Where Did All the People Go?

A once-thriving neighborhood is now a ghost town thanks to Miami's multimillion-dollar housing fiasco

"They pulled everybody out very very fast. They tore the buildings down very very fast," remembers Loraine Hibbert, co-owner of Shrimp, Wings & Things, a take-out restaurant three blocks from Fly Head's tree-trunk memorial. "But they're putting them up very very slow." In fact the city has yet to begin construction. The few new houses that have risen are the work of small private contractors and local nonprofits.


Model City has been a model for failure since the Sixties. Initially it was a county entity, which planners carved out in response to President Lyndon Johnson's Great Society pipe dream. But only the easternmost portion of it falls within the City of Miami. To drive its perimeter take I-95 north to NW 71st Street, head west to NW Seventeenth Avenue, take a left, and head south to State Road 112, Model City's southern boundary.

The Section 8 housing-subsidies program, launched by the Nixon administration in 1974 and continuing today, did not prevent Model City from contributing heavily to Miami's status as America's fourth-poorest city in 1990. According to that year's census, almost half the neighborhood's 25,222 residents were living in poverty. Unemployment rates were at least 35 percent in most census tracts, with some tracts soaring above 65 percent.

One reason Model City has been a perpetual failure is that the area has also functioned as a model money pit. Over the years, millions of tax dollars have flowed into the hands of developers, some of whom were incompetent or unscrupulous, and none of whom were held accountable by city officials.

It was supposed to work like this: The city's Community Development Department (CDD) would receive financial grants from the U.S. Department of Housing and Urban Development (HUD). The city would then dole out this money, in the form of loans, to owners of apartment buildings, who in turn were supposed to use it for renovating their properties. The principal and interest paid back on the loans would then be added to a line of credit HUD extended to the city, which could reinvest the money in more initiatives to improve Miami's housing stock.

In exchange for paying down their loans and keeping their units affordable for the poor, the landlords were guaranteed a steady stream of income in the form of Section 8 rental payments. But there was one egregious glitch in the system. "The contract also said that the city had to do inspections on a yearly basis to ensure that the buildings were in a decent, safe, and sanitary condition," recounts Barbara Gomez-Rodriguez, a CCD assistant director. "The city failed to do that. So these buildings were very deteriorated."

The most notorious were the five apartment buildings known as Miami Limited II, located behind Southall's coin laundry, and a nearby seven-building complex called Miami Limited. Both were part of developer Art Martinez's extensive rental-property portfolio, which also included a building in Overtown and dozens more throughout the county. Martinez began operating Miami Limited in 1983 under a contract with the county's housing agency. Shortly thereafter he entered into a similar agreement with the City of Miami for Miami Limited II. Then came an astoundingly long period of negligence. "The city failed to do quality inspections for twenty years," Gomez-Rodriguez reports. Meanwhile Martinez pulled in millions of dollars in Section 8 rent.

In 1998, however, 150 angry women who were raising children in Miami II apartments infested with cockroaches and rats noisily marched into Miami City Hall and demanded change. Their case was bolstered by a few concerned public servants such as juvenile court Judge Thomas K. Petersen, who documented the conditions and sent letters of outrage to local commissioners and housing officials. The county soon canceled its contract with Martinez. The City of Miami did so a year later. "We went to HUD and said, 'Look, we need to cancel this contract. This guy is really lousy as a landlord. He's a slum landlord,'" says Gomez-Rodriguez, who joined the CDD in 1998. HUD officials agreed to provide vouchers so the 110 families living in Martinez's Miami Limited II could relocate to other Section 8 housing. City attorneys then began the slow process of voiding his contract. "You don't cancel a contract -- a very prosperous contract for him -- in two days," Gomez-Rodriguez explains. "He appealed, he got attorneys from Washington. So it was an ordeal we went through and it cost us."

Gwendolyn Warren, who took over as CDD director in 1998, when the department was in the middle of this crisis, estimates that Martinez received a total of three million dollars to renovate the five buildings in Miami Limited II. Martinez told the Miami Herald in 1999 that the apartments were "totally rehabilitated, brand-spanking-new in 1989 and '90," and blamed the subsequent deterioration on the tenants.

Martinez wasn't the only Model City slumlord to finally take some heat as the century came to a close. Four others were identified in a 1998 audit by HUD's Office of the Inspector General. Investigators found that over a period of fifteen years the city had failed to force the owners of 29 other low-income rental properties to repay about $10 million in loans. The Model City portion of that tab was more than $1.5 million. Had the city collected the principal and interest as it should have, at least $20 million would have been added to Miami's line of credit for future housing projects. (Nearly all this slipshod loan management occurred during the corrupt administration of Cesar Odio, who served as Miami city manager from 1985 to 1996.)

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