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Abstract: 

Housing development bonds, popularly termed “dirt bonds,” have been a feature of the municipal bond market ever since they became popular in fast-growing states such as Texas, Colorado, and California. The magnitude of the collapses in these states combined, however, does not come close to the meltdown currently going on in Florida. This article discusses what went wrong in Florida and how to remedy the problem. The solution is going to require a restructuring of many failed projects, a restructuring that will probably include a reduction of the bond debt that a project can reasonably service.

Keywords: Housing Development Bonds; Community Development Districts; Restructuring

Affiliations:  1: Income Securities Advisor, Inc,.