Thursday, September 15, 2005

Speculators Flood New Orleans

There is no shame in land speculation. We've talk on and on about how unscrupulous speculators loyal only to the almighty dollar have driven up the cost of housing nationwide, putting it far out of the reach of working families. So, of course, it doesn't surprise us that the sharks are now looking to take a bite out of New Orleans. A story today by David Streitfeld in the Los Angeles Times looks at how speculators looking to make a buck off the devastation could end up forcing out the poor. Here's an excerpt:
BATON ROUGE, La. — Brandy Farris is house hunting in New Orleans.

The real estate agent has $10 million in the bank, wired by an investor who has instructed her to scoop up houses — any houses. "Flooding no problem," Farris' newspaper ads advise.

Her backer is a Miami businessman who specializes in buying storm-ravaged property at a deep discount, something that has paid dividends in hurricane-prone Florida. But he may have a harder time finding bargains this time around.

In some ways, Hurricane Katrina seems to have taken a vibrant real estate market and made it hotter. Large sections of the city are underwater, but that's only increasing the demand for dry houses. And in flooded areas, speculators are trying to buy properties on the cheap, hoping that the redevelopment of New Orleans will start a boom.

This land rush has long-term implications in a city where many of the poorest residents were flooded out. It raises the question of what sort of housing — if any — will be available to those without a six-figure salary. If New Orleans ends up a high-priced enclave, without a mix of cultures, races and incomes, something vital may be lost.

"There's a public interest question here," said Ann Oliveri, a senior vice president with the Urban Land Institute, a Washington think tank. "You don't have to abdicate the city to whoever shows up."

For now, though, it's a seller's market, at least for habitable homes.
See the entire Los Angeles Times story at this link.

— The Boy in the Big Housing Bubble