This bubble is not latex but stainless steel’

By Gimleteye

Taken from the Eye on Miami blog

“It’s Lonely in Condo Land”, an editorial in [Sunday’s] Miami Herald, expresses a point of view that the paper blocked during the building boom. Never mind that the hubris, political corruption, and greed that resisted quantification until it was fossilized in trillions of dollars of worthless debt: there was plenty of hard evidence in data collected by county planning staff that the hyperbolic increase in housing supply had outstripped rational demand.

But publishing these facts to highlight the Age of Stupid in Miami did not serve the interests of the Herald at the time. Views like those of Carl Hiaasen and Jim Morin were cordoned off and properly “balanced” with breathless tales from the growth-at-any-cost spin doctors. The Herald is far from alone in missing the biggest story of the new century as it unfolded: the Great Recession or the Little Depression.

It is interesting to re-read what the Herald did publish back in the day when criticism of the building boom was not allowed because advertisers– from furniture suppliers to production homebuilders– exerted so much influence in the paper’s executive suites. Here is an excerpted version from one June, 2005 letter and the famous 2005 editorial by a past president of the Latin Builders Association, a few weeks earlier. Read them, side-by-side, to get a flavor of where we have been:

Posted on Sun, Jun. 12, 2005

URBAN DEVELOPMENT BOUNDARY

We can build homes and protect environment

If opponents to making land available for homes for working families succeed, newcomers will find a housing market limited to unaffordable suburban resales or cramped, urban high-rises. Environmentalists want to persuade the public that moving the Urban Development Boundary (UDB) and opening some land to well-planned community development is a dangerous idea. What is dangerous is distorting the truth…

Miami-Dade County will soon face a shortage of single-family housing that will threaten its economic health, businesses and residents. The shortage will not be remedied by urban infill — building housing units that don’t fit many people’s lifestyles in places where they don’t want to live and at prices that they can’t afford.

… The environment, especially our water supply and the Everglades can be protected. The will exists to build quality homes including all the infrastructure — schools, roads, parks — as well as shopping centers and office and industrial parks that create jobs…Meeting the housing needs does not have to come down to a choice between the needs of our community and the environment. We can accommodate both if we plan carefully, demand quality and work together.

GUS GIL, president, Latin Builders Association, Miami

Saturday, May 21, 2005
THE MIAMI HERALD

‘BUILD THEM, AND THEY WILL COME’
BY WILLY BERMELLO

Mega economies, one fueled by people and the other by barrels of oil, have propelled cities such as Shanghai and Dubai to the top tier of world-class cities in the 21st century. Both cities, one at the center of the world’s fastest growing economy and the other in the heartland of the world’s largest petroleum reserves, share an uncommon characteristic: There are more construction cranes than traffic lights; and, although the unparalleled growth has outpaced infrastructure services in many instances as well as the growth-management efforts to properly support and service this growth, all experts agree that the future of these emerging world-class cities is ahead of, not behind, them.

World city

Halfway around the world, Miami, the most international U.S. city outside of New York, is going through a similar transformation but without the oil or zillion people. This has some economists and bankers worried.
Lately, there has been more written about the “condo bubble” than the weapons of mass destruction during the Iraq war. There is a relationship in both phenomena: If you say it often enough, you actually start believing it, and soon enough you’re on your way toward a self-fulfilling prophecy.

Miami is a great world city, and there is no going back. Build them, and they will come.

… * In comparison to other U.S. cities such as New York, San Francisco, Chicago and Washington, D.C., Miami still offers an attractive price-point advantage. Along the Brickell corridor, new waterfront condominium properties average between $450 to $500 per square foot. Only a few Miami Beach projects have broken the $1,000-per-square-foot ceiling, which in New York City today would be considered “affordable.”

… Miami is hot, hot, hot. The news clips of cocaine cowboys, the Mariel boatlift and the McDuffie riots have been replaced with the beautiful skyline of CSI Miami; with Miami and Miami Beach becoming the preferred hangout for wealthy urbanites, recording artists, movie stars and sports celebrities. J Lo, Ricky Martin, Gloria Estefan, A-Rod, Shaquille O’Neal and Lenny Kravitz all have one thing in common: Miami.

Safe harbor
With the volatility of capital markets and in spite of last year’s increases in the Federal Reserve’s borrowing rates, which will continue their upward but moderate adjustment throughout the year, real estate continues to still be a safe harbor for investors, whether it be equity or the purchase of a condo in South Florida, where doubling of your investment in less than two years is commonplace. If you have euros or British pounds, then you buy with a built-in 30 percent to 40 percent discount.
Miami deserves its place next to Shanghai and Dubai. More important, it deserves our confidence.

The bubble is not latex but stainless steel.

Willy Bermello is a Miami architect, developer and past president of the Latin Builders Association

http://eyeonmiami.blogspot.com/2009/09/this-bubble-is-not-latex-but-stainless.html