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Article
Courtesy of The
Sankei Shimbun (Translation)
By By
Hiroo Watanabe
,
Washington
correspondent for The Sankei Shimbun
Published
December 20, 2010
TAMPA
,
Fla.
-- On
November 2nd, the voting day of the midterm elections,
Florida
had a local referendum which may indicate the future of state, which has
been suffering from the most serious real estate crisis in the
U.S.
An amendment of the state constitution, which would provide citizens
the right to vote on changes of land development plans in their
communities, was considered by the voters. The Amendment was
originally aimed to stem overdevelopment which has caused a continuous
decline of housing prices and the destruction of environment. As
a result of all-out opposition campaign by the local business community,
the amendment was rejected, however, the battle which divided
Floridians revealed a dilemma for the whole
US
economy, which remains dependent on the oversupply of housing even
after the current financial crisis has ended.
Spreading
out in front of me is a vast housing land, on which, however, only several
houses are seen. It used to be wetland. The windows without curtains are
evidence that no one lives in these houses. This housing land is located
in
Pasco
County
, north of
Tampa
on the West Coast in
Florida
. This ‘unfinished’ new town has been under development since 2004.
According to the original plan, there should have been 6,000 houses built
on 4800 acres of land. However,
in reality, only about 230 units have been constructed.
“We
sometimes see deer, but rarely people”, says Bill Baldwin, 69, who is
with his wife and a dog on a leash. They moved into the county from
Chicago
twelve years ago, attracted by lower state taxes and the moderate weather.
Looking at the land covered by weeds, they comment bitterly, “This is
why the housing market can never get out of the bottom”.
The
county with a population of approximately 460,000 has already approved
“300,000 residential units” for its future house building plan. The
agricultural lands, forests, and wetlands which were sources of the
drinking water supply for the residents of
Florida
have been transformed into residential lands one after another. The county
has five commissioners who have the power to approve all changes in land
use. A family member of one of the commissioners owns a real estate
company. It is said that the commissioner’s family has sold some of its
own farm land for development.
Because
of the cozy relationship between developers and municipalities, so many
residential areas and houses have been built and never occupied.
”The residents don’t have any choice but to watch quietly as
their property values decline” Jill Yelverton, one local resident, says.
She was a journalist and continues opposing the overdevelopment in her
community.
Land
speculation in
Florida
was one of the triggers of the Great Depression in 1930s. Still, real
estate has been the biggest industry of the state, forming the most
influential business group, not only economically but also politically.
The influx of population from the
Midwest
and Northeast where the winters are very cold has helped the industry grow
continuously. In the 2000’s, the abundant money accelerated by the
Federal Reserve's low interest rate policy flowed into Florida from Wall
Street, allowing housing development in the area to become overheated.
Tens of thousands of mortgages were securitized by Wall Street’s
investment bankers and were sold to investors all over the world. The
‘Lehman Shock’ in 2008 made these securities worthless. In a sense,
Florida
was one of the epicenters of the current global financial crisis just as
much as Wall Street.
Nonetheless,
Florida
still remains dependent on the ‘housing economy’. Even now, there are
300,000~400,000 vacant houses in the state. Despite that, in the last
three years, local governments have approved changes in land use which
will add 550,000 dwelling units along with more than 1.4 billion square
feet of commercial space. This space is equivalent to 2,780 Tokyo Domes,
the home ground of Yomiuri Giants baseball team. These lands are waiting
for construction.
The
excessive inventory is making housing prices decline further. So many
homeowners, despite their difficulty in making payments, can neither
refinance their mortgages nor sell their houses, because they owe more
than the current property value. As a result,
the
foreclosure rate in Florida is still the worst in the United States.
“Florid’s politics and economy, of developers, by developers, and for
developers, shall not work anymore”, Lesley Blackner, 48, a lawyer in Palm Beach,
asserts. She was one of the volunteers who led ‘Florida Hometown
Democracy’, a local residents’ campaign for the establishment of
Amendment 4 to the state constitution. The amendment, which was rejected
by voters in a state referendum on November 2nd, would require that any
amendment to a community’s local comprehensive growth plan must be
approved by a majority of that community’s voters. The amendment was
expected to stop the overdevelopment which totally ignores the actual
population growth and the impact on the environment in a community by
seeking the residents’ will, and could have been a revolutionary attempt
for United States
.
According
to local opinion polls conducted in May, Amendment 4 got the support of
sixty percent of the population in Florida. Local business groups were afraid that development could slow down and
local companies could lose business opportunities if the amendment were
approved. The campaign to oppose the amendment led by the state Chamber of
Commerce accelerated.
“Amendment
4 kills jobs and raises taxes”. The television ads launched by the
opposition group which called for voters to ‘vote no’ on the amendment
produced such a huge impact that it changed the public opinion of
Amendment 4. Candidates running in the midterm elections regardless of
party announced opposition to the Amendment, fearing being labeled
‘anti-job candidates’. Local newspapers, whose advertising revenues
are dependent on the region’s businesses, published editorials against
Amendment 4 one after another.
Finally,
the approval rate for Amendment 4 began to decline. In the state
referendum on November 2nd, only 33% of the voters approved the amendment,
while 67% of them opposed it. “The people chose the status quo”,
Blackner said.
Volunteers
are filled with a sense of powerlessness. Looking back at their campaign,
one of them says, “We challenged Florida’s culture of growth”. The referendum in
Florida
highlighted the fact that both politics and business in the
U.S.
have started to pursue their short-term benefits again as if they have
forgotten the lessons of the recent bubble.
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