2012-06-26 "All the World in a Grain of Sand; How the Growth Machine Ate Florida" by ALAN FARAGO
ALAN FARAGO, conservation chair of Friends of the Everglades, lives in
south Florida. He can be reached at: firstname.lastname@example.org
John DeGrove was the father of land use planning in Florida and the principal architect of the state land use agency, the Florida Department of Community Affairs. The agency was established in 1985 to oversee compliance with the Growth Management Act. Most Floridians are unlikely to know either what the Department of Community Affairs did or what its disappearance means. Fewer still understand the challenges to design and implement a regulatory framework for rationale growth and development in one of the nation’s fastest growing states, or, how DCA and DeGrove’s mission was a target of anti-government, pro-property rights zealots from the first.
Why this matters is simple. Presupposing the failure of government regulatory authority virtually guarantees it will happen. The notion that government cannot do anything that private industry can do better, cheaper, and faster including protecting public safety, health and welfare has spread its toxic roots far and wide. Florida provides more than its share of examples of government-designed-to-fail.
These didn’t happen overnight. DCA was caught up in a thirty year war against governmental regulation of land use and the environment. Initially, the agency’s work enjoyed broad bipartisan support. By the time the agency was frog-marched to the platform and guillotined by the Florida legislature and an indifferent governor, it had already mostly surrendered to “regulatory capture” by special interests. When the final blow was delivered, no one was quite so surprised as the insiders to watch decades of history simply wash away.
DeGrove, who passed away recently at age 87, lived long enough to see his life’s work first praised as a national paradigm for growth management, then eroded by well-financed and determined special interests, pilloried by one session of the Republican-led legislature after another, and finally consigned to a closet in the state capitol with dust brooms. DCA is not alone. Despite irrefutable evidence of mounting pollution in Florida and its social costs, state government programs protecting the environment have been under the same withering attack.
The Palm Beach Post editorialized, “Legislators tried to rip the stuffing out the DCA in 2009 and 2010 but botched the bill, and a court overturned it. Gov. Scott’s cover story is that the agency kills jobs by asking developers to follow the law, meaning that public services be in place for the new residents. … this is a governor and Legislature that would rather break government than fix it.” (“Last straw for DCA? Gov. Scott goes after growth-management agency on false premise”, Palm Beach Post, Feb 8, 2011)
The St. Pete Times called Scott, “a new governor ignorant of the state’s history and indifferent about its future” and tersely concluded, “Now the state has given up virtually of its oversight of development and its authority to require developers to help pay for roads, schools and parks. Local governments can pretty much do as they please. Florida has turned back the clock three decades.” (“An obituary for Florida Growth Management”, St. Pete Times, June 5, 2011)
By 2011, the collapse of housing markets had knocked the state legislature off-kilter. The housing boom lay spent in the dirt. Keeping the boom alive had been the mother’s milk of Florida politics. For builders and the various components of the Growth Machine that fund political campaigns, markets had dried up and vanished. Overdevelopment plus foreclosures meant increasing supply was like pushing on a string: there was no demand. Lobbyists accustomed to tinkering with environmental regulations and regulations associated with the Growth Management Act, DCA’s enabling legislation, needed an organizing principle.
They had been accustomed to whipping legislators into a frenzy of bad decision making at the last minute– gloating over strategies to tie civic activists in knots or sending them down rabbit holes and one way legislative alleys—often shepherded bills in the dead of the night on the last day of the legislative session that no one read but those who crafted them – and now had to justify their existence.
The Florida Department of Community Affairs had an important mission but was one of Florida’s smallest executive agencies. The agency’s budget for 2011 was $780 million. For 2012, Governor Scott proposed cuts of about $100 million. For 2013, he proposed a budget of $70 million. By spring 2011 the agency was finished.
Florida is an enduring fascination. It is politically influential and culturally backward. It is a great backdrop for television for which no one can remember the plot. Florida exalts development and possesses unique natural resources. Its chief attractions that drove development in the 1950’s are in states of decay, aquifers, springs, estuaries, rivers, bays and the Everglades alternately treasured and spurned, vaunted and trashed, lit by God’s towering thunderheads and buried in a God forsaken culture of strip malls and anonymous platted subdivisions far from places of work.
