Will The Foreclosure Crisis Turn Into A New HGTV Program?

Timothy Egan's OpEd in Wednesday's NY Times, Slumburbia focuses in on one specific "foreclosure alley" in Northern California, Lathrop in the San Joaquin Valley, an area where local political shysters-- former and possibly future Congressman Dick Pombo calls immediately to mind-- have been in cahoots with unregulated, greed obsessed developers all through the disastrous Bush bubble years. But Egan could have been just as easily been talking about the Inland Empire in Southern California or about the housing crisis in Arizona, Nevada, or, worst of all, Florida. Egan is the author of The Worst Hard Time which won a National Book Award for his recounting of the history of the Dust Bowl; he knows what he's talking about. In fact, if it was government-encouraged over planting of crops in the Great Plains states during World War I that laid the groundwork for the Great Dust Bowl, it was government encouragement of over-planting of suburbs that laid the groundwork for the Great Recession. Ironically, many of those families worst hit by the Dust Bowl in Oklahoma, Iowa, Texas and Kansas fled to California and Florida where their grandchildren are among the hardest hit victims of the housing crisis. Egan points to the calamity these people are going through as "what happens when people gamble with houses instead of casino chips."

Dirty flags advertise rock-bottom discounts on empty starter mansions. On the ground, foreclosure signs are tagged with gang graffiti. Empty lots are untended, cratered with mud puddles from the winter storms that have hammered California’s San Joaquin Valley.

Nobody is home in the cities of the future.

In a decade, they saw real property defy reality in real time in these insta-neighborhoods that sprouted in what had been some of the world’s most productive farmland.

In places like Lathrop, Manteca and Tracy, population nearly doubled in 10 years, and home prices tripled. After inhaling all this real estate helium, some developers and their apologists in urban planning circles hailed the boom as the new America at the far exurban fringe. Every citizen a homeowner! Half-acre lots for all! No credit, no problem!

Others saw it as the residential embodiment of the Edward Abbey line that “growth for the sake of growth is the ideology of the cancer cell.”

Now median home prices have fallen from $500,000 to $150,000-- among the most precipitous drops in the nation-- and still the houses sit empty, spooky and see-through, waiting on demography and psychology to catch up.

In strip malls where tenants seem to last no longer than the life cycle of a gold fish, the bottom-feeders have moved in. “Coming soon: Cigarette City,” reads one sign here in Lathrop, near a “Cash Advance” outlet.

Take a pulse: How can a community possibly be healthy when one in eight houses are in some stage of foreclosure? How can a town attract new people when the crime rate has spiked well above the national average? How can a family dream, or even save, when unemployment hovers around 16 percent?

In the last year a record 2.8 million homes received foreclosure notices and something like 5 million homeowners are "underwater" on their mortgages. When these people walk away these insta-suburbs there is every chance that they are condemning them to turn into insta-slums.


A year ago, when the House passed the Helping Families Save Their Homes Act not a single California Republican-- not even those representing the districts with the worst avalanches of foreclosures-- voted for the bill-- a bill specifically designed to keep families in their homes. In some cases the districts are so reflexively reactionary that the gamble that it won't matter will probably pay off-- like for lunatic fringe reactionaries like George Radanovich, Jerry Lewis and Devin Nunes. But several Republican obstructionists in California may well have just sealed their electoral fates by sticking with the banksters and abandoning their own constituents. And in none of these districts can they put forward the Republican claim that only African-Americans get foreclosed on; in these districts it's almost all white people who are losing their homes, often because African-Americans have been carefully gerrymandered out of the districts!

The worst hit district in California is CA-03 way up north, very close to Tim Egan's "foreclosure alley." Only 4% of the population is black. The district has the 15th highest foreclosure rate in America, nearly 18,000 families out on the streets, and their representative is one of California's craziest extremists, Dan Lungren. With ZERO help from the DCCC, he came close to defeat in 2008 (he was re-elected with 50% of the vote, while Obama and McCain were tied). Another far right ideologue who was nearly defeated by a political unknown at that time is the GOP's corrupt screwball Ken Calvert in CA-44, the 21st hardest hit district in America (second worst in California), with 16,043 foreclosures so far and 53,411 projected over the next 4 years. Obama beat McCain in the formerly solid-red Inland Empire district and Calvert's winning percentage was 52%. The guy who nearly beat him, Bill Hedrick is running again-- and this time is very likely to win. Polling this week shows that most people in the district think it's time for Calvert to go. The district is 5.5% African-American, so the Republican racist mantra about who gets foreclosed on won't fly there either.

This afternoon Hedrick talked with me about how devastated the inland California home market has been by multiple financial shocks. "And much like our renowned earthquakes," he pointed out, "the reverberations continue to ripple through our towns and cities forcing more and more residents into foreclosure through a brutal 'shakedown.' If the earth slips, it is an 'act of God.'  The financial and government elites have acted as if the mortgage ‘shakedown' should also be laid at the Lord’s feet-- rather than hung around the necks of the predators who provoked the crash in residential values.

"Residents of the 44th Congressional District and across the inland valleys were not infected by greed. They were, however, afflicted by the scourge of an unregulated financial sector, predatory lenders collecting huge fees for pushing risky loans, and adjustable rates predicated on an ever-rising market value. Now, the combination of depressed values and bailed out banks that refuse to lend or modify loans, leave homeowners hanging by a prayer and in need of substantive mortgage relief. 

"Our nation has rightly rushed to aid quake-ravaged Haiti. In Riverside County and inland California, hard pressed working families need help to dig from the financial rubble left from the economic tremors caused, not by God, but a lawless lending industry. We cannot wait any longer."

Replacing Calvert with Hedrick in November will certainly help but, meanwhile, I wonder if Obama can trap the GOP into helping families caught up in the foreclosure crisis the same way he's "managing" to trap them in regard to health care.

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