Monday, June 11, 2007

"There is no crisis in housing." Manny Diaz, City of Miami Mayor

That statement appeared as the title to the mayor's editorial in today's Miami Herald. It goes right up there with these:
  • "I am not a crook." President Nixon
  • "I did not have sexual relations with that woman, Miss Lewinsky." President Clinton
  • "Major combat operations in Iraq have ended. In the battle of Iraq, the United States and our allies have prevailed.' – President George W. Bush, aboard the USS Abraham Lincoln under a banner declaring 'Mission Accomplished'.

These quotes have all come back to haunt their speakers. We suspect that Mr. Diaz' assertion will to.

UpDate (6/12): The Pollyanna Mayor of Miami is described by the Miami Herald as "unaware of the loans and grants" from his housing director Barbara Gomez to an ex-con husband. ''I'm extremely concerned,'' he said late Monday. And, it appears, extremely unaware of what's happening in his administration.

UpDate (6/13): It appears the "haunting" is happening quicker than we expected. Today the Miami Herald reveals: "Auditors said city housing chief Barbara Gomez's department repeatedly awarded tax dollars to developers without evaluating their projects against other proposals.

'There really wasn't any competitive bidding -- that was one of the biggest findings,' Auditor General Victor I. Igwe said Tuesday.

Auditors found another troubling trend: one in four loans in the city's $73 million portfolio was in default as recently as January -- diverting dollars from badly needed affordable housing."

Pollyanna Manny is reported as having no comment until he finishes reading the report.

UpDate (6/28): The Miami Herald reports that the Miami city manager is forcing the Godfaddah (aka Miami Housing Director) to take an early retirement. Downside: She may walk away with a pension worth $1 million.

UpDate (7/13): Gomez is fired and loses million dollar pension. Also fired, Mary Conway, Chief of Operations, for allowing a group of employees known as "The Firm" to operate a private business out of that department.


Disgusted taxpayer said...

Typical. Manny Diaz is all talk and no substance. He thinks if he can lie enough people will believe him.

Something like $10 Mil to $16 Mil is missing from the City of Miami. Advanced housing loans? Uncollectable debt to Manny Diaz campaign managers is more accurate.

Frank Abignale, Jr. said...

Zesty and jammy, with cinnamon, cherry and spicy anise notes and a lingering finish. A fine poop.

It is time to bring the Poopy Heads back.

Verticus S. Erectus said...

Missed your comments, Frank. Figured you must be "on the run" again. Glad to see you back. As for bringing back the Poopy Heads, wallowing in that stinking mire took its toll on the psyche. Really. It was depressing. Still, when you phrase them as "Poopy Heads," you get me to thinking maybe we should release a set of bobble head "Poopy Heads" which only shows we truly need counseling.

Anonymous said...

We should look at both sides to be objective. This is a letter that was never published in the Herald. You make your own conclusions.

Your article – “Miami’s Affordable Housing Crisis” does a disservice to the people at the City of Miami who have strived for 7 years to turn around a housing program that was, in the 80’s and 90’s, as bad as the County ‘s today. You cite loans criticized in a 1998 HUD audit as if the information is news today. Rather than fight HUD in 1998, the City worked diligently to turn a troubled department around, resulting in over $700 million of affordable housing units being constructed or under construction since 2003. Nearly nothing was delivered in the 80’s and 90’s despite the outlay of millions of dollars.
It is no secret that Miami’s housing program was a disgrace, due to terrible transactions entered into in the 1980’s and 1990’s, combined with a lack of oversight by various administrations in those years, all documented in the 1998 audit. Your article references those same loans, some entered into more than 22 years ago. You don’t state that the 3 loans, out of dozens, which were made since that time and which defaulted were repaid in full with interest.
You also fail to mention (1) the millions of dollars of defaulted loans cited by HUD in 1998 have been collected and redirected to housing projects, (2) the reason many of the loans from that time have not been collected is weak loan documents which hamper the City’s collection efforts , and (3) the significant policy changes implemented since 2000,(and long before the Herald article or the Igwe audit), including requirements to build within a given period of time, requirements that profits from land flipping be returned to the City and long-term affordability requirements.
You cite the 22 year-old West Grove loan. You fail to say that the only requirement imposed by the City in 1985 was that the organization completes construction within 6 months of commencing construction. If they never commence construction, they are not in default - no basis to foreclose. Today, as a result of policy changes, this situation cannot happen.
You mention 40 houses in Overtown, funded in 1995. Only 9 homes (of the 40) were ever started and they were never completed. Again, in the 80’s and 90’s the City routinely gave land and money, including “administrative dollars” for salaries, to non-profits that had no experience in construction and who delivered nothing. Old news again – roundly criticized by HUD in its 1998 audit. The City made the correct decision today to deliver 163 sorely needed affordable housing units to Overtown rather than try to rehabilitate 9 shells that had stood incomplete for years.
You criticize the judgments made in workouts, leaving out key facts. Two of the three “Al Lorenzo” loans, made in 1988 had no collateral. Check with any bank to find out how successful they are in collecting personal guarantees collateralized by a homestead. The City could have litigated, still be in litigation, and have no housing on the site. Or it could decide, as it did, to accept the offer from Yuken and look forward to a September groundbreaking for 31 affordable units. You fail to mention in your criticism of Jubilee Homes that due to policy changes made since 2000, flippers must return their profits to the City – and that is what the City is pursuing. You don’t mention that, today, affordability restrictions are not lifted when a loan defaults.
Regardless of the progress, the need for new policies constantly arises as a handful of grantees find more creative ways of skirting their responsibilities. But don’t lose sight of the fact the policy changes noted above have resulted in huge improvements in the City’s housing program, as evidenced by over $700 million of projects today. Also recognize that this progress was made during a time when CD funds for the City dropped to 60% of what they were in 2000. You have done a disservice to the City and the people who have done a yeoman’s job of trying to clean up the mess from the 80’s and 90’s not only by giving short shrift to their positive accomplishments but also by leaving the impression that they created the mess.