The Florida Chamber of Commerce has announced plans to raise as much as $65 million to fight a constitutional amendment sought by citizens supporting Florida Hometown Democracy.
The FHD measure would require that changes to local zoning plans—required by Florida law of each and every municipality and county—to first run the gauntlet of local voters before being voted on by local legislatures.
This moment in Florida history is framed by the biggest housing bust since the 1920’s.
The soul of Florida is at stake in the battle by Florida Hometown Democracy against the Chamber of Commerce and the building and development lobby.
Florida’s developed landscape did not become such a point of contention, by coincidence.
But for a mortgage industry that proliferated through the use of obscure financial derivatives, multiplied from the lowly consumer or commercial mortgage, there would be no incipient rebellion by citizens.
What is visible on the ground are for-sale signs, rising taxes, tightening credit, struggling production home builders and condo developers.
What is less visible, is how the last stage of the building boom, now in cinders, used financial engineering to sell distant investors on high returns pegged to pools of underlying packages of mortgages.
The trick, now being revealed in crashing financial markets–and not just homebuilders–was in mis-marking risk by laying off low quality development against higher credit quality debt.
What Wall Street persuaded investors of financial derivatives, (too complex for all but the most sophisticated analysts to understand), goes something like this. Imagine a mutual fund (remember, this is an imaginary example) comprised of many different mortgages. Now in this fund, there are a few dogs — strip malls in bad neighborhoods, cheap, platted subdivisions two hours from any source of work– but on balance, the risk of having some dogs is minimized by returns the fund will generate on better quality malls and higher priced subdivisions.
Now, more than a trillion dollars of real estate investment–across the United States–is based on this premise: that the value of the fund will not be affected by the risk of default, if the dogs fail.
Put another way: Florida’s growth is shaped by financial engineering based on the performance, not of better quality community design, but by the lowest common denominator.
On the ground you see strip malls and platted subdivisions by the thousands. What you don’t see is how the entire financial system that depends on diversifying risk, fails to account for what people want and what people need in terms of quality of life, the environment, and principles of “sustainability”.
Builders complain about their critics: “we are only building what the market wants.” It’s a fallacy. Builders build what bankers can finance.
And bankers, in this case Wall Street, will finance whatever generates the most commissions and bonuses for top shareholders, absent regulation.
What Florida Hometown Democracy and its amendment says, in fact, is that Floridians no longer trust either government or business to lead the way in the design and plan for growth.
And with good reason: what has government or the growth machine done to earn anything but the anger and enmity of a majority of Floridians?
In the 1920’s, Florida was a sleepy and relatively empty state. When real estate markets cratered, for the most part Florida itself was intact.
80 years later, Florida is a much different place. On the issue of water alone, Florida’s growth has manifestly failed to protect both public health and the environment.
It is the pressure for more growth, for instance, that is the root cause of government agencies allowing benzene to contaminate the drinking water supply for Miami-Dade.
The pressure for growth is also what caused recommendations in the most comprehensive watershed study undertaken anywhere, anytime, to be shelved by Miami-Dade county commissioners who found the whole idea of restricting growth to serve people to be distasteful in the extreme.
These stories–how the unallocated costs of growth continue to pile up in multi-billion dollar increments, even to the point of putting people in the way of cancer–could be repeated anywhere in Florida: Tampa, Jacksonville, Orlando, Pasco County, Collier or the Florida Keys.
This time, as ‘for sale’ signs sprout like weedy species across the state, it is manifestly clear that business interests, led by the growth machine and building lobby, have no plan, no idea, and no interest in taming the costs of growth imposed on citizens and ordinary people.
There is little question that the Florida Hometown Democracy measure will pass the test of state voters, if enough signatures and be gathered and enough money raised to communicate with Floridians.