Saturday, January 04, 2014

Rapidly escalating flood insurance, real estate values, and other Miami mysteries … by gimleteye

The other day, my friends said at dinner, the bar at the River Oyster House was filled with Chinese celebrating New Year in Miami. I had noted on the blog a few days earlier a similar phenomenon at the water line. The day before Christmas I was surprised by the number of Asians, Indians, and Malaysians on Miami Beach: recent additions to the flocks of winter visitors from South and Latin America, not to mention Russians, French, Italians and Germans.

If you want to see "how" Miami has turned into a global destination, take in what is happening on Miami Beach. If you want to see what we will "become", join me on another kind of stroll.

Friends assure me that this building boom in downtown Miami is different from before: this one is being built with hard money even as the cement is being poured. In the early 2000's, I had a grip on the economic, financial and political influences at play in Florida's building boom. This time, I'm at a loss.

What we do know is this: US banks recapitalized (on the backs of taxpayers thanks to the Fed), but the prosperity of the financial sector has had relatively little impact on the broader economy and middle class. The building and construction boomlet in downtown Miami seems a different affair. Are loose fiscal policies in China, not to mention plain old corruption in Asia, fueling Miami's boomlet?

This week George Soros expressed fears about China's economy, dependent as it is on easy money to fuel -- primarily -- construction and development schemes for which a legitimate market disappeared in the major urban areas years ago. When it comes to gambling, China is the gold standard. Even though Genting hasn't secured Florida as a base for casinos yet, it is a sure bet that someone's house money is at play in downtown Miami today.

So far as I am aware, there is no clearinghouse for data on sources of finance for construction in Miami. There ought to be, not that anyone in position of power or influence would do anything with the data. It didn't happen with flight capital or drug money, or, when R. Allen Stanford did a reverse migration of dollars to Antigua in the early 2000's with the blessing of the state of Florida, Jeb!, and sped by duffel bags full of cash and private jets totaling a mere $5 billion.

In contrast, the ordinary homeowner knows exactly what is happening with flood insurance. Rates are rising faster than tides, because insurers are in business to survive catastrophic storm events, including the catastrophe of sea level rise due to climate change. I doubt any of the new buyers or builders in downtown Miami are paying more than a passing glance at storm clouds on the horizon. It always rains in Miami in December, right? If the sea levels rise, someone will build sea walls. Just like they do in Denmark.

Down in the Florida Keys, on the other hand, the natives are getting restless. FIRM, "Fair Insurance Rates in Monroe County", is agitating against the current effort by the Florida congressional delegation to delay the implementation of Biggert-Waters Act whose impact could deal a swift karate kick to the heart of Keys real estate. Not to mention, Miami.

Florida homeowners "will see their flood insurance bill potentially quadruple in the coming months because of Biggert-Walters." FIRM wants to kick the insurance rate issue down the road for four more years instead of the 15 month compromise now under discussion in the House that is "essentially useless as a relief measure for a vast majority of Floridians."

What will we know in four years, that we don't know now?


Anonymous said...

Looking at the new normal,
The smart money is selling fast to a greater fool.

Geniusofdespair said...

The Climate Change task force is looking at insurance cost. That is the canary in the coal mine.

Anonymous said...

How do you explain the most recent data demonstrating the growth of the ice caps?

P said...

The rest of the nation is in a record-setting deep freeze and yet you are still pushing global warming? LOL!

You do realize that Al Gore received a "D" in Geology, right? Stop following him like a lemming and open your eyes.

Anonymous said...

Realtors lobby hard to keep flood insurance rates low. Look for a last minute deal.

Anonymous said...


Educate yourself about "global warming" before making ignorant comments. It isn't "global warming" - it is climate change. And that term is not a cover up. Climate change is the reason for the deep freeze up north and the reason I am mowing my grass in January, when I've never done so before and I've lived in South Florida for north of 60 years. Stop following Limbaugh and all of your "conservative" friends. Conservatives are supposed to conserve and you all are doing a terrible job of it.

P said...

To the last anon,
So you have given up on global warming and now attribute every variation in weather to climate change? LOL!

News flash: The climate is always changing and has been for billions of years.

Anonymous said...

These climate change people jump on any band wagon that can control people. That is up and until they find out they are also part of the group being controlled. Then they jump on the next band wagon. People like that have no integrity and cannot be taken serious.

On another note the climate is constantly changing. Last ice age was 10,000 years ago and lasted for 10,000 years. It must have been all that man made pollution back then too. LMAO

The sun controls our climate. When the sun has storms on it, the temps on the planet rise. When the sun doesn't have storms the temps cool. As they have been doing.

One volcano going off does more pollution to the planet and releases more gases then all humans on earth could do. It would take us 50 years including China to produce that must population and gases into the atmosphere.

If you are not willing to one can help you. If you are determined to one can stop you.

We must learn from the people who have no gain in the matter and not from people like Al Gore who is almost a billionaire from this scam.

Anonymous said...

Back in the 70′s they had the same hype we have today but back then they called it “the next ice age.” Liberals are always looking for a stupid cause to support.

Geniusofdespair said...

Thank you trolls for coming. Hope you enjoyed dispensing your misinformation.

Anonymous said...

The deniers simply won't look at the weird weather all over the planet. Have any of the GOP trolls checked the snowfall cover in the Sierras or Rocky Mountains? What about the humidity and rainfall in Florida in November/December/January?