Tuesday, November 07, 2006

For the Middle Class, Miami is a "Paradise Lost"

Despite what you may think about Miami Police Chief John Timoney, we like the idea of him watching over us. He's a tough guy's tough guy. We feel safer when we know he and fellow police officers are patrolling the beat.

Too bad many of them can't afford to live here. According to Sgt. Armando Aguilar, president of Miami's Fraternal Order of Police, none of the new cops graduating out of the academy can afford to buy a home in Miami-Dade or any nearby counties. In fact, the force is losing officers left and right to other places that pay better and where living is less expensive. Miami police officer salaries start at $37,817 which ranks Miami 36th out of 43 other municipalities reporting annual pay data. But that won't buy a cop a house here.

Or new teachers, nurses, and many more of the community's middle-class who are in the same sinking boat. Consumer-price inflation is rising much faster than wages. According to an article in the Miami Herald, "inflation in the Miami-Ft. Lauderdale area was running at 5.1 percent, nearly twice the national rate."

Nearly twice the national rate.

Would someone please tell us what is going on?

Last week one of our staff members had to pick something up in Plantation in Broward county from a guy who was selling his house. The house wasn't new or that big, but it did have nice "curb appeal" in a neighborhood of unassuming homes. Inside, marble floors, an upgraded kitchen, two bedrooms, one bath, a two-car garage, and no backyard to speak of. He wanted $425,000 for it. He pointed out another house that had recently been sold. Its curb appeal was sorely lacking but it sold for close to half-a-million dollars. Why? It had a pool.

Something has to give. Teachers and police in Miami-Dade in separate incidents began standing on street corners last month waving placards and shouting at anyone who will listen about low wages and shrinking retirement funds. We believe these are the first signs of a crisis hovering just beyond the horizon that no one in local government seems to be addressing. Maybe nothing can be done until the market "corrects itself" with falling home prices. But what will initiate that process?

According to Bruce Nissen, a professor at Florida International University, he sees the workforce organizing more and more protests. Will that be enough to set the "corrections" in motion? As much as we would like to believe it will, we think that, without government action, protests will devolve into strikes effectively shutting down the economy and disrupting our lifestyle to the point where draconian measures will be called up to fix the problem. Unfortunately, we don't think falling real estate prices will be the total answer. However, building affordable housing is part of the answer. But if developers can't make a profit against their investment in land, the rising cost of labor and materials, why bother building anything at all? Even though most people can't afford to buy into the high-end condo building boom in Miami-Dade, if that sector in the local economy collapses, thousands of people will be out of work. It's a double-edged sword for sure and we don't pretend to have any answers. Instead, when considering what tomorrow may bring, we face the future with fear and trepidation.


Anonymous said...

Police officers, and teachers cannot afford to buy--much less maintain their homes with the current rate of health/home/auto insurances! Some mortgage companies are offering 50 year mortgages...someone please come up with a feasible plan!

Verticus said...

Good point, Anonymous. When you start factoring that into the equation, it begins to look even more dismal.