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Developers and the South Florida Drought

by ALAN FARAGO

We finally get a glimpse how serious local and state water managers view the drought in the Miami Herald today, through the lens of salt water intrusion into drinking water wells along the coast.

South Florida’s shallow water aquifer, under hydraulic pressure from the vast expanse of Everglades, holds back the intrusion of salt water through Florida’s porous limestone. As the Everglades and the aquifers dry out, salt water seeps in, a phenomenon that began with the draining of the Everglades and is now rapidly accelerating.

Developers have been driven to flights of fancy through the biggest construction boom in Florida history. They scoff at the notion that construction should be curtailed. What would bring about such a catastrophe? Not enough water.

There is a connection between the drought, planning initiatives that are throttled by the building lobby (like the South Miami-Dade Watershed Study), and the constant pressure to change zoning and speed permits by such powerful downtown law firms like Greenberg Traurig.

Florida is burning and its aquifers are draining. And, in the midst of the biggest housing market crash since 1926, the development lobby is still pressing forward in the only way it knows how to: more zoning changes and more building permits.

As we have frequently noted, overdevelopment of South Florida has stripped the elasticity from supply and demand of fresh water to millions of Floridians-supply from the Everglades and Lake Okeechobee and demand from big agriculture and cities.

Restoring the elasticity means providing more surface water storage. That’s the ‘service’ nature used to provide in the Everglades until water managers ditched and diked it, decades ago, and allowed massive fresh water withdrawals whose consequence is severe drought in a region that averages more than fifty inches of rain a year.

In Miami-Dade County, it would seem obvious that it is a very bad time for the development lobby to be yammering for more zoning changes and more permits for large scale developments in farmland, especially land outside the Urban Development Boundary.

But building in farmland is the model that drives county government–here, and in the rest of Florida–, the same way that building condominiums drives the city of Miami.

On May 4th Goldman Sachs released a report, “Florida-The Epicenter of the US Housing Bust”.

“Although the housing downturn has long featured prominently in our call for US economic weakness, we do not expect it to cause an outright recession. But there is at least one state-namely Florida-where the housing downturn is likely to cause an outright recession.”

The irony of high rise condos topping off the Miami skyline, funded by speculators likely to run away from their deposits, at the very same moment water is running out is biblical.

“Our analysis implies that businesses with significant sales in Florida could encounter problems for an extended period of time. Moreover, Florida could be a ‘canary in the coal mine’ for other regions of the world economy that have recently seen runaway housing and construction booms.”

On Monday at the county commission, there was not a hint-not even a scent-that local elected officials were taking into account the drought, or, crashing housing markets.

A majority of Miami-Dade county commissioners, led by Natacha Seijas, had been poised to kill the study meant to insure that there would be enough water, in the future, to accommodate growth and protect Biscayne Bay.

The county commission is supporting more than a billion dollars of public investment in new drinking water infrastructure that taps into the Floridian-a much deeper aquifer than the fresh-water bearing Biscayne Aquifer, replenished by the Everglades and Lake Okeechobee. (Floridians will rue the day that the federal government, through the US EPA, delegated authority for managing the Biscayne Aquifer to the State of Florida.)

But destroying the aquifer that you can see and measure above ground (that would be the sole source Biscayne Aquifer), in favor of a deep, underground aquifer that may or may not be plentiful enough for future needs-is idiocy on a grand scale.

The promise of the Floridian is that this prehistoric water source is abundant (it also happens to be where trillions of gallons of municipal and county wastewater is leaking, but that’s another story). And it may be a pipedream, too: it will take years to fund and to build infrastructure to tap into the Floridian.

Pray for rain. Pray that sanity rushes in, and not salt water.

Goldman Sachs writes: “Florida has the largest amount of excess housing supply in America. the reason for the record supply-demand imbalance is that housing starts in Florida have been far in excess of underlying demographic demand for several years. As of 2006, we estimate that the housing stock was growing roughly twice as fast as the population.”

Of course, in Miami-Dade County we know first-hand that what Goldman Sachs prints is true because we have watched the scamming for decades: the Miami mayor, city commission, and the majority of the county commission have justified one zoning change after another in favor of developer/campaign contributors like addicts rationalizing whatever they do for their next fix.

And don’t forget the Florida legislature in Tallahassee, an extension of the farmer/builder lobby that has spent the past eight years insulating the Florida constitution from attack by citizens, creating a virtual fortress to protect the prerogatives of suburban sprawl.

Here in Miami, consultants and engineers, with maps showing demographic surges, shortage of land, various obstructions to building densities in areas already served by municipal services-are no different from lobbyists for the tobacco industry that persuaded the states and Congress that cigarette smoking was not harmful to public health.

The ownership of a platted subdivision or a condominium in downtown Miami can go through receivership, or not, can be sold or re-sold, can be purchased by a hedge fund, a vulture fund, or money launderers. Some builders can get rich or lose their fortunes.
Once the concrete pad is poured, the landscape is permanently altered.

Once the cement hardens, every argument about ‘mitigation’ is moot. In the absence of precaution, wisdom, or caring for the public good, what happens next is almost as certain as death and taxes.

And here is the consequence in Florida:

“The potential for large house price declines is also greater in Florida than just about anywhere else in the country. Prices in the major metropolitan areas have risen further than anywhere else since 2000, even compared with erstwhile boom cities such as Los Angeles or Las Vegas.”

“house prices would have to fall by over 40 percent to get back to fair value immediately.”

” businesses with significant sales in Florida could see problems for an extended period of time. This is most obvious for the homebuilding industry but is likely to extend to retailers and other businesses that rely significantly on state demand. Florida may be the ‘canary in the coal mine’ for other regions that have recently seen runaway housing booms.”

Goldman Sachs also writes, “At this point, a Florida recession is still a forecast, not a fact.” The investment bank expects indexes to turn negative before the end of 2007.

We estimate that the county commission will begin talking about rescuing the building industry with incentives and more streamlined permitting around the same time.

ALAN FARAGO lives in Coral Gables. He can be reached at alanfarago@yahoo.com.

 

 

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Alan Farago is president of Friends of the Everglades and can be reached at afarago@bellsouth.net

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