As to CAR’s earlier links today, a few things really stood out to me in Dr. Husing’s prophetic Power-Point presentation (2010) on the City of San Bernardino:
Pg 3: Inland Empire (IE) was down 93,327 jobs between 2008 and 2009
Pg 4: By 12/09, the IE had a 15% unemployment rate
Pg 6: By 2009, the IE had 3x the unemployment rate of 2000 to 2008
Pg 8: By 2009, building permits in the IE had declined 82.4% since 2005
Pg 10: The economic base of the IE has always been largely blue-collar
Pg 15: Question: Would three million people have actually relocated to CA between 1997 and 2007 if there was was no new construction there available to purchase with easy qualifying terms?
Pg 18-19: Out of 1,080,328 existing homes in the IE, 628,327 were “underwater” in 2010. Out of those “underwater,” 250,831 (40%) were in default in 2010, 183,447 (29%) had a Notice of Sale file on them and 119,066 (19%) were REO’s. This leaves 12% of these underwater homedebtors in the “Squat-SS” group, the “Squat-Mod” group or the group still paying their mortgages in a timely manner.
Pg 23: 51.5% of the SB’s households are tenants
Pg 24: 25% of the IE’s SFRs are tenant-occupied or vacant
Pg 25: 38.3% of SB’s households receive some form of public assistance
Pg 44: The RE crash in the IE affected those who worked in FIRE and related industries the most
Pg 48: 48.5% of adult SB Co residents possessed a HS Diploma or less; 47.8% of adult RIV Co residents possessed a HS Diploma or less
Pg 53: In 2004, 93 ships in the Port of Los Angeles could not be unloaded due to not enough available labor (this was NOT due to a lockout or strike)
Pg 57: The IE lost 34,900 manufacturing jobs since 2007
Question to ponder: If Dr. Husing’s info on pgs 10, 23, 24, 25 and 48 was accurate or near-accurate in 2000, why did the IE’s leaders vote to approve all the subdivisions they did??
…What sets Stockton and San Bernardino apart is a far narrower set of circumstances: They were at the epicenters of the American housing bubble and the American housing bust.
How bad was the bust? Of the 372 federally designated metropolitan areas in the United States, Stockton ranks first in foreclosures, while Riverside-San Bernardino-Ontario ranks third. Among the thousands of U.S. cities, San Bernardino proper ranks third in foreclosures, while Stockton ranks fifth. Ranking the May unemployment rates in those same 372 metropolitan areas, with the area with the lowest unemployment listed as No. 1, Stockton ranked 364th and San Bernardino 354th. Unemployment in the city of Stockton in May stood at 17.5%. In San Bernardino, it stood at 15.9%.”
. . . It’s these numbers, not political chicanery or wage-and-pension rigidity, real though [sic] they may have been, that set Stockton and San Bernardino apart and that best explain what happened to them. That means any assessment of blame for their predicaments has to expand from such usual suspects as greedy public employees to include banks that flooded these cities with subprime mortgages that were resold into the high-flying securities market. It should include the huge retail corporations that have devised supply chains that employ area residents at barely livable wages.
Conventional wisdom may blame the unions and the pols. The facts tell a different story.
As to this piece, I agree that Stockton and SB both have many factors in common which contributed to their bankruptcies. Both overbuilt with *new* residential construction (which was primarily sold to underqualified buyers). This comedy of errors led to a complete crash of their residential RE values leading to a precipitous drop in property tax revenues and jobs in the local RE/construction industry.
However, unlike the author, I believe the pols ARE to blame. It was actually THEY and/or their appointed officials (their direct reports) who issued or caused to be issued voluminous subdivision permits, primarily during the millennium boom, which, along with readily available NINA purchase money 1st and 2nd TDs and refinance 1sts, 2nds and HELOCs, was the direct cause of the boom and bust cycle which followed. The boom cycle caused the cities of SB and Stockton to be flooded with new residents who would not have otherwise have flocked there but for all the *new* construction available for no money down in CA with easy qualifying which was priced at far less than the coastal cities.
See my comments where I already discussed this phenomenon:
[quote=bearishgurl on July 14, 2012 – 3:00pm.][quote=no_such_reality]. . . Tax proceeds may have fallen, but they haven’t fallen that much. It’s a sign of the massive over building, over staffing cities have done. . . [/quote] Actually, NSR, tax proceeds to CA cities and counties HAVE fallen a great deal, due to downward adjustments made by many CA county assessors in accordance with Proposition 8 . . . [/quote]
