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In January of 1965 the Kiplinger Florida Letter reported:

Two major elements (are at) work against any rapid increase in land values soon: (1) State must first absorb excess residential building of past years; (2) Statewide trend to higher assessments puts more land on the market, pushing prices down. These factors will keep the lid on for several years.

The average northerner may not realize it, but Florida has a vast abundance of raw land. Much of it is marginal, or substandard.

, Only about 3 percent of the State's 58,560 square miles is urbanized. True enough, the State is booming. A salubrious climate, the space age, and business and industrial expansion have combined to give Florida the fastest growth rate of any State its size in the country.

The Florida Development Commission estimates that 2,500 people migrate to Florida every week.

None of this, however, has had any startling effect on the great majority of rural land. Most of the newcomers are settling in existing communities.

Now Florida, of course, has thousands of square miles of good, high-quality land and this is the kind of land on which the reputable planned communities are built. But near the southern tip of the State between the two coasts are miles of acres of submarginal wastes known generally as the Everglades region, Corkscrew Swamp, and Big Cyprus Swamp; together with prairies, sloughs, and water conservation areas.

A realtor from Stuart, M. P. Nelson, who is publisher of Florida Real Estate Trends and Exchange Mart, said this of the region in the August 1965 edition of that publication, and I quote:

Most of this wasteland is only 1 to 5 feet above sea level or is below sea level and subject to periodic flooding. Over 90 percent of this land is not considered usable for real estate development.

Yet this is a major theater of operations for mail-order acreage dealers. There is no telling how many acre-and-a-quarter lots here have been sold to northerners at fantastic prices, but the number may run into the hundreds of thousands, or more. Significantly, the State is now building a two-lane, high-speed toll pike through the heart of the region to join Fort Lauderdale and Naples. The highway, nicknamed "Alligator Alley," has been roundly assailed in the press as a boondoggle that is both dangerous and unneeded. The installment land lobby is believed to have had a lot to do with bringing it about. We know from the brochures and the boilerroom pitches that the acreage merchants are getting a lot of mileage out of that highway, although it isn't finished.

If there is anywhere that land prices could be expected to jump, it is in and around the metropolitan areas. In some cases, they have indeed shot up. In others, the increase has not been spectacular.

For example, studies by the Roy Wenzlick Research Corp., of St. Louis, a real estate research firm, show that values of raw land in Duval County, where Jacksonville, the State's second largest city, is located, have increased only about four and a half times in the last 40 years. Using the index number 100 for the base year 1920, the firm found that values climbed from 100 in 1920 to 435 in 1960.

For Escambia County, where Pensacola is located, the increase was from 100 to 400 during the 40-year period. Seminole County (Sanford) went from 100 to 209.

Impressive gains were shown for Dade County (Miami), where the rise was from 100 to 1,320; and Orange County (Orlando), which registered an increase of 100 to 1,266. But keep in mind that these are two of the fastest growing areas in the State, that the land is directly in the path of growth, and that it is suitable for development into homesites or commercial areas.

By contrast, much of the acreage sold by mail is in such condition that it could not be developed, even if there were any demand for development, without heavy expenditures for surveys, drainage, clearing, filling, and roadbuilding. Moreover, the very manner in which it is sold in small parcels to people living over half the world substantially reduces the possibility of this ever being done. This kind of dividing has been assailed by numerous land experts, including one who branded it as inherently fraudulent.

In a statement submitted to the Subcommittee on Frauds and Misrepresentations Affecting the Elderly in 1964, Herbert E. Wenig, assistant attorney general for the State of California declared:

I wish to emphasize at this point, even if there is full disclosure, the sale of undeveloped lots in a premature and remote subdivision for use as homesites or for investment is inherently fraudulent. Once the promoter sells the lots, the scattered ownership and diverse wishes of lot owners make concerted self-help most difficult. All the risks of creating a livable homesite by the development of an adequate water supply and the installations of streets, sewers and other utilities rest upon the individual buyers. The problem is accentuated by the remoteness of the subdivision.

Reassembling land that has been sold this way can be difficult if not impossible. This was vividly demonstrated when 27,000 acres were purchased for the projected Walt Disney attraction in central Florida. The job took nearly 2 years because it was necessary to deal with thousands of people who had bought small lots by mail. “This had to be done by long-distance telephone and it had to be done in a way that wouldn't cause too much talk and start a rising spiral in land prices that would make Mr. Disney give up the whole idea,” related Nelson Boice, Jr., president of Florida Ranch Estates, Inc., which undertook the task.