The built landscape of Florida, like so much suburban sprawl around the nation, is seemingly designed to strip vitality from communities. It was John DeGrove’s life mission to deploy growth management policies in a way to encourage better outcomes. The economic disaster fomented by excessive risk taking in the private sector – banking, mortgage origination, construction and development based on speculation—should have lead decision-makers exactly toward DeGrove’s values: the rational allocation of resources to reinforce community planning, environmental and economic security. A bolder approach than ones conceived in the 1980’s would have attached regulation and enforcement of land use to the investment vehicles used by banking and insurance industries – those financial derivatives based on mortgages that profess to be agnostic to any value other than the free market.
During the boom, the Growth Machine offered critics it was only supplying “what the market wants”. The market hardly wanted the worst bust since the Great Depression, nor did the Growth Machine want attention turned to policies and candidates it supported whose blind fealty led to such disastrous results. The Growth Machine needed scapegoats to deflect attention from its diverse roles causing the crisis. It needed “bogeymen” and DCA conveniently fit the bill. It was a term actually applied to the agency by the ex-president of Associated Industries of Florida. DCA was his bogeyman.
In his second term inaugural speech, in January 2003 former Governor Jeb Bush rhapsodized about a future when state capitol buildings would be emptied of workers in recognition of government’s limitations. “There will be no greater tribute to our maturity as a society than if we can make these buildings around us empty of workers; as silent monuments to the time when government played a larger role than it deserved or could adequately fill.” It was a moment of exuberance and supreme confidence: 9/11 had threatened the economy and the housing industry, thanks to unprecedented policies by the Federal Reserve, responded. The boom was in full flight.
The workers Bush had in mind were state regulators like the ones at DCA who oversaw mandated development plans. The requirements of the Growth Management Act compelled cities and counties to formalize long-term development plans; a constant irritation to developers and bankers. Four years earlier, in 1998, Jeb Bush had been propelled to the governor’s mansion by a well-oiled political machine in Miami-Dade County. It was Florida’s largest county, the most influential politically, and Jeb’s home base.
The machine was grounded in local legislative and state legislature elections that revolved around hatred of Castro. The campaign funders were developers and members of the local Latin Builders Association who had grown extraordinarily wealthy building ring suburbs from the core of Miami to the edges of the Everglades.
But not even Jeb Bush in 2002 could have imagined that it would take an economic crash of historic proportions – one triggered largely by GOP supporters and excessive risk taking – to eliminate the Florida Department of Community Affairs. It was not as though DCA were a bastion or stronghold of bureaucrats and regulators insensitive to political pressure. Far from it. The very presence of Jeb Bush on the horizon – who had lost to a Democrat Lawton Chiles in 1994 – had already undermined land use planning.
It is all in the history. Understanding what happened in Florida is not a matter of reading tea leaves or looking for signs in the stars. The Florida GOP majority could not believe its good luck to have a Republican governor so oblivious to the reasons growth management mattered in Florida. Not even Bush –publicly longing for less government but fearing the public fallout of draconian cuts– could have imagined that the Florida Department of Community Affairs would be shrunk to fit the size of a bathtub without even the power to reach the handles for hot and cold water.
The upward track of the post-World War II economy in the United States closely follows the fastest growing states. Florida is exemplary and distinguished from other states in the Sunbelt that attracted massive migration. Its main industries are agriculture, tourism, mining of phosphates, lime rock used in construction and roadways, real estate speculation and development.
These industries are connected because they depend entirely on flood control to accommodate dry winters alternating with copious, tropical rain fall. Land use management is the flip side of flood control. The segregation of laws governing water resources and development is well established by Florida law. The point: agriculture and development should be allowed to get whatever quantities of water they wanted whenever it was needed. Wherever, involved questions of ownership, of public lands, property rights, the boundaries of cites and counties and how growth should be prioritized and managed. Wherever, is what drove John DeGrove to the forefront in the 1970’s with ideas and then the legislative support to implement what started out as a rigorous, bipartisan consensus of the Florida legislature to balance land use to protect Florida’s natural resources, quality of life and economic potential.
