People Are Leaving

by Molly Ivors

Back in the 1980's, as the Reagan Revolution gave way to the bleakness of Bush 1, no one I knew talked much about what was happening to the economy, except to praise it. Reagan had successfully convinced people that poverty was a personal failing, and that the value of a company had more to do with what they did for their stockholders than for their workers. Union membership, which was at 23% in 1983, was beginning a serious decline, largely due to outsourcing of union jobs and a massive increase in the nonunion workforce. Currently, union membership hovers at around 12%, including both working adults here on Liberal Mountain. I note this not only because yesterday was Labor Day, but because this was the beginning of the long slide which we're finally seeing hit the middle class, apparently to the surprise of the media and pundits. Michael Moore tied all these threads together in his 1989 film Roger and Me, connecting outsourcing, the attack on unions, and erosion of formerly middle class communities into vacant decay. But of course, he's fat.

I flashed onto Roger and Me, and especially the decline of housing in Flint, reading this:

Can the Mortgage Crisis Swallow a Town?

Tammi and Charles Eggleston never took out a risky mortgage, never borrowed more than they could afford and never missed a monthly payment on their neat, three-bedroom colonial in the Cleveland suburbs. But that hasn’t prevented them from getting caught in the undertow of the subprime mortgage mess now submerging this town.

Over the last 18 months, the Egglestons have watched one house after another on their street, Gardenview Drive, end up foreclosed and vacant. Although lawns are still tidy and empty homes are not boarded up and stripped as they are in inner-city Cleveland, the Egglestons say Maple Heights no longer feels safe after dark. Nor do they have the confidence they had when they moved in a decade ago that this is the ideal place to raise their 6-year-old twin girls, Sydney and Shelby. So, in May 2006, they put their home on the market in order to move closer to Mrs. Eggleston’s parents in another middle-class Cleveland suburb, Richmond Heights.

They have had no takers. Although they lowered the asking price to $99,000 from $109,000, no one has even come to look at it in more than six weeks. “My heart panics every time I drive down the street and I see another for-sale sign,” says Mrs. Eggleston, pointing past the placards in front of her porch to others that dot surrounding yards like lawn furniture. “Some people on the street couldn’t pay, so they just left. The competition to sell is just ridiculous.

Flint, as it turns out, was not an exception, but a harbinger. Stagnating wages could be papered over, for a time, by credit, but the 2006 bankruptcy bill largely took care of that issue. The mortgage market was bound to be the next to go. People had bought more house than they could reasonably afford because they could, and for no other reason. Square footage soared, the construction industry boomed, everybody was happy, because the costs were all being pushed down the line, onto homeowners whose economic status was by no means guaranteed in an economy seemingly desperate to eliminate the middle class.  Those who owned their homes outright leveraged them for spending money--not necessarily for boats and trips, but for bills and food. I'm no economist (for that, see Atrios) but this has been coming a long time, and it's going to get worse before it gets better.

Near Liberal Mountain, there's a small church. When I was a student, I did an independent course of instruction on Irish migration to this area: unusually high, because the Irish tended to migrate to cities, like Thers's people, not to rural areas like this. The priest there showed me the walls of the church, three bricks thick, and explained that it had been built from the ruins of a seminary that burned down in the 1860's. Between 1830 and 1860, it had been a thriving community of immigrant and first-generation Irish, bustling, even. He told me no one really knew how large the seminary had been (the plans and everything else had been stored in it), but they were still finding caches of bricks around the churchyard, 130 years later. I asked what had happened, because now the community has a very low population density and no industry to speak of, and he said "the war. The boys all went to the war." That's the Civil War, of course, and the sacrifice of this part of the world makes up, in some small way, for the brutal behavior of their countrymen in other areas.

I note this story because it's not so unusual here to see old schools and churches and foundations of houses abandoned and overgrown. The war never really disappeared here: its mark is on the landscape. Communities can cease to exist, as unthinkable as that might be for their residents.

