Friday, February 11, 2011

Back to the Housing Issue

The crash of the housing market has been a traumatic event across the country. Completely foreseeable, its effects have still caught local governments unawares and the responses have been slow. It was October 2008 when the dramatic bank failures highlighted the problems and that's enough time to have formulated a plan to recover. Two years is long enough to be surprised and now it's time to get to work.

The only thing a city can control is how to respond to the sick economy.

When a city, like a person, is in trouble the solution will always have at least three broad categories - the short term, the mid term and the long term.

The short term is obvious. Get the current spending under control and eliminate non essential spending. The city has taken steps towards that.

The long term is usually clear. Plan and adjust towards a goal that reduces vulnerability to economic shocks and cushions for hard times. In the broad sense, that plan was already in place through an ambitious series of projects designed to increase economic diversity and expand the tax base.

It's the mid term that's going to hurt us next. That step is the realistic assessment of economic prospects and taking steps to address and improve the circumstances. That's where NBV is failing.

I have often wondered why even in good times our houses sell for 10% less than comparable houses in similar areas like Miami Shores and Morningside and why even with an A Rated school within walking distance, an exceptionally low crime rate and property tax rates that are slightly below the average, homes stay on the market an average of 2 months longer.

Part of the problem is that nobody knows that we are even here. Lifelong Miami residents have often told me they didn't even know there was a neighborhood here and how nice a neighborhood it is. Others have only heard the often true sordid stories about North Bay Village and avoided it.

For the mid term, we need to fix this and it is not just a government problem. Let me emphasize that. The city has a role to play in this but so does the private sector - the developers, the real estate agents, the property managers.

First, the city has to take the initiative to assess how deep the problem is. Towards that end, the city needs to create and maintain a foreclosure registry. This will allow the city to see what properties are being foreclosed and enable NBV to track clear ownership of the property to ensure maintenance and code compliance.

Second, the city has to start sponsoring outreach to homeowners in trouble. There are programs available through the county and the federal government to help people who are falling behind in their mortgages and taxes but these programs only work if people know about them. When people start falling behind in their bills, they are often embarrassed and don't seek help. The city can make this easier by holding well publicized events in the new chambers along with these organizations. Another idea is to assess who has not yet paid their 2009 taxes and reach out with a mailing or a phone call to offer referrals and advice.

Thirdly, and probably most important, the city should sponsor a true public-private partnership with local real estate business people. Create a North Bay Village Realty Association with the goal of promoting property sales here. Actively work with the association to identify the short term fixes that might help - street cleaning or increased code enforcement. The private sector should do its part. Start advertising not just individual properties but the city itself.

Can you imagine a full page ad that might say something like "The Best Island North of the Keys"? It could contain a list of houses for sale, showing the relative bargains, tout our projects for the future, brag about our school and show pictures of the quiet, well tended homes in the middle of the Miami madness.

Why not take it over the top? Have a North Bay Village Days Weekend with a tour of the city, presentations of the projects, meet and greet the police, take a tour of the school, ask homeowners to have block parties that weekend to highlight that neighborhoods here work and have dozens of open houses both in the single family and the condos. Throw down a challenge to the banks to represent here with finance and mortgage people available to help people who might want to buy.

Make it a big splash with advertising paid for by the developers, banks and real estate agents. Promote it to the media that one city is doing something about its problems and try to get national coverage.

These are not expensive solutions and the private sector has to put some skin in the game since it's their houses that NBV wants to sell. But it requires city leadership and vision to get the ball rolling.

I have not yet seen that kind of vision. I was deeply disappointed when I approached one of the commissioners for his views on the housing crisis and only heard platitudes about how the whole country is suffering. Yeah, I noticed but my point is that it's hitting us harder.

The short term fixes of budget adjustments and decreased costs can only go so far. The long term fixes may or may not happen. Now it's time to concentrate on that middle, the hard work of consolidating and not just sitting around on our assets hoping things get better by themselves.


Kevin Vericker
February 11, 2010

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