From that perspective – the bipartisan consensus through which DCA evolved—it was a kinder, gentler time. Five years after the collapse of Lehman Brothers (Jeb Bush’ first consultant contract after leaving the office of governor in 2006 was for Lehman, the largest supplier of financial bonds to the state pension funds), consumers are caught in a vicious cycle of reduced expectations and unprecedented political polarization, sifting through the cinders of lost equity and dashed hopes.
In Florida, managing water supply, land use, and environmental protection is popularly described as a balancing act. Land use planning does not inspire page-turners the way Wall Street and financial fraud wrapping up leviathans and government, does. But the slow dissolve of DCA under the cheerleading of growth-at-any-cost appears in the light, side-by-side with the financial implosion.
The economic crisis was due to two factors: miscalculation of financial risk – through debt instruments whose nominal purpose was to diversity, not magnify risk – and speed of execution, using leverage, computer models and boiler room operations to process paper transactions like home or commercial mortgages into tranches of debt so complicated that they defied understanding much less common sense.
For DCA, evaluating risk – especially large scale development– and deliberate analysis of costs and consequences of determining where construction and development should occur, or be inhibited, were central features of state authority lined up in opposition to the tendency of the “free” market toward miscalculating risk and speed of execution. Growth management in Florida served, in principle, as a brake or friction on where those billions in housing backed mortgage securities would materialize.
How did this come to pass? It is a societal phenomenon, not economic or strictly political. The leaders of the American century, DeGrove’s generation, had been shaped by the hardships of the Great Depression and World War; people pulling together solved problems. After World War II, and through a resurgent economy, Florida began to quickly grow. It was the sense of risk from unregulated growth that gave rise, in Florida, to legislation constraining exuberant developers from killing the goose that laid the golden egg. That was the principle.
Awareness of history guided this earlier generation of Florida’s leaders who had come of age in 1940’s and 1950’s. Although draining and filling Florida wetlands had been a purpose of Florida government for a century, Florida was still a small state plagued by mosquitos and swamps. What could be had scarcely emerged as a glint in Walt Disney’s eye. Many Florida legislators of that era enjoyed Florida’s bountiful springs, rivers, bays and pristine wetlands from the Florida Panhandle to St. Augustine and Florida Bay. The same was true for civic activists, who were on the front lines in the 1980’s but have now passed. They were children of the Great Depression and understood the value of shared sacrifice: Dagny Johnson, George Kunst, and Grace Maniello in the Florida Keys, Johnny and Mariana Jones, Art Marshall, and Wayne Nelson – who also died recently – for Lake Okeechobee.
People in DeGrove’s generation of leadership didn’t think of the environment as separate from daily life. It was something you enjoyed like everyone else. It was there, before you were born. Something you recognized as fragile. Something that needed to be protected because, after all, the thinking went: you can’t just bulldoze wetlands, dig up Florida for rock mines or sugar fields, or drain and contaminate springs forever.
In Florida, early efforts to plan land use and water resources in the 1970’s gave rise to new regulatory authority in the 1980’s, such as laws requiring that taxpayer funded infrastructure for schools, roadways, water and sewer should be in place concurrent with growth and measures to protect fragile waterways, wetlands and estuaries.
Nationally, Florida’s Growth Management Act was hailed as the most forward-thinking effort by state government to responsibly manage and account for growth, quality of life, and the environment. In the 1980′s other states watched to learn how to incorporate the Florida model into their own policies.
Even as the environmental movement was gaining traction in the public imagination in the 1970’s, Wall Street had walled itself off from any intrusion on the free flow of capital. In Florida, the laws were written to incorporate shades of gray, leaving interpretation open with conditional “should’s”, and massive industries including lobbyists and engineering consultants filled to interpret with the studious intensity of medieval monks disputing the number of angels who could fit on the head of a pin. Nationally, in the wake of the nation’s most important federal environmental laws, private industry was assessing how to create new message frames to accompany the erosion of laws now established to protect the nation’s air and water. It didn’t take long for private industry to push back or for the calculations of risk to the natural environment to shift.
