Lessons Not Learned

In the midst of one of the worst housing and mortgage crisis we have seen in this country since the great depression, a group with real estate ties are finding ways to use other people's money to help their own industry. In an article presented by the Osceola News Gazette they explain of an "effort to revive St. Cloud's struggling real estate market. A stimulus plan is in the works to attract more residents and bring jobs back to the area." To further add insult to injury, the plan that was presented by Council member Micky Hopper and the city's Economic Development Director was actually called "The St. Cloud Real Estate Economic Stimulus Plan." For those of you in the real estate industry, let us take a minute to explain to you what just about every other American knows or has learned from watching the county convulse under the extreme greed of those involved in the housing and mortgage markets, real estate and economic development are two separate things.

The Gazette's article points out that 37 percent of the city's businesses are real estate related, and that those businesses provide an estimated 21 percent of the jobs in the city. This means that almost a quarter of the jobs in St. Cloud were based on selling a finite amount of property unless the city was going to continue to grow by adding more property to the inventory. While we are glad that government did not step in to regulate the growth of a particular industry, even though they did continue to annex property to keep this industry going, we do not believe that it is appropriate for government or the taxpayers to bail out the real estate industry. The local real estate industry has failed because of bad planning and the greed of the industry itself and what we are witnessing is a free market correction that is reining the segment back in. The housing markets have failed because everyone involved focused on the easy money of developing and not on the infrastructure and creating the real jobs needed to support the housing market. Hence the term bubble, as in housing bubble, that we hear on a daily basis.

Our real problem with Ms. Hoppers "Real Estate Economic Stimulus Plan" is her group's short and narrow sighted view of the economy. "We need to get people back working," Hopper said. "Once people get back to work, we can get back to our regular lifestyle." The key phrase in this statement is "get back to our regular lifestyle." While the rest of the citizens of St. Cloud struggle, we should pump money into a specific market so those involved can keep the lifestyle the have grown accustom to? This is the kind of statement that only makes sense to government officials and presidents of local chambers of commerce.

The plan itself is basically an advertising plan that has the additional "Tour Bus" option to shuttle interested buyers around the community to show available property. The "Tour Bus" option is a critical component of the plan because of how long it takes to show people where they are going to have to find work if they plan to be able to pay their mortgage on a St. Cloud purchase. With most decent paying jobs close to 40 minutes away by design, interested buyers will need to factor fuel costs into their equation. What we do find most humorous is that Steven's Plantation which was once billed as a brilliant economic development effort by St. Cloud government, and the local media, has failed to the point that now you have to bus people to it in hopes they might be interested. Again, economic development based on a housing model leads to failure. This is a lesson that should have been learned by now and it is wrong to invest more tax money into a failing plan once again.

While we do believe that Ms. Hopper's plan is a bad one and a waste of taxpayers money, we do applaud her efforts. Council Member Hopper is the first to put some type of plan on the table to even be discussed. We also applaud the fact that for her plan to work, those involved in the real estate industry must get involved by either providing time or money to the plan. In essence, Ms. Hopper has worked very hard to eliminate the free ride aspect of the plan. The WayneWho staff is impressed by this. Our arguments against Ms. Hopper's plan is that it focuses efforts in the wrong area. The plan also creates a bubble within a bubble by selling homes in a market where there are no jobs for people to pay for those homes. The whole plan relies on the rest of Osceola County to be smart enough to create the job base for those who live in St. Cloud, and as we have seen over the past 10 years, they don't know how.

Ms. Hopper, expand your plan. Do not give up on your efforts, but realize that to save the real estate market means that you must put your efforts into areas other than the real estate market. The real estate market feeds off of the success of other markets such as manufacturing and distribution, but these markets do not directly feed off of real estate. We wish you luck.

We would like to finish this article article by asking a couple of simple questions of our award winning local newspaper, the Osceola News Gazette. Did you get that journalism award out of a box of cereal? What is it about doing interviews that you do not understand? Would it have been prudent to ask an average St. Cloud resident what they thought of the plan instead of getting nothing but positive spin out of people who directly rely on the real estate markets? The talk at "The Other Place" the day this article hit was not the happy chatter of a bunch of cheerleaders who just got new uniforms, the basic comments that morning went something like "How 'blanking' stupid are these people?" and "Get rid of them all and put some people up there that will not give away the farm." Maybe it was just the four tables around us and everyone else in the City is happy, but why not at least try to do a little research before you go to print?