Real Estate Developers Are Insane. Development Needs To Stop

Hoping to jump start the economy, Florida lawmakers have eased the rules on developers. Many won't have to pay for their projects' impact on roads. It will be easier to get approval to destroy wetlands. Next up: a study of whether developers should have to prove there's a need for new homes before revving up the bulldozers.

As lawmakers undo Florida's growth management regulations, it's useful to look back to a time when government didn't get in a developer's way.

Opportunity drew Gerald Gould from his native New York to Miami.Gould fast-talked his way into a job with an ad agency. Soon he was hanging out with a major client, millionaire Lee Ratner.Riding horses together on Ratner's ranch east of Fort Myers, the two weekend cowboys talked about ways Ratner could dodge taxes on his Florida retreat.Gould, with ambition but no money, pitched the idea of slicing up the scrub and swampland like a checkerboard and selling it to Northern retirees.Ratner, who had made millions with d-CON rodent killer, figured if he could sell rat poison, he could sell real estate.

On a flight to New York to line up financing, the men ripped open a barf bag and sketched out their advertising slogan:

"You can own a full 1/2 acre in fabulous Florida! Only $10 down and $10 a month."

The year was 1954. Lehigh Acres was born.

"We gave so much thought to selling the land that the normal reservations for commercial properties, schools, all the ancillary things you need in a community, weren't made," said Gould, now 85. "We even had canals that ran uphill. I don't know any mistake you could make that we didn't make."

When the real estate bubble burst nationwide, Lehigh was decimated. Property values dropped nearly 50 percent this year, on top of a 25 percent decline a year ago. About one in three homes are in some stage of foreclosure. Town boosters put the population at 70,000 permanent residents, but a recent University of Florida study estimated 55,000. That's less than 1 person per acre, in a space the size of Orlando.

With its population scattered so widely, public transit is stretched thin. Charlotte Rae Nicely, head of Lehigh Community Services, said a woman recently walked 18 miles to get free food from her charity. "I gave her a ride home," Nicely said.

The main drag offers an endless loop of failed businesses and vacant strip centers, the only relief coming from the landscaping in the Wal-Mart parking lot.Empty lot here, half-finished concrete shell of a house there, run down duplex for rent down the block. Unfinished condos have been torn down or boarded up by county crews.Code violation notices — 2,300 in one neighborhood last month — are plastered on garage doors. Realtors say properties are moving, but at bargain-basement prices. A real estate office advertises, "Foreclosures from $25,000."

More than a half-century on, residents are still paying for the developer's shortsightedness. Yards flood, septic tanks back up, well water turns dishes and laundry brown.Resident Cathy Petersen said she has learned to put her car in second gear and keep moving through water that rushes against her floorboards after rainstorms. "I always wonder, 'What the hell were those developers thinking?' " Petersen said.

After 60 years of making and losing millions, Gould says his goal was simple: Make money. "I'm an opportunist," he said with a shrug.

When he was on the make, the last thing Gould wanted was for government to get in his way. But time and advancing years have given him a new perspective.

"One thing I've learned is that the state government plays an important role in development and it can't walk away from that responsibility," said the man who never had to convince a government official of the need for Lehigh Acres. "They can't leave it up to local governments because local officials often don't understand development and have too narrow a perspective."

"It's heartbreaking," he said. "Lehigh is almost a model of the real estate disaster in the U.S."