There evidently was no "profit potential” for the owners, either. Mr. Boice added :

To be blunt about it, some of the owners had been swindled. Their lots were miles from passable roads and inhabited only by rattlesnakes and alligators.

Disney paid an average of $186 an acre for the property. And you can buy all kinds of swampland in Florida for less than $100 an acre.

Along with totally unimproved acreage, another commodity that's being hawked far and wide is the partly improved acreage. The developers promise to put in dirt roads and drainage canals, finishing the job by the time you've made your last payment. “Buy it by the acre and sell it by the lot,” goes the spiel. Salesmen make a big thing of the fact that it's physically possible to subdivide two and a half acres into eight building lots, or an acre and a quarter into four lots. Population pressure will create a teriffic demand for homesites in the years ahead, they tell you, and prices will skyrocket. What the silver-tongued pitchmen usually don't mention is that such subdividing can be costly—you have to pay for street paving, curbs and gutters, additional drainage, a water supply, perhaps even a sewer system. In some cases, local regulations may restrict or prevent such subdividing

Mr. Bertoch has stated that a major complaint from the public has been of failure of developers to make good on the promised improvements.

As for the future demand for lots, many authorities are extremely skeptical of claims made by the land companies. The land inventory of the 233 promoters is so gigantic that it may be several generations before even a substantial part of it is inhabited.

For example, just one of the dozens of companies operating in southwest Florida's Collier County owns about 285 square miles of land there and, I understand, is negotiating for more. The popula

, tion of Collier County was estimated at about 16,500 last year.

According to the reckoning of the county tax assessor, Sam Colding, if about 187 of those 285 square miles were subdivided the way the promoters say they can be, there would be 2.5 million homesites (this statement later revised, see p. 18.) Figuring three people to the home, that would be enough lots for 7.5 million people. The present population of the whole State is less than 6 million. The territory occupied by the three largest cities—Miami, Tampa and Jacksonville—adds up to only 149 square miles.

Florida has had more than its share of developers who were overambitious or downright crooked. As the Associated Press pointed out recently, the State is dotted with "hundreds of ghost subdivisions." (Text on p. 310.)

Two recent examples are Rocket City, which 3 years ago was the most hotly touted promotion in central Florida, but which went sour soon afterward, leaving some 2,500 investors holding the bag.

Senator WILLIAMS. What was that figure—2,500 investors ?
Mr. PAULSON. 2,500.
Senator WILLIAMS. How much had they invested, do you know?

Mr. PAULSON. No sir, I couldn't tell you that, a very rough guess would be that they would average about $1,000 each.

Senator WILLIAMS. Is that right, and the project folded ?

Mr. Paulson. Yes sir, they are in bankruptcy and the project is now involved in a very lengthy court fight.

Senator WILLIAMS. We have some of their very colorful and exciting brochures here which are part of our committee files. Here we have an invitation to see Rocket City, see Cape Kennedy via helicopter. This was one of the selling devices evidently to get people on a helicopter. How far is it from Cape Kennedy?

(A helicopter reservation card and the cover of the brochure follow :)



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Mr. PAULSON. I would say about 20 to 25 miles. It is between the cape and Orlando. They even convinced some of the newspapers in Florida that they had a hot thing going. Here is a special section from the Orlando Sentinel, dated April 14, 1965.

Senator WILLIAMS. What was the nature of the land they were offering?

Mr. Paulson. They bought up or optioned 36 square miles of remote land in that area and the plan called for developing a central city or what they called an urban suburban complex. And they actually did begin to develop it. I think they put in a golf course and a number of homes, and perhaps a shopping center or two. But the big profits were to come from acreage, semi-improved acreages, sold all around the periphery of this and extending several miles out.

Senator WILLIAMS. Is this on the ocean?
Mr. Paulson. No, sir; it is at least 20 miles in.

Senator WILLIAMS. This brochure suggests that they are close to all of the advantages for recreation by the sea ; Hialeah racetrack, it says, is 25 miles away.

Mr. PAULSON. To me this fiasco indicates that the whole concept of converting endless stretches of wilderness into an investment proposition for people of modest means is questionable, and perhaps basically unsound. You just don't pull a city the size of Orlando out of a hat in a few short years.

Furthermore, this kind of wildcat developing raises the specter of a problem that could be far more serious in future years. That possibility was discussed by Robert Caro, a brilliant and dedicated reporter for the newspaper, Newsday, in testimony at the 1964 hearings. I

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