South Florida, South of the Border
By: Rene Velez Feb. 11th, 2010
I have lived here in South Florida for 34 years. I arrived just after the major real estate bust of 1974 but I do recall that the pain was still evident as many where looking for jobs and real estate was cheap and in some cases development was essentially frozen. Since then we have had several cycles of boom and bust just as the rest of the nation has. Yet somehow the past two years are in fact a bit different.
The S. Florida U-Economy:
South Florida in particular has enjoyed mild recessions even when other parts of the country fared far worse. There are several reasons that have surfaced over the years. Some like to point out that illicit revenues from the drug trade has helped prop up the local economy. I believe that certainly there has been an impact but I would not go as far as to say that it has built Miami as some have suggested. Nonetheless, there is a great deal of truth to what some have called the “Underground Economy” in South Florida. This ranges from drug money, to organized crime funds from the North East and Mid West to flight capital from politically and economically unstable South American and Central American countries. In fact this has helped create an international banking system in South Florida perhaps more so that drug money. There is a long history in Florida of illicit transactions. From save trade, to rum running to exporting contraband to other countries. The geographic location and miles and miles of ocean front property makes it an easy peninsula of entry and exit. In fact geography is a major factor mild historical recessions.
Geography
As it turns out the elderly have been migrating into Florida for many years. The milder winters, and the warm sunshine has not only brought in senior citizens which make residence in places like Century Village and Miami Beach. They have in fact brought with them their wealth, their extended family and their social security checks. South Florida has a very high ratio of geriatric doctors compared to other parts of the nation, and indeed has helped create an industry of medicine. This has helped stabilize the local economy as it creates an underlying stable level of spending that is typically not affected by economic cycles. Geography plays an important aspect of this phenomena.
Then we must not forget that Florida has been a tourist destination since the beginning of the industrial revolution. Notable names such as Henry Flagler who built a railroad transportation highway all the way to Key West, realized early on that if you built it they will come. And come they have. Today it is not just the rich who seek the warm and kind weather of Florida as an escape from the cold. Millions flock to places such as South Beach and Ocean Drive to soak in the sun, drink their fill and dine at our restaurants. Where else can you get bargain prices for a piece of paradise in the middle of winter.
Then there are those factors that may well be of a lesser impact but should be noted. Miami is still a convention center destination. Where businesses come to show there products and wares, vacation and give seminars. It also has a considerable motion picture, movie and photography industry. When fashion designers from New York can not shoot up north or are preparing for their spring and summer catalogs, their choice location for filming and photography is South Florida. Longer days and the angle of the Sun provide for great natural light. And the warm weather are simply an opportunity few turn down. The Art Deco tones and Architecture is prime real estate and our beaches are still natural wonders or a paradise unspoiled.
The Bitter Cold in South Florida
The last two years has seen a considerable drop though in the local economy. As if an omen of the hard times we recently saw record cold days and had reports of snow flurries in Kendall Town and Country a local strip mall in Miami Dade County. “Snow Flurries – OMG”! I am seeing businesses close, retail centers with many vacancies, restaurants with no patrons and many tales of the unemployed. Real estate prices are back to 2000 and 2001 prices and in some cases may be back to 1990 levels. Seems like everywhere I go there is a shortage of small business credit, consumer credit, customers paying their bills late and concerns on cash flow. A recent networking event was filled with the employed and unemployed all vying for opportunity. There is a great deal of shoe leather being spent on trying to generate sales.
All in all there is a vibe, an undertow of concern and worry that stretches across the poor and the well to do unlike I have ever seen in South Florida. It’s a feeling I have not felt ever in all my years here in Florida. I recall pre-Reagan years concerns of the economy and mortgage rates of almost 18% and yet, not as much anxiety. What exactly is it, except of course for the obvious?
Conclusion
These are no doubt hard times but this too will pass. Albeit it will take more time than what history would suggest. I think it’s what people don’t say, or at least loudly, that is creating a negative influence on turn around. People are disappointed at the trend of bad news upon bad news and a loss of economic positioning. Large issues such as global competition, healthcare, a lack of government cohesiveness in solving issues, massive national deficits, the outlook on healthcare reform, the growth of real wage levels, a failing US infrastructure. You know just writing this is reason to panic.
Clearly, none of these issues occurred overnight. By the same token none will be fixed over night. So we must as Warren Buffet said, “adjust our expectations”. But there is more to it than that. We need accountability from our leaders. We need government to lead by example, and we need large corporate America to exercise restraint, ethical behavior and position invested capital, economic and human, to long term goals in a global setting
We need a national comprehensive strategy. A failure towards this end will only lead is further “South of The Border” than what our citizens are prepared to accept.
