| July
31, 2007
Why the Chamber of Commerce Wants
to Kill Hometown Democracy
Battle
for the Soul of Florida
By ALAN
FARAGO
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 plansórequired
by Florida law of each and every municipality and countyóto
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.
Floridaís
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 ret
urns 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 recommendat ions 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.
Alan
Farago writes about politics and the environment. He lives
in south Florida.
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