Land Price Boom Changes Economics In Florida
As with any financial distortion, the side effects are not just what happens, but what doesn't happen. In the case of Florida, former affordable housing firms are quitting. "For-profit affordable housing builders can make more money flipping land."
"Continental's Castiglia said he worked with one community development corporation, generally called a CDC, which bought land in Miami's Allapattah neighborhood for $250,000, but spent three years trying to pull together the financing. The project fell apart and the land sold for $1.9 million."
"'Why take the risk and make 20 percent when you can make 100 percent or more?' Castiglia said."
"Some say the overbuilding of condos will create new rental inventory, but that won't benefit low-income households, Gonzalez said. 'It's absolutely not true that this will be future housing stock.'"