Don't bailout the real estate speculators ... by gimleteye

It is only on the blogs that these questions are raised: who, exactly, are the real estate speculators outside the Urban Development Boundary in Miami-Dade County? Since the Urban Development Boundary is a public policy, why isn't there clear information on ownership of lands outside the UDB, including the identity of foreign owners? Why don't we have some sort of list showing prices paid for large tracts outside the UDB?

Eyeonmiami has identified some of the speculators. One entity is called Parkland, a massive project in far West Dade that County Commissioner Joe Martinez is pushing like mad. The property is owned by Ed Easton, a Jeb Bush loyalist, and is moving through a permitting channel called "Development of Regional Impact".

The reason I bring up Jeb Bush, who likes to think of his legacy as the "Education Governor", is that his real impact on Florida's landscape was as the "Real Estate Governor". It was under Jeb! that the suburban sprawl model shook the state from top to bottom, shedding campaign contributions like water from a retriever's back.

Today, that old dog-- suburban sprawl-- can't hardly lift itself from the floor. The New York Times reported on June 27th that Lennar reported a bigger than expected quarterly loss, only $120 million. Analysts had expected a lost of 59 cents a share instead of the 76 cents a share reported by the company.

In its conference call, Lennar said "field visits revealed that housing demand had not yet stabilized." No kidding. Just take a drive into some of those Sergio Pino subdivisions that the county commission fell all over itself allowing to be zoned, during the housing boom now in cinders.

But there is real cash money, not just Lennar's, trying to push that old dog up; money spent by land speculators from past victories at zoning commissions and with Wall Street bankers who created toxic debt from platted subdivisions, who winked and nodded at mortgages dredged up by local bankers from "what the market wants".

What the market wanted was for critics to dissolve, disappear, throttled and denied from raising civic objections to sprawl. What the market needed was mortgage fraud, boiler room mortgage brokers culled from other scenes of white collar crime: am I being too harsh?

Land holdings outside the Miami-Dade Urban Development Boundary are burning a hole in speculators' pockets. These speculators had the run of the State of Florida, in particular under Jeb!

So far, they have succeeded in pressuring federal regulators to ease up on the banks that hold their mortgages. Now, Miami speculators are no different from those in Pheonix or Stockton or any other of the regions where real estate markets are continuing to crater, but Miami speculators have always carried a lot of influence in Washington, wrapping up their demands for growth in farm policy, transportation policy and even foreign policy.

In Miami, some who made millions sprouting townhouses in farmland and wheedled Congress and the White House are now trying to keep skeleton crews busy remodeling kitchens.

Waiting for the markets to reverse, though, requires more than patience: they have to figure out how to keep the banks at bay. Its a game of delay and stall.

In failing to reprice debt owed by land speculators, banks are postponing resolution to the economic turmoil plaguing the nation and plunging consumer confidence to the basement: you can see it, simply, in the cost of speculation outside the UDB.

For more than a year, the entire chain of the Growth Machine-- from Federal Reserve chief Ben Bernanke to local campaign contributors from the Latin Builders Association--have been waiting for real estate markets to reverse.

Banks are still holding vast numbers of titles of foreclosed properties on their books at values that aren't even close to market.

One way the delaying game manifested in the Florida legislature, during the past session, was through a bill advanced by Miami-Dade's Senator Gwen Margolis and Representative Larcenia Bullard to give "Developments of Regional Impact" a free pass to continue indefinitely: SB 1706 would have extended deadline dates and approvals for all DRIs for which a development order was adopted between January 1, 2006, and July 1, 2007, regardless of whether active construction has commenced.

In the Tampa Bay Tribune, 1000 Friends of Florida Director Charles Pattison wrote: "I hope the public will examine yet another intrusion into local comprehensive plans that further limits citizen rights to voice opinions on permit extensions and, above all, adds yet another traffic concurrency loophole. This is sadly being done to supposedly "stimulate the economy." CS/SB 1706 demonstrates the ability of the development lobby to always find additional ways to benefit those seeking more favors for an industry that has done so much to congest our roads, overcrowd our schools and disrupt the quality of life. And this comes when we and DCA Secretary Pelham have tried valiantly to convince the Legislature that this is the very kind of thing that will ensure a victory for the Hometown Democracy movement that we do not support. This is why the "citizen planning bill of rights" could not pass while this favor to developers sailed through."

On June 25, Governor Charlie Crist did the right thing and vetoed the bill. As Pattison notes, behind the speculator's bailout bill is a frontal attack on the agency charged with managing growth in Florida, the Department of Community Affairs-- one that was encouraged by House Speaker Marco Rubio; an attack that is guaranteed to emerge in the upcoming session of the legislature.

In the New York Times, Stuart A. Miller reportedly told the quarterly conference call that "industry needed government help, citing rising foreclosures and sagging consumer confidence. "We are hopeful that the federal government will acknowledge the need for further reform and will institute programs designed to stabilize and facilitate the recovery of the housing market."

That's not what we need. What we need is for real estate speculators to stop dominating public choices about growth. They had their turn at the wheel, and it is over.