KeNo's Housing and Economic Portal: Saturday June 27 Housing and Economic stories

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TOP STORIES:

Congresswoman's abandoned house angers neighbors - (www.latimes.com) Laura Richardson's former home in Sacramento's upscale Curtis Park neighborhood is in disrepair. Residents say they have appealed to her and House Speaker Nancy Pelosi without success. Reporting from Sacramento -- John Bailey thought it was great when his neighbor was elected to the House of Representatives in 2007. "Not everyone lives next door to a congresswoman," he said. But two years later, he doesn't feel so lucky. The congresswoman's house is abandoned and in disrepair, "a blight on the neighborhood," Bailey said. He thinks the way that Rep. Laura Richardson (D-Long Beach) has treated her Sacramento home tells far more about her than her voting record. "I wouldn't want anyone that irresponsible to represent me," said Bailey, like Richardson a liberal Democrat. "What I don't get is how she has the time to visit with Fidel Castro but doesn't have time for her own house. If you can't manage your own household, you probably shouldn't get involved in international affairs." He's not alone. Neighbors have complained to the city, written letters and e-mails to Richardson and House Speaker Nancy Pelosi , but the three-bedroom house remains an eyesore. Neighbors just wish she would sell it or let it go into foreclosure, anything to get it into the hands of someone who would care. "She shows total disregard for everyone in the neighborhood," said Sean Padovan, a retired police sergeant. "She ought to be embarrassed and ashamed." Richardson did not return phone calls for this story. The problems with the house began shortly after Richardson was elected to the Assembly in 2006 from Long Beach and bought the two-story house in the leafy Curtis Park neighborhood. It wasn't long before Padovan, 62, angry that the lawn wasn't being mowed, knocked on Richardson's door, told her he was a neighbor and asked if she minded if he cut the grass. He hauled out his hand mower, and when Richardson still seemed to have no interest in taking care of her yard, he stuck a gardener's card in her door with a note saying that she should call him if she had questions. He never heard from Richardson, not a thank-you or a wave as she walked past. After Richardson was elected to Congress in 2007 in a special election, she moved out around Labor Day. She told Bailey that she planned to rent out the house. Later that year, he sent her an e-mail with a link to a real estate agent who could help. He never received a response.

Lake Las Vegas sees climbing foreclosures, falling values - (www.lvrj.com) Owner aims to 'reset and reposition' community. It was a symbol of Las Vegas largesse during the good times. Now it's an emblem of recession blues. With a man-made lake in the desert, an Italian-style village beyond the suburban sprawl and neighborhoods fit for diva Celine Dion, the Lake Las Vegas resort development flouted good sense and modesty in the tradition of all great Las Vegas dreams. But it has fast turned sour for some. Last year, the developer, Transcontinental Corp., lost the property in foreclosure after defaulting on $540 million in loans. The new owners of Lake Las Vegas filed for Chapter 11 bankruptcy last summer. One if its anchor hotels, a Ritz-Carlton owned by Village Hotel Investors LLC, also filed bankruptcy to stave off foreclosure and has been sold to new owners. One of three premier golf courses has been abandoned. New-home construction has slowed to a crawl, though the community is far from built out. Foreclosures have spread like a virus, and home values are falling. Even the sparking, blue lake -- the jewel of the luxury haven -- nearly sprung a leak, forcing engineers to rush to make repairs before it drained. Not surprisingly, residents are jumping ship. In May, nearly 10 percent of the homes on the market at Lake Las Vegas were either bank-owned or short sales, meaning they were priced so low a sale would not satisfy the owners' debt to the bank, according to Applied Analysis, a real estate research firm. Nearly 80 percent of the homes listed were vacant. "I thought it was a no-lose situation. It ruined me," said Ed Santacruz, a former mortgage broker and fortune seeker who let his Lake Las Vegas hotel-condominium go into foreclosure. He had planned to rent out the property to tourists, but couldn't get enough takers to cover the mortgage. "That's where I messed up, I believed enough in the product and in Las Vegas," Santacruz said. Lake Las Vegas' woes largely are due to now familiar problems. The community was designed as both a resort and residential destination -- leaving it heavily dependent on second-home buyers and tourism. Both faltered when the economy sputtered. "There was a point and time when the higher end of the market had been less impacted. But as the recession has run longer and deeper than initially expected. .." said Brian Gordon, a principal at Applied Analysis. The community that strove for seclusion wasn't as isolated as some thought. The palm trees and putting greens of Lake Las Vegas emerge out of the near empty desert off a dusty suburban highway 17 miles from the Strip. The homes are clustered around a 2-mile-long lake that defies the scorching heat and environmentalists, alike. A replica of Florence's Ponte Vecchio, a popular venue for weddings, crosses the water on the south end, near a tasteful, small casino. Two of the community's three golf courses were designed by Jack Nicklaus. Promotional materials boast a seven-minute commute to the Las Vegas casinos on the horizon -- by helicopter. The idea of exclusive desert resort living originally was the brainchild of J. Carlton Adair, an actor and businessman. Adair acquired the land in 1966 in a swap with the federal government that also included the rights for 10,000-acre feet of water. Creating what he planned to call Lake Adair would require damming water destined for Lake Mead, the Colorado River reservoir that provides water to Southern Nevada. But Adair went bankrupt before his dream was realized and a subsequent group of investors also failed to raise the necessary money. Transcontinental took up the cause in 1990, a year before the dam was completed. The city of Henderson, a bedroom community next to Las Vegas, was attracted by the promise of a new solid tax base. It agreed to sell the community the water it would need to replenish the evaporation under the scorching sun. The community pays a water bill of about $2 million a year. The decision was blasted by environmentalists, who now see a bit of karma in Lake Las Vegas' recent troubles.

