On Lennar and what is Eyeonmiami doing to 'help'? by gimleteye

I received two recent comments from readers, expressing different points of view about our blog, Eyeonmiami.blogspot.com

On "Lennar's Peace-of-Mind Job Loss Mortgage Payment Protection Program" a reader writes: "LSD and Houses - This post is silly. This company is not the only one offering some kind of payment incentive and I dont get what you are complaining about. Did lennar do something to you? What the hell are YOu doing to help. This post FAILS. You own me $$$ for reading it."

Another reader writes: "Please do not think i am being cynical as I mean it from the heart when i wish you all the very best in 2009. You are a ray of sanity in an otherwise gloomy and frustrating low ebb in human activity. Keep up the great work, you articulate for us who are not very good at expressing what we understand, experience and feel know has to be said. thankyou, thankyou, thankyou."

Let me try to address some points raised by reader #1.

Lennar's ad appeared on A1 of the real estate advertising section. It was noteworthy and included few details and a long disclaimer at the end. In my opinion, it was the worst form of incentive to consumers already battered and bruised by the collapse of the housing asset bubble.

On the question, "Did Lennar do something to you?", the corporation has been and continues to be at the center of local zoning decisions that we have written about extensively. Not in the way reported in recent news or on other critical housing blogs. Our tax dollars have been regularly employed on behalf of prominent developers like Lennar in ways we disagree with. Lennar's expired Florida City Commons plan in Miami-Dade comandeered a big investment of county staff, time and energy to break through the Urban Development Boundary.

In our archive, among thousands of individual blog posts over a period of years, readers can find other information on the role of lobbyists and corporations like Lennar to break through the Urban Development Boundary. What else has Lennar done? At the same time as Florida City Commons was being muscled forward (at the height of the housing boom), Lennar and its lobbyists pushed forward in closed meetings at County Hall for an affordable housing ordinance that in key respects omitted the needs of the neediest. The company heavily lobbied the annexation by Florida City of property in Miami Dade County in advance of its Florida City plan that many objected to on the grounds of important federal and state environmental laws.

I have written about the housing bubble financing methods in terms of metaphors, too: weapons of mass financial destruction or financial hallicinogens-- choose your poison. I'm not far off given the collapse of the US private banking system triggered by layers and layers of speculation by men and women of supposedly high standing.

If you trace the misplaced risk analyses by investors, by builders, and individuals who in many cases were encouraged to buy homes they could never reasonably afford, you arrive at the greatest jeopardy to the free enterprise system in modern history: the nationalization of the private banking industry. Put another way, it took no ideology to get us there other than greed.

Back to the question, 'how does Eyeonmiami help?' Many readers appreciate the information and views we provide. We add to a wider dialogue in the sunshine. That irritates some builders who have pressured the media by picking up the phone and calling the publisher or arranging special meetings in newspaper conference rooms from which reporters are excluded. By doing what we do, we 'help' public officials understand that the public cares, reads, and follows what is happening in our communities.

Corporate irresponsibility and private greed helped trigger the housing bubble an economic and political fact. We began providing this viewpoint to our readers well before the mainstream media would touch the subject. And we have connected the dots to the seeds of financial despair descending on so many families.

Lastly, I am deeply sceptical of federal intervention to "bailout" production homebuilders. Lennar and other homebuilders are pleading with Congress to allow them to write-off losses against profits stretching back into the boom.

Taxpayers never were asked to vote on whether they supported in the first place the economic policies and models that lead to the bubble in the first place, whose collateral damage to our quality of life and environment has been severe; why should we bail them out after so many unheeded warnings proved true? Many responsible homeowners and citizens were appalled by the lack of personal and corporate responsibility that fomented the housing bubble. Now we should allow federal tax policy to write-off those errors which already conferred great wealth on a few and socialized risk for millions of Americans?

As reported by Reuters yesterday, NAHB Chief Economist David Crowe said in a statement. "The fact that there has been microscopic movement in the historically low (consumer confidence)... over the last three months provides further evidence of the need for government action to rejuvenate housing demand," he said."

As far as owing our reader money to read our post; it could be a threat or a joke. Dumping more money into a failed economic model will inevitably lead to inflation and consequences even more serious than we have already endured.

In the not-too-distant future there will be a huge debate how to consume billions in federal tax dollars parachuted to the states from the federal government. Land speculators and big developers like Lennar whose financial model is built on large scale will want to steer those dollars to support new sprawl, new "transportation improvements" that do little for the needs of existing residents. We will object. And we will contest the pitch that investment in housing and infrastructure to serve sprawl creates the kind of lasting economic growth our nation desperately needs. That is our point of view.


January home builder sentiment sinks to new low
Wed Jan 21, 2009 1:48pm EST
By Julie Haviv

NEW YORK (Reuters) - Home builder sentiment sank to a new low in January as concerns about the faltering economy and reluctant home buyers hurt confidence in the market for newly built single-family homes, an industry group said on Wednesday.

The National Association of Home Builders said its preliminary NAHB/Wells Fargo Housing Market Index was 8 in January, down from 9 in December. That is the lowest level on record since the gauge was launched in January 1985.

Readings below 50 indicate more builders view market conditions as poor than favorable. The January index was below expectations of 9, based on a Reuters survey of economists.

Eric Belsky, executive director at Harvard University's Joint Center for Housing Studies, said home builders are not only struggling under sinking demand and a credit crisis, but are facing a flood of homes in foreclosure.

"They have been responding to slack conditions by reducing production dramatically, but demand continues to fall and until that comes back, the drop in production is not enough to make the market turn around," he said.

Interest rates on mortgages have fallen sharply recently, a key development that could help turn around the hard-hit housing sector, but not enough to improve demand at this point.

"Even though we have lower mortgage rates, people are staying sidelined out of fear over further home price drops, anxiety about the economy, their income and their job," Belsky said.

The housing market is suffering the worst downturn since the Great Depression as a huge supply of unsold homes, tighter lending standards and record foreclosures push down home prices.

"Clearly, conditions in the nation's housing market aren't getting any better, and they aren't going to get any better until the federal government takes substantial action to encourage qualified buyers to get back in the market," NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, West Virginia, said in a statement.

The gauge of current single-family homes sales fell to 6 from 8. The index of sales expected in the next six months, however, increased to 17 from 16. The prospective-buyer traffic measure also climbed, rising to 8 from 7, the group said.

Home builders have curbed new construction as they have been working through inventories of unsold homes by slashing prices at the expense of profits to pay off debt and keep afloat.

"Builder views continue to track with historically low consumer confidence measures," NAHB Chief Economist David Crowe said in a statement.

"The fact that there has been microscopic movement in the historically low HMI and its component indexes over the last three months provides further evidence of the need for government action to rejuvenate housing demand," he said.

(Editing by Leslie Adler)


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