Home-buying dollars stretch farther, by gimleteye

The weeds are already growing over the housing bust in South Florida. Finally, the mainstream media is picking up the story.

Here and everywhere, financial derivative-driven sprawl piled up inventories of empty tract houses like MBO’s on the secondary market. It is because of a system that dispersed accountability to the point of vanishing, that what is unfolding in economic terms is occuring as a slow-motion disaster.

Do you think that the insiders at Merrill and Citigroup didn't realize, last year, their respective liabilities, or, where the financial executives so completely blinded by the blizzard of fees and commissions and bonuses that they hoped for a "soft landing"?

The Miami Herald reports, “For the first time in 15 years, state sales tax collections have declined for a 12-month period.” How could it possibly be a surprise, given the way the Growth Machine hijacked common sense and reason during the building boom, shoveling tract housing in wetlands across the state of Florida as fast as as a skilled carpenter can shoot a nail gun.

But the political and economic elites won’t give up: they don’t know any other way than to feed the growth machine any way they can. It takes great infusions of cash, zoning changes, and open lands owned by farmers or land speculators--often one and the same. It's relentless, mind-numbing, and represents a collosal waste of democracy.

At a public meeting the other day, a luncheon at a Miami hotel meeting room, the debate raged whether or not Floridians should be given the opportunity to directly vote on changes to local municipal comprehensive development plans.

People are just so frustrated and fed up with the costs of growth. State-wide voters would no doubt approve the measure proposed by Florida Hometown Democracy if it gains enough signatures to qualify for the November 2008 ballot.

The realtors are desperately trying to throttle the measure—and pledged to raise as many millions of dollars as it takes. They--the Chamber of Commerce, the production homebuilders, the cement manufacturers, the 1000 Friends of The Growth Machine--all are indignant: "You don't trust your public officials! Shame on you!"

Representative democracy, in their view, is not about doing what people want, but about electing public officials to represent what is best for people: and that would be, in the case of Florida, whatever the Growth Machine wants. They know better than you.

See, it is only when you have people who understand how to facilitate growth, that you can possibly plan for the 1000 people per day moving to Florida.

That’s the statistical cudgel wielded by everyone from Jeb Bush to the Miami owner of a local theme park, who made the comment about the 1000 people. His park once was a jewel of an attraction and is now surrounded by so much bad planning and pollution it looks like an apostrophe on the side of Florida’s paved-over quality of life.

Nowadays, moving van companies say there is heavier traffic leaving the state than entering. If there really are 1000 people a day moving to Florida, they’re carrying their own baggage.

Turning the sow's ear of Florida’s downmarket, poorly planned future into a silk purse for production home builders is the latest task before the spinmeister’s of the real estate game. Every week it’s requiring greater leaps of creativity.

It’s “the right time to buy” in Homestead, Florida—advertised in a special advertisement section in Friday’s paper paid for by the interests The Miami Herald will not criticize: Caribe Homes, Lennar Homes, Lowell Homes, and United Homes.

The section is thin as a couple of sheets of paper stapled together. The ad on Homestead, the sprawl-ridden corner of Florida, just north of the Keys--now features a couple (who knows if they’re real or not… since nothing else about the promotion for the housing bubble was real, the young and hopeful newlyweds featured as ecstatic about their Homestead starter home to stretch their devalued dollars could just be pure fabrication.): he will be “at sea to keep the country safe.” She sums up her happiness: “I’m marrying my sailor and w’re getting our new house. All my dreams are coming true.”

Along those lines of hyperbole, “An unstoppable force!” is what then-chairman of WCI Communities told the Washington Post in 2003 of suburban sprawl. Al Hoffman, who chaired both the finance committees for the election of Jeb! to the office of Governor in 1998, and, George W. Bush two years later represents the blue chip economic elite of Florida who, only a few years ago, dominated the political landscape like top predators.

Things change. WCI Communities, Inc. had to be sold in a fire sale to a corporate raider after its advisor, Goldman Sachs, threw up its hands in despair. The company was the first sprawl developer in Homestead, Florida before moving to greener wetlands in Collier and Lee County on Florida’s west coast where the enthusiasms of the housing boom were accompanied by toxic red tides.

Today, former potato fields and vegetable row crops have been converted into the same kind of Mortgage Backed Security Friendly Disasters that you find in Hackensack or Crystal City or Bakersfield: now half-occupied, indifferent and listless as the last shrimp floating in a plastic bowl after the campaign victory party has wrapped up.

Eyeonmiami has been blogging about the housing crash for nearly a year. Read our archives to see how the origins of the housing boom—now turning into the most vicious credit debacle in a generation—grew out of the hubris and political calculation of Florida homebuilders, thinning out but still game to defy reality at every single opportunity. And don't forget Homestead.

Homestead, with its unique location situated between two national parks--the Everglades and Biscayne National Park--chose the sickly flame of suburban sprawl, the quick buck, and the fast deal over sustainable growth. "We have so many poor people," is what the political leaders said, as they fed in the trough of the Growth Machine, abandoning hope for a race to the bottom, or, a NASCAR speedway, or, a failed baseball stadium, or anything but common sense: you were neighbors to two national parks and you turned your nose up like you were just too good.

“I’ve never seen numbers like this,” said Tony Villamil, chief executive of The Washington Group, a Coral Gables-based economics forecaster that helped cheerlead the explosion of the housing bubble. “This is a pretty severe downturn all across the board. What this is telling us is that Florida is leading the nation into a severe slowdown. It definitely feels like the R word.”

And in the paid advertising section, Homestead City Manager Curt K. Ivy, Jr. says, “The housing boom has been more than even the developers expected." Soaring inventories, is that what Mr. Ivy means?



In Florida, the latest chapters of this story are exactly as neighborhood activists, environmentalists warned: that the permanent footprint on Florida's irreplaceable natural landscapes indelibly scars the hopes and aspirations of one of the nation's fastest growing and most politically important states with cynicism.

The St. Petersburg Times accurately totalled the damage from one point of view: that during the time of no net loss of wetlands, US Army Corps of Engineers permitted more than 80,000 acres of Florida wetlands to be covered by suburban sprawl.

Economist Villamil says, “This is going to last through the fall and early next year.” Not a chance. The slow motion train wreck of Florida’s economy is just starting. And as far as those wetlands, those coral reefs, those bays and estuaries are concerned: don't wait for an economist to tell you when they will come back.

They were sacrificed for a greater good: so your home-buying dollars could stretch further.