Can this city recover from Obama’s stimulus project?
Miami currently leads other cities in the largest request for President-elect Obama’s massive infrastructure building fund. With projects ranging from school renovations to airports, from parking spaces to a new public transit system, the request amounts to $3.4 billion. It is expected to generate 55,355 jobs according to Forbes Magazine .
As if its skyline isn’t filled with towering structures yet, Miami is poised to recover from the financial crisis and prosper. Having joined the real estate boom bandwagon in 2005, it has experienced significant growth in the housing sector for both low and high-rise units. Alex Shay, a Miami real estate specialist once observed, “Miami real estate is one of the hottest markets in the United States. Favorable conditions of the pre-construction’s deals attract buyers from all over the world. Approximately half of the county’s commercial properties selling for less than $1 million are purchased by local residents, not always U.S. citizens. The remaining 50% buying product under $1 million include foreign investors.”
But the city encountered a number of problems in its local property market following the nationwide downturn in housing. Problems with the growing property supply and lack of available loans to many potential borrowers, and lack of affordable private mortgage insurance are just a few of the setbacks. For homes in the city, the Case-Shiller Home Price Indices report that The Magic City remains with one of the highest drop in home values with a -29.0 percent fall YoY last October. Only Phoenix (-32.7 percent) and San Francisco (-31.0 percent) had higher drops. High-end areas have condominium values dropping by 20 percent.
According to Miami Today, the list of proposed federally funded projects includes the following: $20M technology upgrading, $28M municipal broadband network, $94M parking garage for a sports stadium, $20M for an aquatic center, $3M for renovation that will comply with Americans with Disabilities Act standards in some public parks, and $4M for other projects. It is expected to create a boost in local employment. Miami would certainly benefit from these projects but long term employment has to be sustained to avoid further collapse in the industry. Therefore, for cities that are wanting too much of the money, the projects have to be infrastructures that are beneficial in the long run and able to provide increased city revenues, not some white elephants that would stand useless.
If not for the company headquarters and resilient tourism industry, Miami could have lost more in the crisis. While it may present a good proposal to Obama, so would the other cities. It’s one problem that they have to contend with.