By: Rene Velez Feb. 11th, 2010
I have lived here in South Florida for 34 years. I arrived just after the major real estate bust of 1974 but I do recall that the pain was still evident as many where looking for jobs and real estate was cheap and in some cases development was essentially frozen. Since then we have had several cycles of boom and bust just as the rest of the nation has. Yet somehow the past two years are in fact a bit different.
The S. Florida U-Economy:
South Florida in particular has enjoyed mild recessions even when other parts of the country fared far worse. There are several reasons that have surfaced over the years. Some like to point out that illicit revenues from the drug trade has helped prop up the local economy. I believe that certainly there has been an impact but I would not go as far as to say that it has built Miami as some have suggested. Nonetheless, there is a great deal of truth to what some have called the “Underground Economy” in South Florida. This ranges from drug money, to organized crime funds from the North East and Mid West to flight capital from politically and economically unstable South American and Central American countries. In fact this has helped create an international banking system in South Florida perhaps more so that drug money. There is a long history in Florida of illicit transactions. From save trade, to rum running to exporting contraband to other countries. The geographic location and miles and miles of ocean front property makes it an easy peninsula of entry and exit. In fact geography is a major factor mild historical recessions.
Geography
As it turns out the elderly have been migrating into Florida for many years. The milder winters, and the warm sunshine has not only brought in senior citizens which make residence in places like Century Village and Miami Beach. They have in fact brought with them their wealth, their extended family and their social security checks. South Florida has a very high ratio of geriatric doctors compared to other parts of the nation, and indeed has helped create an industry of medicine. This has helped stabilize the local economy as it creates an underlying stable level of spending that is typically not affected by economic cycles. Geography plays an important aspect of this phenomena.
Then we must not forget that Florida has been a tourist destination since the beginning of the industrial revolution. Notable names such as Henry Flagler who built a railroad transportation highway all the way to Key West, realized early on that if you built it they will come. And come they have. Today it is not just the rich who seek the warm and kind weather of Florida as an escape from the cold. Millions flock to places such as South Beach and Ocean Drive to soak in the sun, drink their fill and dine at our restaurants. Where else can you get bargain prices for a piece of paradise in the middle of winter.
Then there are those factors that may well be of a lesser impact but should be noted. Miami is still a convention center destination. Where businesses come to show there products and wares, vacation and give seminars. It also has a considerable motion picture, movie and photography industry. When fashion designers from New York can not shoot up north or are preparing for their spring and summer catalogs, their choice location for filming and photography is South Florida. Longer days and the angle of the Sun provide for great natural light. And the warm weather are simply an opportunity few turn down. The Art Deco tones and Architecture is prime real estate and our beaches are still natural wonders or a paradise unspoiled.
The Bitter Cold in South Florida
The last two years has seen a considerable drop though in the local economy. As if an omen of the hard times we recently saw record cold days and had reports of snow flurries in Kendall Town and Country a local strip mall in Miami Dade County. “Snow Flurries – OMG”! I am seeing businesses close, retail centers with many vacancies, restaurants with no patrons and many tales of the unemployed. Real estate prices are back to 2000 and 2001 prices and in some cases may be back to 1990 levels. Seems like everywhere I go there is a shortage of small business credit, consumer credit, customers paying their bills late and concerns on cash flow. A recent networking event was filled with the employed and unemployed all vying for opportunity. There is a great deal of shoe leather being spent on trying to generate sales.
All in all there is a vibe, an undertow of concern and worry that stretches across the poor and the well to do unlike I have ever seen in South Florida. It’s a feeling I have not felt ever in all my years here in Florida. I recall pre-Reagan years concerns of the economy and mortgage rates of almost 18% and yet, not as much anxiety. What exactly is it, except of course for the obvious?
Conclusion
These are no doubt hard times but this too will pass. Albeit it will take more time than what history would suggest. I think it’s what people don’t say, or at least loudly, that is creating a negative influence on turn around. People are disappointed at the trend of bad news upon bad news and a loss of economic positioning. Large issues such as global competition, healthcare, a lack of government cohesiveness in solving issues, massive national deficits, the outlook on healthcare reform, the growth of real wage levels, a failing US infrastructure. You know just writing this is reason to panic.
Clearly, none of these issues occurred overnight. By the same token none will be fixed over night. So we must as Warren Buffet said, “adjust our expectations”. But there is more to it than that. We need accountability from our leaders. We need government to lead by example, and we need large corporate America to exercise restraint, ethical behavior and position invested capital, economic and human, to long term goals in a global setting
We need a national comprehensive strategy. A failure towards this end will only lead is further “South of The Border” than what our citizens are prepared to accept.
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