Back Main Street, Not Wall Street in Housing Crisis

Posted by Gihan Perera, Miami Workers Center Blog at 9:13 AM on July 11, 2008.

We could look at the numbers, or cite statistics, but you just have to drive down any average street in the U.S. to see the fallout from the housing bubble and the market crash. Here in Miami, condo towers are empty monuments to the great failure of the housing bubble. What happens with those buildings will be a real testament to the future of this country.

In the early days of the boom, in Miami and in many cities across the U.S., our government facilitated the real estate explosion. Our city, state, and federal governments worked together to drop taxes, allow easy credit, and create infrastructure for mega-real estate deals. They worked closely with developers to funnel public dollars into private pockets. Public officials relieved boom profiteers of any and all responsibility to the public. Speculators raked it in hand over fist while the poor, the canaries in the coal mine of the coming crisis, were quickly displaced by gentrifying neighborhoods. Middle and working class people were swept into the speculative craze, and accepted the illusion of easy cash through easy credit. Meanwhile, the people on top cashed in and got out as quick as possible. They knew what was coming.

A housing crisis for poor and working class people isn’t anything new. It has been a reality for the urban poor since the beginning of the bubble. As home prices inflated and money flowed into luxury lifestyle estates in South Florida, those at the bottom struggled to find homes. Public housing was demolished, Section 8 failed (over 40,000 are on the waiting list in Miami Dade alone), and rents rose as landlords tried to cash in on a bull market.

Now the middle class has been kicked to the curb and people are literally walking away from homes because they can’t pay mortgages, we are seeing the benevolent side of today’s government policy: bail out the speculators. While middle and working class Americans lose their homes and the only equity that may get them through an uncertain future, the companies that profiteered are let off the hook.

The game is rigged: while Bear Stearns got a $29 billion government bailout, over $60,000 of wealth equity per homeowner was lost in the crash. The promise of a quick buck and money tomorrow evaporated. In Florida, the state, and therefore counties, cities, and municipalities are resorting to massive budget cuts on crucial social programs. The rules aren’t written to actually protect the general public and the most vulnerable among us: poor, working class, middle class. The rules are written to protect the investment banks, the developers, and even the politicians who made personal gain at the cost of public good.

We must demand the next president to take federal level action aimed at supporting Main Street, not Wall Street. Policy shifts are an immediate outcome. The empty and foreclosed condos, homes, and apartments should be opened up for victims of the mortgage and housing crisis to live in. There must be amnesty for those who were hoodwinked by the sub-prime charade and lost their homes. Long term solutions must address the root causes of the mortgage crisis. Moving beyond policy requires a fundamental shift in our vision, in our beliefs of how our country should be run, for whom and buy whom.

This will be the test of Obama’s campaign. It has tapped into a deep vein of discontentment in our country around a belief in a very different vision. However, whether the energy of Obama's campaign actually turns away from a fundamentally corporate driven world and towards addressing the fundamental needs of a community is yet to be seen. The history of how this unfolds is as much in our hands as the next presidents. We must build a social movement based on human rights that is more powerful than a rightward run for votes and that can truly make the election rhetoric reality.

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This article is part of "Housing Crisis Investigation Week," a project of The Media Consortium [www.themediaconsortium.org] which will culminate with Live From Main Street Miami- a televised town hall exploring how the city of Miami is facing the economic crisis and working toward a sustainable future. For more information about Live From Main Street and Housing Crisis Investigation week, go to www.livefrommainstreet.org. AlterNet is a member of The Media Consortium.

Tagged as: housing