Friday, June 06, 2008

Investigative journalism and the blogsphere, more: by gimleteye

A main reason we started writing this blog, eyeonmiami, is because the mainstream press has studiously avoided a rationale discussion of the political origins of the housing boom and bust--now sowing disaster in world-wide credit markets--that started right here in Florida with formulas perfected by builders, developers and lobbyists to marry the profit motives of Wall Street financiers with the inevitable destruction of wetlands and natural resources, as well as neighborhoods and communities, through the proliferation of platted subdivisions far from places of work accessible only by car on over-congested roadways.

The threat to our national economic security could not have happened unless our politics was oriented toward evading the intent of laws meant to protect the public interest: this happened more clearly in Miami, Florida than anywhere else in order to pump up an asset bubble in housing and construction.

Today, there is a universe of blogs on cratering real estate markets and good economic analyses that still have not found its way into the mainstream media, but there is still very little written about the political origins of the housing market crash.

This phenomenon remains a big part of our blog, because we have experienced the history and influences first-hand here, in Miami. For mainstream media, like The Miami Herald, this subject is cordoned off as though a repository of spent radioactive fuel rods.

The ceaseless tide of boosterism, joining the mainstream media at the hip with the Chamber of Commerce and builder lobbyists (in Miami, evinced through the campaign contributions of and domination of Spanish language AM radio by funders allied with the Latin Builders Association), fed the flames of a boom in housing that was unsustainable, without any kind of breaks in the form of modifying regulations, and hubris that Greek audiences for classical tragedy two thousand years ago would have laughed or gasped at, in terror. (We build $500 million dollar performing arts centers instead of critical content.)

The Miami Herald writes above the fold today, "Loan defaults surge". The statistics belie a point I wrote about a year ago: that the credit woes then attributed to the subprime segment of buyers could not help but bleed up into the ranks of the middle class and higher-- however well-intentioned, people who spent far more on housing that they could reasonably afford.

And still, there is NO accounting in the mainstream press of the politics we see expressed every day in Miami that fostered the boom and bust, and indeed, triggered the world-wide credit crisis right here, in Florida. The principals are land speculators who own property outside the Urban Development Boundary, who have been agitating for movement of the Urban Development Boundary, and who mightily profited from economic and political considerations that have put the entire state economy deep, deep in the red.

These are the special interests who dominate the county commissions here and in the formerly fast growing parts of the state. They have been insulated from criticism in the mainstream press because the force of advertising dollars has muted any critical analysis of their roles. It is precisely the existence of an urban development boundary that flushes them, like white winged dove from their coveys.

It is all well and good to publish "Loan defaults surge". I am waiting for investigative journalists and the editorial board of The Miami Herald to write, why. I do not believe that there can be any turning of the US economy until there is a fair reckoning of the forces that plowed platted subdivisions into Florida wetlands. For now, investigative journalists and the curious will have to read our archive feature, "housing crash" to get a sense of what happened, and, why.


Anonymous said...

2 Questions
1. A buyer puts 20% down and purchases a house in Nov. 2005. The value of that house is now less than the mortgage. Do you walk away or do you sit and wait it out?
2. If you purchase a foreclosed property for 200K that was lost sold in 2006 for 650K will the county tax assesor reduce the assessed value of the home to reflect the current selling price of 200K ?

What a crazy world this has become.

resscane said...

My take.., for what it is worth.
#1) Depends. Are you living in said house? With you family? DO you need to move? Have you been fired/downsized? Has you mortgage reset? Are your credit cards maxed out? The rise in prices of everyday expenses have you stretched to the breaking point? The answers to these questions will probably help you come to a conclusion to question #1. Ultimately, your mortgage note is just a contract, like any other. Read it. You promise to pay x. If you are unable/don't pay x, the lender can/will foreclose on you and take possesion of the collatoral. There may be other recourses the lender can pursue, so read your note.

#2 Your baseline is set at the purchase price. And in a foreclosure sale, the purchase price is the baseline. And this baseline is subject to homestead exemptions etc. Now a note sale differs from a vanilla real estate transaction.

Obviously there will be some exceptions to the above.

Mensa said...

Miami is the epicenter of dishonest deals because we have the worse crooks in office.