In the late 1980s, I learned as a Florida Keys activist how John DeGrove’s hope for Florida designated, as a matter of state law, Monroe County as an Area of Critical State Concern. The requirements of state land use planning had wealthy and influential developers in the Keys, fuming. The Keys were the test tube for land use policies and thresholds like pegging growth to objective criteria, and they didn’t like it at all. (In the Keys, DCA linked housing units to hurricane evacuation time standards. The entry and exit from the island archipelago is only served by one state road.) As a result, the Great Destroyers keyed in on DeGrove and DCA, under secretaries who followed like Tom Pelham.
During the Reagan presidency, the Sagebrush Rebellion – a manifestation of the Wise Use Movement and progenitor of the Tea Party—took root in the Keys, secretly funded by sugar billionaires determined to keep federal policies from inhibiting their use of the Everglades for storm water drainage and damaging their profits. The movement came to life in the Western states, where land owners and investors in mineral extraction, ranching, and timber on public lands rebelled against what they viewed as federal impingement on their rights.
In the Keys, whether it was state authority – through growth management – or federal – through efforts to protect the coral reef and Florida Bay — big agriculture and Big Sugar objected. If the Florida Keys were a test to work out models that could be applied elsewhere, they feared the worst. They chipped away at the agency in one court battle after another, creating an entire industry of engineers, lawyers, and land use “experts” who resorted to political pressure and state administrative court to undermine its mission. Despite assurances from agency bureaucrats that “one size does not fit all”, the Great Destroyers were determined to blow up the whole enterprise. They had many willing accomplices.
By the time I arrived in Key West in 1988, the DCA designation of the Florida Keys as a special Area of Critical State Concern was being tested by the Great Destroyers. It took me some time to understand what I was experiencing. Those long night-time meetings in Key West and Marathon – public hearings on the county growth management plan or initiatives to protect the Keys fragile marine resources — seemed like honest labor and exactly the sort of civic activism that would give back to the community that nourished us and an example for younger generations. The pushback was well coordinated. Even then it was clear: if one prevails with the public from a point of view that government cannot work, is it any wonder it doesn’t?
Young attorneys on the public interest side were galvanized by the challenge of proving otherwise. Richard Grosso, then of 1000 Friends of Florida, and Ross Burnaman, of the Wilderness Society did the heavy legal lifting in state administrative courts. Curtis Kruer, a former US Army Corps of Engineers permitting official in the Keys, knew the waypoints. (Although DCA is gone, Grosso has the distinction of winning the sole case in Florida jurisprudence – known as Pinecrest — that caused a structure being torn down for violating the state’s Growth Management Act. It happened just once, and it may never happen again.)
The Growth Management Act was incorporated in the Florida statutes, known as Chapter 163. In its broad outline, it required local jurisdictions throughout the state to prepare and adopt “a comprehensive plan” and to implement the plan through development regulations. The disciplines required to fulfill the Growth Management Act spawned a generation of land use lawyers, engineers and consultants to government, to developers and speculators. A small number worked for public interest organizations who opened avenues of judicial appeal for citizens and activists like those battling the speculators in the Florida Keys in the early 1980’s. (Tellingly, such is the power of the Growth Machine to intimidate that public interest organizations had tremendous difficulty securing professional engineers or scientists in Florida to testify as expert witnesses in court on their behalf.)
This was also roughly the same period when Wall Street financier Lewis Ranieri decoded mortgage backed securities and created an market for new forms of debt. Ranieri was a top bond salesman for Salomon Brothers, then vice chairman. It is conjecture to believe there was ever a link – during the 1980’s – between the finance methods working out billion dollar markets for derivatives based on mortgages and opposition to land use regulations that might inhibit what became, twenty years later, incessant demand for more platted subdivisions to peg debt pinned to demographics, but in 1988 Ranieri acquired his own bank in Florida – Bank United – to test vertical integration of the mortgage backed supply chain: from cement makers who poured foundations and built roads, to sheet rock, plywood and plumbing suppliers to electric utilities, to real estate brokers, mortgage and title companies, from land aggregators, scrapers that took the Everglades down to cap rock, all the way to mortgage backed derivatives.
