What happens when you take a inefficient government program, add a dash of corruption, and round it out with a private market? You get governmental programs that are abject failures and the money ends up in the hands of the smarter guys.

Miami dedicated 1.3 million to subsidize affordable housing in a development in the city. All well in good if you are a big government type. But then you are looking at a time when the Miami housing market is white hot. So the people who got the grants, some legitamitely, some as political favors as the campaign manager for the mayor recieved, turned around and immediately resold the homes for a good deal more than they paid.

And that is the trouble with government just giving away your tax money. There are many smart folks out there who are looking and waiting for the money to be dispursed. And they will always find a way to twist and pevert the intention to make themselves more money.

The building, Loft One, developed by Jorge Perez’s Related Group, had offered 102 moderately priced units. But of those, city auditors found only six units that had stayed in the same hands for more than a year and claimed a homestead exemption — signaling that they were occupied by people who planned on living there for a significant amount of time.
On sales applications, some people listed purchase reasons like ”business/real estate opportunity, rental, resale and investment property,” according to the draft audit by the city’s auditor general, Victor Igwe. Some buyers listed mailing addresses in Argentina, Ecuador and New York.
Igwe declined to comment on the report, saying it was ”unfortunate” that an unfinished audit had been leaked to the media.
The draft audit says 33 of the 102 affordable units — priced between $99,000 and $216,000 — were resold within a year of closing. The list of those who benefited includes Miami political strategist Al Lorenzo, who works as a lobbyist for City Hall and was the campaign manager for Mayor Manny Diaz. via the MiamiHerald.com.

Related posts:

1. As Prices Drop, Investors Rush Into Downtown Miami Condo Market
2. High End Housing The Weak Spot in Housing Market
3. Top 10 Most Affordable Real Estate Markets in 2009
4. Making Home Affordable New Short Sale Worksheet
5. Watching the Making Home Affordable Program Fail