‘Capital Insights’ with Jack Kern: Florida Sunshine Dimmed by Ballot Initiative Against Development

Sometimes news events remind me of the ancient plagues. Just when you thought things couldn’t get any worse, frogs rain down from the heavens or a comedian gets elected from Minnesota. In a way, that kind of makes sense because after electing a professional wrestler governor, a comedian was the next step. I do wonder if they ever called Jess Ventura the First Wrestler, instead of governor. (Expect to see a clown from Minnesota in the House of Representatives in 2012. There are quite a few there already.)
 
Florida is one of those states in transition, with elderly residents vying for city services against a tsunami of immigration. Somewhere in the mix, something dumb is happening.

Recently, as if unemployment, immigration problems and a hurricane prone coast weren’t entertaining enough, the Florida Hometown Democracy Act was certified for the November 2010 election. This initiative, if passed by the voters would require local referendums on all comprehensive plan amendments that have been approved by their respective local governments. This means a property developer would have to obtain not just local and sometimes state government approval, but also the local citizens approval. The expense alone of mounting a public relations campaign to convince the electorate to support your project will cast a daunting pall against a lot of new projects.

Since this act has a very good chance of passing, it might just mean the inadvertent decline in unchecked Florida development and reward the citizens of Florida with less competition, higher rents and vastly more constrained surburban markets. This sort of citizen activism has done little across the country to foster the kinds of development and improvements that build strong communities. This may well mean that Florida will now see vastly less employment and ultimately watch its housing stock age in place, something that won’t benefit anyone.

There needs to be a pretty dramatic response by the development community in advance of the November 2010 vote or we can cross Florida off the list as a state worthy of development capital. Let me know if you’d like to get involved. For me, I’m going to the Bahamas next time I want sun and surf, or maybe Las Vegas and Caeser’s Palace, which is a lot like Miami Beach, except for the plethora of wrinkles.

(Jack Kern is the managing director of Kern Investment Research, LLC, a
market research firm. He can be reached at
301.601.1900 or [email protected].)