These innovations in debt became the soft foundation for cheap, affordable Florida and countless rosy projections. Under Florida’s Democratic leadership in the 1990’s, things went downhill fast. The late Governor Lawton Chiles took his cue from President Clinton and Dick Morris’ theory of political triangulation. Also, he needed little encouragement. Jeb Bush and the Latin Builders were nipping at his heels in 1994; an election he surprisingly won. Still, he set out to placate the Growth Machine. Under Chiles, in the early 1990′s growth management had a small window of opportunity to regulate the loss of Everglades wetlands to sprawl in Broward County. Instead of taking a hard stand to reinforce core, state Democrats rolled growth management and the rolling never stopped gaining momentum until DCA’s head rolled off the platform.
Civic activists howled in complaint, to no avail. The effort to be ‘Republican Lite’ was a disaster and set the stage starting for the Jeb Bush victory in 1998, ‘market-based environmentalism’, the crowding of conservative think tanks into Florida, the pressure of states rights and eventually, the collapse of federal resolve to protect the environment. One super mall near Wellington in Palm Beach County opened before footprints for giant subdivisions had even been poured. The mall was open, waiting for customers. It included a Thomas Kinkade gallery, its walls hung with oil paintings, discretely lit; the entire gallery muffled with hushed nostalgia for a past that never existed and certainly would never exist with the scenes of snowy pine tops looming over blessed, cozy stone houses or framed by weeping willows by the burbling brook. This mall’s over-weening confidence in smoke rings of future profit presently valued as homey hearths without a person in sight might have been taken for a sign: blind faith.
What is not conjecture – because it is written in the landscape – is that the state regulatory response for growth management was cordoned from Wall Street. No one in the political class – not in Florida or anywhere else – was interested to probe the risks segregating mortgage backed securities from land use, or, how land use could be reinforced from extra weight through financial regulations. One can minimize risk by pointing investors in other directions, into safer investments, the same way government regulations turn consumers away from poison or should.
9/11 provided the extraordinary opportunity for GOP funders to tighten down the laser focus on the frictionless growth of the housing sector. Their purpose was to foster the dream of home ownership. They named the initiative, the Ownership Society, in 2002. The public didn’t ask where those mortgages went; the money was in the pools of mortgages, blessed by ratings agencies, and implicitly backed by taxpayers through Fannie Mae and Freddie Mac. The whole program depended on individual mortgages gathered into pools and derivatives shaped from computer algorithms stacked neatly as a hundred pennies in a paper sleeve.
The “cookie-cutter” forms of construction and development – from strip malls, to big box centers and platted subdivisions—were sold as “what the market wants”. The economic crisis did not start with financial derivatives; it started where John DeGrove’s mission began. It started in Florida where developers of platted subdivisions off-loaded risks to banks who off-loaded risk to larger financial institutions who off-loaded risk to remote investors. It all depended on speed of execution, corralling and inhibiting government regulators and enforcement, and in this light, financial institutions held as paragons of virtue – like Countrywide Financial and BankUnited—were just dressed-up versions of a game of three-card monte in Times Square.
As markets for housing-based financial derivatives developed into a massive wealth transfer operation, the sophistication of the Growth Machine in Florida also increased; matching the small cogs at the local permitting levels to larger and larger gears, operated finally by Fannie Mae, Freddie Mac, Goldman Sachs et al. and the pressure to knock down barriers at the regulatory base also grew by leaps and bounds. (One of the most enduring images, during the housing boom years, was a trendy gossip telling me that in the early 2000’s former Federal Reserve Chair Alan Greenspan regularly spent Miami Beach weekends with his wife, in the words of my source “trying to find the coolest parties to invite themselves, to.”)
Gliding by those threats and ensuring government-designed-to-fail was powered by campaign contributions from a supply chain of politically influential individuals who gained the maximum advantage and profit from converting wetlands and cheap farmland close to population centers into low density, scattered suburban sprawl. It was a vast wealth generator wringing advantage from massive leverage and financial innovations that skirted, like invisible toxic pollution, under regulatory radars that never exchanged data with land use regulators. The whole enterprise depended on externalizing costs and hobbling the enforcement role of regulatory agencies by capturing its principals. Once the whole fell apart, there was nothing left to do but eat its own.
