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

Treasures on the Bay Being Foreclosed

From Peter Zalewski at Condo Vultures comes the news that the housing crisis is getting worse in North Bay Village. Treasures on the Bay has been foreclosed and is being repossessed.

Week of February 9, 2011

Owed $97.3 Million, Lender To Repossess 329 Waterfront Miami Units


A lending consortium is days away from officially repossessing 169 condo-conversion units and 160 rental apartments that front Miami's Biscayne Bay as part of a nearly $100 million foreclosure, according to a new report from CondoVultures.com.

The lending consortium is poised to take title to nearly 380,000 square feet of residential space in the unfinished Treasures on the Bay three-building, condo-conversion complex in the island city of North Bay Village, located between Greater Downtown Miami and Miami Beach.

A newly formed Florida corporation managed by the Owens Financial Group Inc. of Walnut Creek, Calif., has been designated to take the official title to the 329 units and two undeveloped lots after winning a court-ordered foreclosure auction on Feb. 2, 2011 with a bid of $500,100, according to Miami-Dade County records.

The foreclosure auction was the last step in repossessing the units and land following a summary judgment for $97.3 million that was issued in October 2010 by Miami-Dade Circuit Court Judge Valerie Manno-Schurr.

"Treasures on the Bay is a condo-conversion project that wound up being a casualty of the South Florida real estate crash," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "The original condo converter successfully renovated and sold off most of the first tower, and was poised to sell off the since-renovated second tower when the market collapsed in 2007. Work never had a chance to begin on a third tower."

We can't keep our heads in the sand. This city consistently sells for less than other comparable areas and takes longer to sell. We need a housing strategy now. Where are the local investors and real estate agents who are losing money on this? Where are the homeowners whose value declines every time another home on the block falls into foreclosure? You know, apathy only takes you so far.

More about this later this week.

Kevin Vericker
February 8, 2011

The Housing Crisis

A headline in today's Miami Herald reads Slide in South Florida home prices continues. The story is familiar - there's no quick recovery on the horizon for real estate. And recovery when it comes is going to look a lot more like return to the prices of 2006.

This crisis is affecting all our lives, whether we own or rent, and even if we have no intention of selling. The lower taxes collected from properties hurt our budget. Abandoned houses and condos degrade our quality of life. And it's worse in North Bay Village than most other places in Florida.

An unscientific look at the properties on the market in North Bay Village at www.trulia.com shows that of the 321 residential properties on the market, 186 are in some stage of foreclosure. That's 53% of the properties on the market. Compare that with Sunny Isles which also suffered from a gross overbuild of condos and yet has a rate of 38% or Surfside at 42%.

Creating a city wide effort to deal with this has to be the commission's top priority. We are sliding and it's getting worse. The real estate professionals who sell in the city need to be included; the finance companies need to be involved; property owners in danger of foreclosure need help, now. The Commission and administration have been too passive. Not only is our property tax decline worse for this, but we have much lower collections from other tax sources such as commercial properties than most other cities. If North Bay Village doesn't take this problem on now, there may be no North Bay Village in the future. It's that serious.

Kevin Vericker
November 10, 2010

Looming Housing Crisis

North Bay Village is facing a housing crisis. It is not the sort of crisis that has been discussed in the past where there is an inadequate supply of housing. Most cities have learned to deal with that, but a new kind brought on by over-supply, bad mortgage decisions and declining demand.

The building pictured, 7525 East Treasure Drive, is one of several abandoned projects in the city. There are others, vacant lots, unsold units, abandoned houses, all throughout our community.

The Lexi filed Chapter 11 on June 23, 2010, with 50 unsold units out of 164. www.trulia.com, a website that consolidates real estate listings shows 553 homes for sale in North Bay Village, with 255 in distress or foreclosure, 46% of the total properties. It is not restricted to condos, 26% of the single family homes listed are in distress.

The existing condo buildings are in bad shape according to www.condoreports.com, a site that rates the health of the association on a scale of 100 with 100 being the healthiest. Their breakdown is frightening. Here are some samples:

• 360 A 26th percentile
  
• 360 B 18th percentile
  
• Breeze 28th percentile
  
• North Bay Villas 6th percentile
  
• Grandview Palace 6th percentile

and there are more out there.

When buildings are so poorly rated, the property values decline, the risk of foreclosure increases and the risk of board bankruptcy is overwhelming.

North Bay Village has taken very few steps to address this issue. It's established that our property values fell 26% in the crash, that only Homestead saw a worse decline with a marginal difference, HUD (Federal Housing and Urban Development) ranked us the highest in Miami-Dade for neighborhoods at risk and we can see it. A simple walk around the islands confirm that.

The only real attempt so far was an effort, introduced by Rey Trujillo, for the city to condemn under eminent domain a vacant lot on Harbor Island, leased to Al Coletta, and turn it over to Scott Greenwald, to build new low income housing. It failed as it should have. It would have been just another North Bay Village Trujillo Tax spending money we don't have for things we don't need.

We don't need new buildings - we need to rehabilitate the old ones and create a city initiative to address this crisis. It's not going away and it's going to get worse.

There is federal, state and county help to address these issues but the commission needs to act now to be able to take advantage of the help, and we've seen nothing. These are questions we need to put to all the candidates for this November's election:

• What is your plan to reduce foreclosures in North Bay Village?
• How do you propose to address the abandoned buildings?
• What's the next step to stabilize North Bay Village?
• How will you ensure that the development money flying around North Bay Village is used transparently?

Kevin Vericker
August 16, 2010