Something very strange is happening in Miami

[Crewleader]

Sunday, Aug 10, 2014

Something very strange is happening in Miami

Florida's biggest city is undergoing a real-estate boom stemming from an unexpected source. But is it a bubble?

Henry Grabar



At the core of a global city, like London or New York, a local might look askance at the skyward hulls of new buildings, knowing that these residential projects, with striking designs by prize-winning architects, do not fulfill traditional notions of housing.

These apartments aren’t places to live, even a few months out of the year, or to rent. They are simply unusually shaped deposit boxes where several million dollars (or pesos, or rubles) can be left in security and secrecy. Economists and elected officials hold that the “safe haven effect” can secure a city’s financial future; critics say it contributes to the irreversible erosion of a city’s character and drives up the cost of housing. Either way, in an era of worldwide turmoil, the phenomenon is on the rise.

The mind-boggling home prices of global finance capitals have so far hogged the headlines. But to really see the power that foreign direct investment can exert on a city’s skyline, you need to go to Miami.

http://www.salon.com/2014/08/10/something_very_strange_is_happening_in_miami/

[House of Roberts]

1. The bubble will burst

when the tide comes in a few years from now.

[DJ13]

2. Safe deposit boxes dont create a healthy economy

Once those things are built they dont contribute much of anything.

It kinda reminds me of the coming collapse of China's real estate market after building several empty cities.

[Demeter]

3. It's a very strange way to behave

buying ugly space in an ugly, corrupt city, in the belief that if you need to sell, some greater fool will come along and willingly accommodate you.

The last time they tried it, the Fed Reserve and Treasury had to bail them all out.

[Fuddnik]

4. Miami: Where Luxury Real Estate Meets Dirty Money

http://www.thenation.com/article/176486/miami-where-luxury-real-estate-meets-dirty-money#


Miami: Where Luxury Real Estate Meets Dirty Money

The buyers come from all over the globe, bearing cash and complicated pasts.
Ken Silverstein
October 2, 2013 | This article appeared in the October 21, 2013 edition of The Nation.


If you fly into Miami International Airport and drive east toward the city and north on Interstate 95, you bypass South Beach and midtown and in about thirty minutes reach the 163rd Street exit. Heading east toward the ocean leads you past several miles of strip malls filled with convenience stores, pawn shops, bodegas, gas stations, chain restaurants, nail salons and an occasional yoga center. Then rising unexpectedly in the distance is a row of condominium skyscrapers so baroque and unattractive that they conjure up the name of only one man: Donald Trump.

You have arrived in the city of Sunny Isles Beach, or “Florida’s Riviera,” as its political and business leaders have dubbed it. Massive skyscrapers along beachfront Collins Avenue include three Trump Towers and three other Trump-branded properties, including the Trump International Beach Resort, where I stayed—very comfortably, I confess—for eleven days in June.

Other luxury properties on the stretch include the gaudy Acqualina Resort & Spa, where the penthouse recently went on sale for $55 million, and the Jade Ocean, which offers “beach amenities thoughtfully conceived to continue attentive service and lavish appointments all the way to the water’s edge” and a Children’s Room featuring Philippe Starck furnishings and a baby grand piano. Meanwhile, ground was recently broken on the Porsche Design Tower, which its developers describe as “the world’s first condominium complex with elevators that will take residents directly to their units while they are sitting in their cars.”

Until the late 1990s, this Miami neighborhood was populated by retirees and tourists and was dotted with dozens of theme motels, many of them named after Las Vegas properties: the Dunes, the Sands, the Desert Inn and the Aztec. Between the 1920s and ’50s, Sunny Isles catered to visitors like Jack Dempsey, Babe Ruth, Grace Kelly, Burt Lancaster and Guy Lombardo, but later became a destination for tourists of modest means.

Everything changed in 1997, when real estate developers and other business groups succeeded in passing a referendum to incorporate Sunny Isles as a town. From that point on, building, planning and zoning decisions were stripped from the Miami-Dade County Commission and put in the hands of the industry-dominated Sunny Isles City Commission, whose current members consist of a real estate executive, a property lawyer and a former advertising executive. What happened next was the most spectacular neighborhood transformation seen in Miami since cocaine money rebuilt the city’s downtown area beginning in the late 1970s.


(snip) much more.

[msongs]

5. the filthy rich, all coddled by our federal, state, and local governments nt

[calimary]

6. Anybody want to bet on how many floors of those towers will wind up underwater - literally?

How high up will the water's edge be, do you suppose?

[Zambero]

7. Singing gondoliers anyone?

Hey, once the streets become navigable canals, Miami will persist in some form as a novel tourist destination. And Miami Beach? In name only.

[Baitball Blogger]

11. They'll make a good barrier reef.

[littlemissmartypants]

8. Thanks, Crewleader.

Interesting.
Love, Peace and Shelter. Lmsp

[NBachers]

9. I read the whole article. As an ex-Miami resident who had to go away for a few years,

I always like to keep my finger on the pulse of South Florida. It looks like business is booming again, and they don't care where the money comes from.

Business as usual.

[StevieM]

10. I still can't believe they shelled out all that money for the Marlins' new stadium

and the team has one of the two lowest payrolls in baseball--hands down.

http://deadspin.com/2014-payrolls-and-salaries-for-every-mlb-team-1551868969

[Warpy]

12. Yes, my money guy told me a few years ago

that wealthy clients (and he has several) are buying up condos up to 10 floors at a time. The slightly less wealthy have been buying multiple units. Those condos are all sitting empty, waiting for Miami to once again become a hot retirement spot.

We'll see. I think it's more likely a foolish investment for several reasons, not the least of which is that the lowest floor or floors will be under water in the not too distant future, nothing will move them off the hurricane track, and by the time Miami comes back into fashion if none of this comes to pass, the units will all be showing the signs of age and neglect. At the very least, they will be dated and unfashionable and will need cosmetic renovation before they can be sold.

But then, the 0.1% have gotten so utterly rich that they have run out of places to put all that money.