Despite the massive contraction of banking and finance related to real estate development and home mortgages, despite the overwhelming accumulation of science that the regulations in place are inadequate to protect either human health, drinking water, or natural resources, political advantage remains rooted in the business of converting wetlands and farmland to suburban sprawl and condominiums along the fragile coast, rock mining and sugar farming in Florida’s Everglades.
The dichotomy—even schizophrenia—of government policies encouraging growth while at the same time seeking to constrain its most impulsive and perverse forms – like platted subdivisions in wetlands – is like a line separating the the late period economy of Florida from earlier assumptions and faith that the underlying financial arrangements of suburban sprawl could be independently managed for risk without ever touching risk-based assessments of environmental carrying capacity.
What materialized is different from what I imagined would occur, after a real estate crash. In the 1990’s – never mind the early aught’s– whoever could peer intensely into the march of Insta-Gro suburbs and infrastructure at the edge of the Everglades, the Florida Turnpike or the Florida Keys knew something had to give.
Despite the trillions of taxpayer dollars spent to underwrite the risk takers who very nearly blew up the world economy, private industry is still determined to maintain exactly the gears and leverage of the Growth Machine calibrated to deliver the maximum volume of mortgage instruments to Wall Street. Those political interests in control of ultra-conservative legislatures and Congress are dead-set on eliminating rules and regulations protecting the environment as though breaking the back of state regulatory authority were enough rubbing to conjure fire from wood.
These thirty years have not been kind to the mission for which DeGrove dedicated his career.
Citizens and environmental groups hoping to challenge local decisions – fostering suburban sprawl in environmentally sensitive wetlands, for example — were more frequently thwarted by DCA than not. To contest changes to local growth plans, they needed to raise funds for attorneys, experts, scientists and often endure years of court appearances and appeals. DCA turned into exactly the revolving door between the regulators and regulated that causes low morale among staff and public disgust with government.
On the other hand, for citizens trying to gain control over communities and development schemes, through which development plans appeared bought and sold long before the first gavel struck in local commission chambers, DCA was the single point for citizens to attach to the otherwise high, smooth walls of state government, protecting legislators beholden to land developers from the public.
While defenders of wildlife, lakes, streams, waters and bays—of small town retail against big box retailers—cobbled together funding for administrative court challenges allowed through the Growth Management Act, speculators and developers used marketing budgets to hire their own sets of environmental experts to compete, claiming with feigned dignity or shrill outrage that regulators were on the same side as the cabal of their opposition: no-growth’ers, naysayers, tree huggers and worse. No one is more leery of an environmentalist than a career regulator. But for the Growth Machine, it is ‘off with all their heads’.
This prevailing mindlessness also explains why the broad consensus that John DeGrove represented, vanished. From the opening bell in 1985, the agency that John DeGrove led was targeted by large land owners, farmers, speculators and the conservative foundations they funded as an example of over-reaching state authority.
After the market top of 2005, as the economic catastrophe gathered steam, the agency John DeGrove helped bring to its imperfect life was used as a “bogeyman” by Associated Industries, developers and powerful agricultural interests. The speculators and developers blamed the agency DeGrove founded for slowing growth, killing jobs, as though eliminating DCA would miraculously restore the demand for subdivisions and the massive oversupply of housing and commercial real estate that scarred wetlands, made mockery of environmental rules and regulations, and wrapped up hundreds of thousands of home owners in the weight of underwater mortgages. Over-arching principles and regulations that made common sense were divided into ever smaller fractions until the whole was lost in ways that no one understood.
Florida, under the influence of the Great Destroyers, is like a skier frozen in place ten feet in front of a snow making machine nozzle thinking he is lost in a blizzard.
When the Florida Department of Community Affairs was dissolved by Governor Rick Scott in 2011, Floridians were otherwise absorbed, too caught up in the economic crisis unleashed, in large part, by the rampant overdevelopment that the Florida Department of Community Affairs might have thwarted but was thwarted itself by influence exerted on behalf of the Growth Machine and its powerful campaign contributors.
Today, Florida’s voters are misled by arguments that growth management is a “jobs killer”. What would they know?
