Monday, June 18, 2012

Let's Talk About Real Estate

This year's report from the county appraisers indicates that they believe property values will not fall further in North Bay Village.  No growth, but stays the same.  

In spite of the many (re)published PR pieces in the Herald, the housing market in Miami has not recovered.  It may have flatlined but that is due really to one major factor - the banks have slowed down the rate of foreclosures and are holding on to repossessed properties longer.  The shadow inventory created by these properties is out there.  As quietly as possible, banks are trying to clear them off their books without sounding too big an alarm.  If they dump them all at once, it will quickly deflate the prices further and that does not help the banks.

At the current rate it could be years before this inventory is at a realistic level.  That does not even take into account the number of people who are "upside down" on their house, making the mortgage but knowing that they owe more than they could get by selling.  This pent up supply will want to get out from these mortgages when they can.

The problem of course is national, global really, and there is no local solution for this, but there are local actions that our commission should be taking now as top priotity.

  1. We need a foreclosure registry.  When a bank enters foreclosure action against a homeowner, many Florida cities require them to register the action with the city and pay a fee around $500 so the city does not get stuck with the cost of maintaining the property.  The foreclosed properties at 7914 - 7918 West Drive are health hazards adjoining our park and eyesores driving down the neighborhood prices just as one example.
  2. The building at 7525 East Treasure Drive has to be addressed.  That block cannot recover as that large abandoned 10 story building looms over the street.  This building is typical of the housing bubble stupidity.  This was a full occupied, large comfortable apartment rental building with amazing views.  I lived there when I first moved to North Bay Village and it's a shame this housing stock was lost.

    Not only is the building a major drag on the ambiance of the street, the mere fact that there 160 housing units noted as foreclosed and abandoned makes our city much less attractive from a statistical point of view.  It greatly inflates the appearance of dereliction in terms of abandoned and unoccupied houses in North Bay Village.
  3. There is a proposal for a "re-occupancy" certificate process that would require a property changing hands to be inspected, at a cost to the seller, to ensure that the house meets current code.  The natural outcome would be that the house would need to be brought up to code at the time of the sale.
The re-occupancy is part of a good idea. Re-occupancy certification will give the buyer a clean slate to start out with on their purchase, sort a starting line for future coding issues. It will improve public safety by making sure residences are up to code. And it will fund the coding.

It will only work though if it is part of a larger code program. North Bay Village code enforcement over the years has been erratic, often suspiciously lax, and in 2005 when City Hall suffered major damage, many of the permit files were lost.

The re-occupancy will only work if it is a part of an overall code improvement that needs to contain at least three components – education, amnesty and certification. Residential codes are often difficult to understand and it's not always obvious when a permit is needed so it's easy to imagine that work will go on in pure ignorance. The city does not offer any publicized code compliance workshops and should start doing that.

The web page presence needs to be beefed up. Coding should reach out to the residents.

There also needs to be an amnesty period. Perhaps the city could allow residents to hire a code inspector to certify on the same criteria as a re-occupancy certificate, correct the code violations found without penalty and move forward from that point.

Only when the city has made this service open and accessible to the residents should the final step, enforcement, be put in place.

The commission now has two jobs – hold the line on spending and taxes, and stopping our properties from plunging further. Anything else is a distraction.   
Kevin Vericker
June 19, 2012

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