Miami Herald editorial page: lost on the housing collapse, by gimleteye

Here is a good editorial, to share with you--on the simmering anger of people as the housing markets collapse.

The Miami Herald, sitting in the middle of the biggest housing and condo bust in modern history, has been mostly silent on the editorial front.

Read the following for an editorial point of view that should be well situated on the Herald's opinion page. Strange, that it's not.

You should call or write the Miami Herald, to ask why.

Officials play the market, and Treasure Coast pays
By Kenric Ward
Friday, August 3, 2007

"Let the market work." This capitalistic creed works most of the time.

But when Adam Smith's hidden hand motions in the wrong direction, people get slapped.

Take the Treasure Coast housing market. Flush with cash, investors and speculators sent our real-estate prices soaring in the first half of this decade.

Then, almost as quickly, the bottom dropped out.

Market watchers are still looking for the basement, but prices keep tumbling.

"Buyers will come back only when they see blood in the streets," predicts Alan Hunter, an analyst for MetroStudy, which tracks the Florida housing market.

For bloodless economists, our bursting bubble provides another notable blip on their tracking charts. They point to several contributing factors, including loose (sub-prime) lending practices and big national builders entering the area — both fueled by aggressive marketing campaigns.

Now, beset by a succession of declining quarterly sales reports, Realtors and others associated with the development business keep searching for silver linings. As their predictions for a turnaround recede further into the future, they chirp, "It's a great time to buy."

But it's definitely not a great time to sell. For anxious homeowners, the "let-the-market-work" mantra is small solace.

Fact is, neither Wall Street nor your local real-estate agent is going to magically turn things around. As the figures in the accompanying box indicate, it will be a long, hard, slow climb back — with a lot of broken dreams along the way.

But let's not blame everything on the greedy capitalist pigs. The public sector — your local elected officials — has a major stake in this mess. They helped to create it, and they're prolonging the pain.

How? By approving development after development.

St. Lucie County and Port St. Lucie are an epicenter for overdevelopment. Not so long ago, these communities boasted about being the nation's fastest-growing market. They're not bragging so much now. The biggest growth categories these days are the record inventory of empty homes and the rising number of foreclosures.

"Alarming," is how MetroStudy characterizes St. Lucie's backlog of vacant dwellings.

Indian River County isn't much better off. Its supply of vacant new homes just hit another record high, for the 11th consecutive quarter. The bucolic county touted as the "Hamptons of Miami" has devolved to the point that marketers' next field of dreams is a backwater burg called Fellsmere.

The not-so-invisible hand of county commissions and city councils set the stage for this carnage. They bent comprehensive plans. They flexed zoning rules. They jacked up densities. They toyed with "smart growth," "clustering" and "towns and villages" as tools to promote more development.

Elected representatives just couldn't say no.

This threw the door wide open to land speculators. It also attracted big national builders whose global advertising reach put a bull's eye on the Treasure Coast and created demand. That lured still more investors and absentee landlords.

Of course, this story has played out all across Florida. That's precisely why the Sunshine State is among the most depressed real-estate markets in the country.

And, so, our boom-and-bust economy is plumbing another low-water mark — drilled by the hands of local officeholders. You can thank them, in part, for the 8 percent decline in median home prices on the Treasure Coast this year, as reported by the Florida Association of Realtors.

Happily, some communities do a better job of managing growth. Martin County's stricter rules on development have yielded a somewhat more stable housing market. Inventories of unsold dwellings are lower and, not coincidentally, home values are holding steadier.

While Martin's elected officials make their share of mistakes, the county's historically slow-growth philosophy has helped shield residents from some of the volatility that's buffeting their northern neighbors.

Yes, we live in a capitalist society. We also live in a representative democracy that's supposed to promote the public's welfare. That doesn't necessarily mean promoting development or facilitating the next land deal.

Nor should it mean hiking local government spending 99 percent in the past six years to subsidize that growth. Mocking free-market thinkers from Friedrich Hayek to Milton Friedman, our public servants perversely socialize costs to privatize profits — which isn't exactly "letting the market work."

Does your commissioner or councilman care more about you or those who tend the growth machine? Longtime Floridians know the answer, and it's something every taxpayer ought to ponder as we view the glutted housing market, and await the next election.

ken.ward@scripps.com