All the structures to keep the public good in view were rickety and jerry-rigged and held together by the slimmest of legal thresholds requiring citizen activists to test again and again in lengthy, exhausting and costly administrative court challenges. Now they have been torn down. So goes the Miami-Dade Urban Development Boundary and the careful testing by developers of the local county commission, searching for new limits now that DCA is gone, the same way tiger sharks use the murk to probe its prey’s vulnerability. The extension of a major expressway, SR 826, into farmland owned by politically influential local power brokers, the exchange of lands and speculation in the Bird Drive Basin and South Miami Dade: all waiting for the miracle to come.
The erosion of federal and state authority to protect quality of life and environment, reflected in the destruction of DCA, now pushes permitting and zoning decisions straight onto the backs of local officials who are themselves coping with massive budget deficits and use the crisis to cut land use planners, as among the first examples of excess government waste.
In a recent New York Times editorial (“Sam Spade at Starbucks”, April 12, 2012) David Brooks took young social entrepreneurs to task for not applying themselves to the “noir” business of political change. Thirty years experience on the noir front lines of environmental and growth management battles lead to a different conclusion.
They may not understand the particulars, but see that the current quagmire makes it very unlikely that there is a wagon to hitch one’s train to. It is no wonder that young, entrepreneurial Americans are seeking change through individual participation in small-scale change. With public confidence in government and institutions so low, and the chances of success so transparently poor, what else is there for a young person to do who wants to make change happen?
In Florida, the imperative to profit from cement, sheetrock, and platted subdivisions is ferocious. Even in the absence of demand, the engine fires like an automaton. It is made to work that way.
Understanding the economic crisis that shed 8.5 million jobs and caused the loss of $11 trillion in consumer net worth is like assembling a Rubik’s cube. It is not one view or one facet of financial fraud, because there was no industrial policy at any level of government attempting to integrate the contributors; from environmental protection to housing and transportation, except in Florida through the Department of Community Affairs. What DeGrove tried to codify, the principles of concurrency, did exactly that. Surely, when the economy based on housing and construction imploded, attention would turn DCA’s way. And it did, but not in the way I expected.
The point of the Growth Machine was to create transactions—millions of them—that were frictionless and risk free to the originators. The amalgamation needed to cast no shadows and leave as few traces as possible. The biggest gears connected to propulsion through smaller and smaller gears, marking each level of economic interest – from cement supplier to sheetrock to mortgage broker—and political layer – from lowly county commissioner in Miami-Dade, for example, to cabinet secretaries in transportation and housing, to Congress and the White House. The Florida Department of Community Affairs, a state agency dedicated to overarching principles of sound growth, was rarely a brake. The political process exerted too much leverage, but when the economy turned sour, someone had to be blamed. DCA held out the potential of friction in zoning processes where the goal of developers and speculators was to create transactions as frictionless as possible. DCA was “the bogeyman”.
It is no coincidence how the arc of DCA parallels political polarization, the disappearance of bipartisan consensus on managing growth to balance the economy and environment, and a modern depression whose depth is papered over with ‘good news’ stories to prop up the spending habits of consumers.
The landscape civic activists in Florida have been trying to protect is imperceptibly sloped. In the imagination of environmentalists, the landscape provides a clear and imperceptibly slow flow of fresh water from Lake Okeechobee to Florida Bay, nearly as wide as the peninsula of Florida itself. In the imagination of land use planners, the low density, scattered sprawl that is the bread and butter of local politics is kept away from the main course; threatened natural resources and drinking water supplies. In both the imagination of environmentalists and land use planners, zoning changes in farmland are side courses. The big downtown law firms, with prestigious names like Greenberg Traurig in Miami, are waiters. The menu to convert wetlands and raw farmland into sprawl fits the parameters of the Department of Community Affairs and a rational process to build a sustainable economic platform that would, at the same time, protect the environment. That is in the imagination.
In reality, 20 year old MBA’s or PhD’s in mathematics invent impossibly complex algorithms for deep, dark pools of financial derivatives tied to mortgages, luring investors lulled to sleep by the assurance of bond rating agencies tied to the hip to Wall Street executives paid billions but still not enough: what they need are more subdivisions, more mortgages, more mortgagees. What they need is more wetlands to be converted to lime rock pits, lakes for subdivisions and condos on the coast. It all has to be without friction or delay. Costs of protecting the environment – the Everglades – have to be externalities that are never priced into the model. The free market has to be all light and no shadow. If there are courts inclined to a broader interpretation of laws from a kinder, gentler time; the judges have to be replaced. And they were. And they are.