DoD: Protests are "Low-Level Terrorism" - (open.salon.com) The Department of Defense is training all of its personnel in its current Antiterrorism and Force Protection Annual Refresher Training Course that political protest is "low-level terrorism." The Training introduction reads as follows: "Anti-terrorism (AT) and Force Protection (FP) are two facets of the Department of Defense (DoD) Mission Assurance Program. It is DoD policy, as found in DoDI 2000.16, that the DoD Components and the DoD elements and ersonnel shall be protected from terrorist acts through a high pirority, comprehensive, AT program. The DoD's AT program shall be all encompassing using an integrated systems approach." The first question of the Terrorism Threat Factors, "Knowledge Check 1" section reads as follows: Which of the following is an example of low-level terrorism activity? The "correct" answer is Protests. A copy of this can be found on the last two pages of this pdf. The ACLU learned of this training and on June 10, 2009 sent a letter to the Gail McGinn, Acting Under-Secretary of Defense for Personnel and Readiness, objecting to their training all DoD personnel that the exercise of First Amendment rights constitutes "low-level terrorism." For those who have worried about a trend - evident, for example, in the USA PATRIOT Act, the universal and ongoing government surveillance of all of Americans' electronic communications that began in February of 2001 (seven months before 9/11), the global war on a tactic (terrorism), therefore making this war unending, the unprecedented pre-emptive arrests of protestors at the 2008 Republican National Convention with those protesters being charged as "domestic terrorists," the justifications for torture, pre-emptive wars of aggression, ongoing occupations, American gulags such as Bagram, suspension of habeas corpus, and "prolonged detention" for acts omeone might commit, not what they have done, FBI et al infiltration of protest groups and the government's acknowledged use of undercover agents (agents provocateurs) in said infiltration, thus giving the government under the rubric of fighting domestic terrorism unrestrained and unsupervisable power to suppress legitimate political activities, the unleashing and justifications for Christian fascists to murder those they do not like (such as the assassination of Dr. George Tiller and the killing at the Holocaust Museum a few days ago) - this news adds further fuel to the fire. These are not items from some famously vilified, non-US dictatorial regime. These are items from the good ole USA, land of the free and home of the brave.

Proposal to bulldoze empty houses - (www.telegraph.co.uk) Dozens of US cities may have entire neighbourhoods bulldozed as part of drastic "shrink to survive" proposals being considered by the Obama administration to tackle economic decline. The government looking at expanding a pioneering scheme in Flint, one of the poorest US cities, which involves razing entire districts and returning the land to nature. Local politicians believe the city must contract by as much as 40 per cent, concentrating the dwindling population and local services into a more viable area. The radical experiment is the brainchild of Dan Kildee, treasurer of Genesee County, which includes Flint. Having outlined his strategy to Barack Obama during the election campaign, Mr Kildee has now been approached by the US government and a group of charities who want him to apply what he has learnt to the rest of the country. Mr Kildee said he will concentrate on 50 cities, identified in a recent study by the Brookings Institution, an influential Washington think-tank, as potentially needing to shrink substantially to cope with their declining fortunes. Most are former industrial cities in the "rust belt" of America's Mid-West and North East. They include Detroit, Philadelphia, Pittsburgh, Baltimore and Memphis. In Detroit, shattered by the woes of the US car industry, there are already plans to split it into a collection of small urban centres separated from each other by countryside. "The real question is not whether these cities shrink – we're all shrinking – but whether we let it happen in a destructive or sustainable way," said Mr Kildee. "Decline is a fact of life in Flint. Resisting it is like resisting gravity." Karina Pallagst, director of the Shrinking Cities in a Global Perspective programme at the University of California, Berkeley, said there was "both a cultural and political taboo" about admitting decline in America. "Places like Flint have hit rock bottom. They're at the point where it's better to start knocking a lot of buildings down," she said. Flint, sixty miles north of Detroit, was the original home of General Motors. The car giant once employed 79,000 local people but that figure has shrunk to around 8,000. Unemployment is now approaching 20 per cent and the total population has almost halved to 110,000. The exodus – particularly of young people – coupled with the consequent collapse in property prices, has left street after street in sections of the city almost entirely abandoned. In the city centre, the once grand Durant Hotel – named after William Durant, GM's founder – is a symbol of the city's decline, said Mr Kildee. The large building has been empty since 1973, roughly when Flint's decline began. Regarded as a model city in the motor industry's boom years, Flint may once again be emulated, though for very different reasons. But Mr Kildee, who has lived there nearly all his life, said he had first to overcome a deeply ingrained American cultural mindset that "big is good" and that cities should sprawl – Flint covers 34 square miles. He said: "The obsession with growth is sadly a very American thing. Across the US, there's an assumption that all development is good, that if communities are growing they are successful. If they're shrinking, they're failing." But some Flint dustcarts are collecting just one rubbish bag a week, roads are decaying, police are very understaffed and there were simply too few people to pay for services, he said.

