What happened in Florida shouldn’t be happening, period. A building must not collapse. Someone who was not born here told me that this happens in third world countries where corruption is rampant. Make sure to check out the YouTube video showing important buildings in China being erected in a few days. Would you like to live there?
I shudder when I think of the people who live in Florida in the still standing condos. Building authorities and insurance companies look under the hood. Repairs will undoubtedly be required and the cost will be high. What if you can afford to buy the condo, pay the monthly fees, but if there is a valuation, does it throw your money management to the wind?
As history progressed, the cost of fixing the structural problems associated with the building was delayed due to the enormous cost. The question is always who is to blame and who should pay for it? Should the developer? Why me? What happens to people who are now homeless, have to keep paying their mortgage and have lived their best lives and now live in a hotel on the edge?
There will be enormous debt to repair the buildings that are still standing. It needs to be monitored or it will become a serious problem in ten years when the gig is over. We saw this in our history through the mortgage crisis. But that’s what we do. We use. It’s very American. We are living beyond our means and the banks are taking full advantage of that.
Many years ago we were in Madrid and met with an old school friend. Her father was a diplomat, so they spread themselves and all of their siblings around the world. Her husband, a Spanish banker, was shocked that she was in debt with credit cards. In Spain, at least at that time, there were no credit cards. Credit card debt was not acceptable. They lived very differently from the Americans.
Millennials aren’t in debt, and Gen Z definitely isn’t. We could all learn a lesson from this. The desire of the next generation to live within their means will change the way we live. Developers use themselves at banks. They usually only put aside 10% to buy a building or land and take on the other 90% of debt to build the property in the hopes that they will then sell it, repay the bank, and cash in on the transaction can earn. When the economy is slowing and you have very little skin in the game, walking away isn’t that bad.
Lots of lessons to be learned in Florida. I hope we don’t repeat lessons we should have learned from our past on how to make heavy use of our bank accounts to lead lives on the fringes. I never knew how to live big with debt. For years we had nothing and lived from hand to mouth; the thought of a huge credit card bill would have scared us too much.