The financial system is designed to compartmentalize debt from the built landscape. While the masters of debt seclude themselves in gated estates and communities that imitate the amenities and prerequisites of small town America, their business models and political influence deprive Americans of the same advantages. (Interestingly, in one of these small town places in Putnam County, New York, Fox News president Roger Ailes and his wife are testing these issues of zoning control through a small newspaper they own.)
Everglades activists can explain how risk analyses that projected regulatory thresholds to protect ecosystems were all wrong in the past half century. But they have no where to go once they do the explaining, compared to financial engineers who wrote derivatives that turned to crap and now are in business making silk purses from sows’ ears. It doesn’t change the fact that they were wrong the first time, and very well could be wrong, the second and third.
The difficulty in understanding the scope and scale of the economic malaise is that the entire infrastructure of development is implicated. In a time of diminished capacity of the mainstream media to investigate and to report, what happened inside agencies fated to influence Florida’s quality of life and environment was relegated to hotel conference rooms, blue ribbon panels, planning events, the rubbing of shoulders and interests, the revolving door between regulated and regulators. With so many masters, it is no wonder so few noticed when DCA disappeared.
This analysis of what John DeGrove helped establish and has now passed sends a message that few in positions of responsibility and political authority want to hear much less acknowledge: that careful integration of regulation of land use and financial derivatives at the most important nexus of the housing equation, where and how land is allocated and zoned for development and how to bind financing to those places in particular, could have saved the economy. The tools are there. The will is not.
Instead, having plunged the economy into the worst crisis since the Great Depression, the Growth Machine that succeeded in “regulatory capture” has now defined risk as any regulations at all; the worst being those that inhibit growth and jobs. The more science-based arguments to the contrary, the more suspect. What the Growth Machine requires of consumers is blind faith in the miracle to come.
Congress has never considered how regulation of mortgage backed securities could be used to strengthen growth management and reinvigorate the US economy. In hindsight, it is shocking that decision makers embraced financial derivatives based on mortgages without making any connection to impoverished built landscape created through the so-called diversification of financial risk. It was the business of the Growth Machine at the state and local levels to tame growth management to its purposes. And tame, they did.
Floridians are as shell-shocked by the collapse of housing values as roseate spoonbills seeking refuge in Tampa far from their natural habitat in the dying Everglades. Today’s generation of Florida’s leaders did not grow up with experience of Florida’s Everglades. Once the baselines are lost, any outcome is like multiplying a number by zero. Still, the questions demand answers.
Had Governor Rick Scott ever heard of John DeGrove before he invested more than $75 million of his own money, paving the road to the Governor’s Mansion? Does he even know where growth management is, now? DeGrove could tell you if he were still alive: it’s gone.
Recently, Scott announced an initiative to solicit community input on what Florida’s future should look like. Prior iterations by Florida governors of blue ribbon panels were used chiefly to undermine DCA. This time it is different. The state is a tabula rasa. But to what purpose?
There is a strong argument to be made that Florida – and the nation – is in an epochal transition. On the one hand, large investments continue to be made – like the announcement of real estate giant Swire Properties to invest $1 billion into a new city center project in downtown Miami. On the other hand, the force of economic uncertainty compounded by climate change promises mean politics of scarcity will seep into depreciation schedules until insurance companies stop writing policies. Florida, with its low lying coastlines, has the most to lose in the nation. In a scenario where powerful financial interests are increasingly hedging their bets – with taxpayer dollars as the case may be – it is no wonder that maximum advantage is served by limiting the role of government. On a sinking ship, it is every man for himself, damn the women and children.
John DeGrove and a small cadre of land use policy experts sought a better and more civil way. They maintained professional excellence and high standards despite political malfeasance and fraud above their pay grades. It took wise men a seeming eternity to create the Florida Department of Community Affairs. It took a man-made calamity to destroy what they created.