South Florida Real Estate: Boom & Bust - Reflections on the Past and Realistic Perspectives on the Future
Remarks by Matthew Greer
Carlisle Development Group
We all know the financial issues that are hitting our [national] economy, but our local economy is sort of a different beast altogether. When we look at some of the slides talking about office supply, residential supply, industrial supply, these are the other cities. One of things that I think gets lost is that Miami is or has been the poorest large city in the country and people forget that. With all of the glamour, and all of the boats, and all of the Ferraris, they forget that we are a poor, uneducated, immigrant-based service economy. Our median income in this city for a family of four is $45,000. There are 150,000 families in this city that make less than one-half of that. And when you employ people like my company employs -property managers, accountants, clerks - I’m losing those folks to Chattanooga, to Charlotte, to cheaper cities throughout the country because they can’t afford to live here. It’s not because they can’t afford the boat they wanted, or the condo they wanted because they can’t find anywhere to rent. I think it’s really important not to lose sight of that.
Education is a Key Concern
I think that some of the cities that we looked at were interesting comparables from an inspirational point of view for Miami, but not from an actual metrics point of view. Los Angeles is used as a comp city for Miami, often because of the weather and the post automobile kind of city. It also has a great defense industry and a great entertainment industry. It also has a much better education system unfortunately, because Florida is 50th in the county in per capita spending on education, behind Mississippi. I’m sure that the huge budget cuts this year won’t fix any of that. So I think that our issue is going to be trying to tackle the issues of a city that is becoming, unfortunately, with the rest of the country a little bit less economically egalitarian, a little bit more disproportionate in our culture, as John would say, and really trying to look at some of these issues.
Affordable Housing is a Key Concern
We heard that half of all the infrastructure, half of all the housing, and buildings built by 2030 are going to be built between now and then. I query who is going to pay for that? If our people are getting poorer and they are getting hit with more and more aggressive taxes, how are they going to afford new construction, which for me has tripled in the last six years on a per square foot basis? Who will be paying the mortgages on new construction? When you look at some of these older successful cities they have a lot of amortized infrastructures. They have 100-year-old systems and buildings and so they can afford to rent those things at different price points than those of us who are going through much longer entitlement processes, much higher construction cost, much more stringent code requirements, and all of the costs linked to those things. So I really question these things, as much as I am hopeful about the third generation Miamians, I’m really hopeful that we achieve the dreams that our PR people have set out for us. But I think those dreams are going to have to be tempered by a reality of who actually lives here and what we can afford to pay for new construction.