(SFGN, 4/1/17)

For this column and the next, we are going to take a slight – but related – diversion from our annual exposition on community. This week I want to talk about two matters that popped up in the news and on my Facebook feed in the last couple days. In the next issue, I’m going to give some First Quarter 2017 pricing and sales data, fresh off the presses (or out of my analytical software anyway) for those who might have an interest in the current market situation.

But today, let’s talk a little bit about trust.

First, about who we trust with our money. Perhaps we don’t like to think about it too much, but we do trust politicians at various levels with our tax dollars, and that they will spend them on the purposes for which they were intended by means of enacted legislation. In the early 1990s the Florida state legislature determined that a worthy objective was increasing the stock of “affordable housing” here, and passed a bill (later signed) that earmarked a portion of the transfer tax on real estate deeds (one of those pesky “closing costs” that Realtors and mortgage brokers have to explain to people) to affordable housing projects.

All well and good, except that over the years this honeypot of money has proven irresistible to the legislature and various governors. Since the start of the housing bust in 2007, more than $1.3 billion (yes with a “b”) of this “affordable housing trust” money has been swept up by our friends in Tallahassee and spent on other projects.

Now, as you know from prior columns in this series, the affordability of housing stock here in WilMa and East Broward generally is a huge issue. Wouldn’t it be nice if we could trust elected officials to do what they promised? The Realtors, both locally and at the state level, have been lobbying the legislature on this for years.

If you happen to see East Broward state legislators Gary Farmer and George Moraitis skulking about town, you might want to ask their opinions on this, as the legislature is in session and the budget is being discussed now. (Use the words “Sadowski Trust” for bonus points.)

The second issue is a little more sensitive. What happens when there is a reciprocal currency of trust and good faith, that ends up getting broken?

Admittedly this may end up getting a little philosophical, but it’s important and maybe related to the first issue. It’s something that happens all the time in the real estate and mortgage brokerage business. A mortgage broker friend worked on a complex transaction with a difficult client (no they are not all just done by a “rocket”) to have the customer, at the eleventh hour, move to another service provider.

What happens in a world where the foundations of trust have been compromised? You work, you develop relationships in what you assume is an environment of mutuality, only to discover that in reality there is no mutuality. Maybe it begins (or at least is fueled by) decisions by politicians at various levels when they break their word to us by sweeping up “affordable housing trust” money to spend on other pet projects. If no one complains and they get re-elected, there are no consequences. So there is no penalty.

Perhaps some Realtors and mortgage brokers shot themselves in the foot, by not clearly demonstrating their value added. Or did a handful of “bad apple” Realtors and mortgage brokers do the damage to the whole industry? Did it happen slowly, subtly? And now, when really skilled counsel might be needed more than ever in special situations, can it be rebuilt before the next crisis occurs?

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