Similarly, our urban landscape is pocked by boarded-up buildings and vacant lots: the money to renovate them simply doesn't exist. The tax base is eroding, cutting further into the available funds for projects.

But the cause of these abandoned buildings isn't a war, at least not in the traditional sense.  Instead, these vacancies are the result of greed, underemployment, and economic insecurity. In the Times article linked above, the author notes that foreclosures are not a particularly good business move for mortgage lenders, costing them easily half their investment, but that they do it anyway, sneering at mediators and borrowers alike.

What happens to communities that cease to exist? Well, they revert to nature, I guess, or at least that's what happened here. But of course, those were farmhouses, scattered across the landscape, widely spaced. Nature was taking back what farmers had wrested briefly from her. A boarded-up McMansion development, or even one of small family homes as described here, will almost certainly be more creepy, more ghostly, more disturbing.  A fitting memorial to the Thirty Years War waged on the middle class.

Now back to your regularly scheduled snark.

Comments

[dyspeptic]

Nice perspective. And the Irish went to the cities because the potato famine gave them their fill of farming.

One difference though between those ghost towns and failed communities and the urban experience is the scale and investment in infrastructure. Once the tax base, and for that matter, population starts falling, the infrastructure becomes more and more inefficient. Same amount of streets and pipes and tracks and light poles but fewer dollars to support them. Maintenance becomes less frequent as does replacement. Things become shabbier, people move away. Same thing happens to the schools and public transportation.

We now have many smaller, shabbier and sadder cities, mostly in the northeast, that represent huge investments in infrastructure going (or gone) to waste. Corporate relocation, white flight, union busting, manufacturing loss have all contributed to this. Now what is essentially fraud in a deregulated industry may give us a series of 9th wards in a nation full of financial New Orleans.

[flory]

Excellent perspective. My friends in the mortgage business have been telling me for a couple years now that this is what is going to happen to the newer suburban developments. Most, if not all, of the owners bought at the height of the bubble, bought more house than they could afford and are all seeing their mortgages become unaffordable at the same time. Entire developments become uninhabited all at once.

[Captain Goto]

I look up and down the streets in my suburban neighborhood, and it sure looks to me like there are a lot of houses with people not actually living in them; i.e. lots of barely-maintained lawns, families that never actually seem to be out and about, etc.

Then I look at the state of my own house, which I expect would take some $15K just to get in shape to sell, and I get a chill (never mind the car with 120K miles on it, and the busted oven and dishwasher). I just refi'ed about three years ago, so I'm pretty well stuck here...thank God for the 5.375% fixed mortgage, anyway.

[Captain Goto]

And, while I'm at it, never mind the $40K in school loans and the $12K line of credit I ran up while in grad school. Sigh.

And *I'm* actually doing pretty well, considering. My best bud (another guy paying off midlife school loans) is going broke while working two McJobs, trying to hang on to a nice but very old house in a neighborhood that's sprouting those mini-mansions.

I just got back from the DC area, where I stayed over with a couple I met here in Western PA--he got a chance to work with a friend doing beltway consulting, and he's actually making decent bucks. But the house they bought in Columbia, MD (featured in LIFE Magazine, circa 1971!) can't be supported on only one income, and the job she had with W.R. Grace after finishing grad school with an international biz degree, just evaporated under her.

Mr. Yeats--what was that about "Things fall apart; the centre cannot hold?"

[Incertus (Brian)]

In Fort Lauderdale, if you're within 5 miles of the beach, it's not so much the case with McMansions, but condos and townhomes that are sitting empty, and it's worse in Miami, which apparently has 28K empty condos right now with another 23K supposed to come on the market in the next year. You'll drive past a high rise at night, and see signs of life in 2 windows--wouldn't want to get stuck with a hurricane assessment in that place. And unlike McMansions which can be turned into rooming houses if absolutely necessary, there's not much you can do with high end condos except hope rich people show up again.