for construction in South Florida.
Elected officials nodded with sober agreement. Citizens who objected were called “liars” and worse by county commissioners like Joe Martinez. In the city of Miami, citizens were just plain ignored.
It will take more than a raw egg and shot of Worcestshire sauce to cure this hangover. So what will the builders do, in 2007?
We suspect their lobbyists will soon be swarming the offices of friendly commissioners.
No longer will they be arguing that building must be stimulated because of extraordinary demand.
Now they will argue the reverse: that building must be stimulated to create jobs. We imagine the same consultants who were hired to make the one argument will now be hired to make the other.
Employment in the construction sectors, at least in South Florida, remains strong. But the pipeline is already emptying.
Financial markets believe that the depressed housing market has bottomed out. But we take a contrarian point of view: the South Florida building bust has a long, long way to go.
As projects now in completion in Miami and its environs are completed, unemployment in construction will start to rise rapidly.
Developers will pay their construction workers to ring city and county hall, demanding relaxed rules for their industries. Who will be surprised when city and county commissioners pontificate and demagogue their way to shifting, again, the costs of growth onto the backs of taxpayers?
Not us.
8 comments:
Miami Going From Bad To Worst
Even with a real-estate boom for the past several years the City of Miami has maintained its dismal title as the “Third Poorest City In The U.S.A.” What may we expect now that the building boom has slowed down and we are left with a glut of thousands of new condo and residential homes that will take 2 to 3 years for the market to absorb?
If our city government can’t get the job done properly in prosperous good times then we are all in store for some real belt tightening now.
Here are some of the solutions that need to be implemented ASAP:
We must learn to live within our budget.
Reduce as many expenses as possible.
Reduce all elected officials salaries and pensions by 50% to 75% since it is an honor to serve our community. This is not, a job, a career move or a retirement plan.
Reduce all senior staff salaries and pension funds by at least 25%. There is no justification for our City Attorney or City Manger to make $300K with perks, expenses and an overly generous pension plan.
Work with the city service providers such as police department and fire department to provide them with a fair salary and retirement fund that does not put a strain on our economy.
Provide the same maximum 3% increase on all properties even if they are not protected by homestead exemption.
Raise the homestead exemption credit from $25K to $50K or better yet $75K.
Implement a moratorium on new building permits until we figure out how Miami 21 will benefit our city and how long it will take to absorb the glut of recently built housing units and the many that are still in the pipeline already permitted and being built.
Implement intelligent urban planning that will only change neighborhood zoning when the neighborhood agrees to do so.
There must not continue to be patchwork zoning every time a powerful developer that hires Greenburg Trauig after buying a property and too easily convinces their city officials pals to permit them to up-zone, provide variances or special permits.
We must implement better ways to take care of our most needy, disenfranchised citizens.
We must implant better ways to prevent the continued economic hemorrhaging of our middle-class and their exodus from our community due to high property taxes, high property and auto insurance and the lowering of our quality of life.
Economic prosperity and real-estate booms are cyclical. So we must do a much better job of planning our city’s future then we have done in the recent past. Spending more and building more are not the only answers. Budgeting smart and building smart are two of the best answers.
Harry Emilio Gottlieb
Coconut Grove
The last condo boom of the 80's took over 10 years to be absorbed.
Considering that this boom has resulted in a much larger number of units available, I believe we are looking at more than 10 years this time.
Anecdotal note to consider-I met a fellow that moved here from NJ and settled in the new Waterstone comunity in South Dade.He said that he had to move because 80% of the homes were rented ,and the majority to section 8 renters.
He moved to KeysGate looking for a better environment for his children, only to find that many,many homes in KeysGate are rented to section 8ers as well.
I think it is only a matter of time before the same happens to these condos-and then the market for resale will really bottom out!
Ever wonder why the Federal govenment doesn't tell multiple section 8 property owners that 'this is what "we" pay for home rental, take it or leave it?' Some how I think that paying 1500 or more a month for rent is nuts (who pays the development maintence fees?). The government could buy entire condo buildings for that much as a mortgage per unit... BUT, wait that would take the units off the tax rolls..... Ohhhhhh wait, that is what EX-chair Martinez wants to do.... bail out his his buddies and take the units off the market.... so they can build some more.... Yes, Of course.
(PS: don't forget to lower the property tax on those new commerical properties)
Just think Tony Bair may be reading the Miami Herald right now!
Or at least take glance at it.
What would he think?
I'll tell you one thing, I am sure he would want to import some of these empty condo buildings to releave the housing pressures on London.
We're intrigued by the idea that developer/insiders will be using excess production home inventory for rentals to Section 8'ers. Of course, we have to wonder where these tenants are working and how they can afford to commute to their jobs from distant, outlying parts of the county. There has been some mainstream media focus on this new phenomenon: the rise of the suburban poor. We suspect that in South Florida, that much of the wealth generation for big developers of production homes (and contributions to local elected officials) has been through subprime mortgage lending: as these interest rates re-set significantly higher in the next three months, we'll see rapidly escalating default rates that is going to re-inforce the rising pattern of suburban poor in South Florida... if there are any insiders who would like to correspond directly or confidentially on this or other issues, write to us at: geniusofdespair@yahoo.com
Where did all the tax money go?
Florida Residents: Over taxed and attacked by two terrorist groups; the Insurance Industry and Politicians.
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