If the city didn't downsize it will eventually go bankrupt, he added.

Gloom Over California House Prices Hard to Shake - (www.cnbc.com) Matt Bording doubts many in his financial bind would agree that home prices in California are near a bottom. And there are many in his predicament. Bording owes more on his mortgage than his Richmond, California house is worth so he is giving up on the loan. "We're walking away," Bording told Reuters, noting he will soon hand his lender the keys to the three-bedroom house he bought with his wife in 2005 because its value has plunged with his zip-code's median home price over the last year. "It's down about 60 percent," he said. "I don't see that rebounding in a realistic time frame." Brisk sales of foreclosures are leading optimistic analysts to forecast an end to the misery of falling home prices in California, a first step to recovery in a key housing market at the epicenter of the U.S. mortgage crisis. But Bording says his neighborhood is full of for-sale signs for known foreclosures and the disrepair of other houses suggest their owners share his view: "They may want to jump off a sinking ship." Bargain Hunters on the Hunt: Some analysts say the slide in home values in California has run its course thanks to buyers with government mortgages and investors snapping up foreclosed properties. "We're running out of foreclosed units in most places," said Alan Nevin of MarketPointe Realty Advisors in San Diego. "It looks like we're straightening things out." The state's median price for an existing, single-family home rose 1.4 percent in April from March to $256,700, marking two consecutive months of gains.

Tycoon has $21M house taken England's biggest repossession - (www.dailymail.co.uk) A property tycoon has had his multi-million pound home taken off him in what is thought to be Britain's biggest ever repossession. Cevdet Caner bought the seven-bedroom home in Mayfair, London two years ago for £16million and spent £5million refurbishing it. But last week bailiffs took the house after his Monaco-based property investment company Level One went into administration with debts of £1.2billion after it was badly hit in the economic slump. The firm, which acquires low-cost homes and social housing Germany, collapsed last year and the house was put on the market in December, but did not sell. However Mr Caner, who moved out of the house two weeks ago, claims he tried to prevent the repossession by offering to repay lenders Credit Suisse what he owed them but that they refused to accept his money. He said: 'The house was bought with a £16million mortgage. 'I have offered to repay this amount back - most recently, through my lawyers, three weeks ago, but the lenders refused. 'Instead they put the company into receivership, sent in bailiffs to repossess it and have not instructed agents to find a buyer. 'I can't understand why they are doing this, other than to humiliate me and damange my reputation.' Hamptons International, joint agent for the house with Sotheby's, will market the house this week for £20million. If the house sells for more than £16million, than the money will be refunded to Mr Caner.

OTHER STORIES:

The Bear Market Never Ended - (www.finance.yahoo.com)

The Debt Conundrum - (www.seekingalpha.com)

Two crash book reviews - (www.nytimes.com)

Another crash book review - (www.examiner.com)

Wealth of Baby Boom Cohorts After Collapse of Housing Bubble - (www.scribd.com)

Three Not-So-Optimistic Economists - (www.huffingtonpost.com)

Infill in US Urban Areas - (www.newgeography.com)

Recover, Bubble, Reform, Fumble - (www.theautomaticearth.blogspot.com)

Smuggling $134 billion in T Bills? Woah! - (www.bloomberg.com)

Senators Involved With Health Care "Reform" Have Industry Ties - (www.huffingtonpost.com)

In Denmark, they pursue your mortgage debt for rest of your life - (www.housingdoom.com)