By J. G. Robinson

This is the first column I will write for the San Diego Free Press, so let me introduce myself.  I am an activist, a sociologist, a college professor, a San Diego resident for over 25 years, and I will be looking at San Diego through all of these perspectives.  The academic in me means that I have a gut level commitment to the importance of data, reason, and a complex notion of truth.  I do not believe that advocacy is merely yelling louder or not admitting the truths held by people with whom I disagree.  But neither do I believe that political disputes are solved by whoever has the best data.  As the UC cognitive scientist George Lakoff has pointed out, most of us adopt a political/emotional frame, and then find facts to fit that frame.  I want this column to do more than provide data points for frames.  I want to look hard at the events and processes that affect life in our city.  I won’t bore the reader with footnotes or citations, but if these are wanted, I will be happy to provide them.

For the first few weeks of this column I will be looking at the impact of the foreclosure crisis on San Diego.  California is second only to Nevada in the percentage of homes going through foreclosure, and San Diego has had one of the highest rates of this problem in the state.  What is happening here tells us much about the nature not merely of the housing crisis, but of the entire economic meltdown that has devastated our city, state, and country.

I have spent the last year and a half of my life researching the impact of foreclosures on members of our community.  I have interviewed homeowners, realtors, bankers, loan counselors, political activists, politicians, and community leaders about this issue.  In each column I will a particular facet of the crisis, but then, and most importantly, look at the experiences of people who have suffered through the crisis.  We are witnessing what the Nobel Prize winning economist  Paul Krugman has called a “lesser depression”, and the stories of people hammered by this event deserve to be heard.

To begin, let me talk about “Notices of Default”.  A notice of default is what is filed in the first step toward foreclosure.  It means that a loan has become overdue and the borrower is at risk of defaulting on the loan. Before anything else can be done, this notice must be filed.  Not all defaults are of mortgages (though the majority are).  Not all defaults proceed to foreclosure, and there is some duplication.  For example, a couple may receive two separate notices in the listings filed by the County Assessor’s Office.  This measure, however, gives us a rough gauge of how this crisis is affecting our community.

During the housing bubble (2000 to 2006) San Diego County averaged about 19 thousand default notices annually.  Over the last four years that number has gone up by a factor of nearly 6, to over 109,000.  The biggest single year was 2009 when 139, 379 notices were filed.  That is an average of 381 daily!  Even compensating for the messiness of these numbers mentioned above, that is still an incredible increase.  It means that, at its peak, the foreclosure crisis was affecting hundreds of our fellow residents daily.  This is not to mention those whose homes are underwater, which, according to Zillow, is over 1/3 of all mortgages in San Diego County.  Nor does this take into account the impact of foreclosures on the neighbors and communities of these people.  A foreclosure not only brings down the value of the home affected, but neighboring homes as well.  This, in turn,reduces property taxes and increases the cost of government services as crime and vandalism in the abandoned properties increase.  Corrine Wilson, at the Center for Policy Initiatives, reports that between 2008 and 2012 foreclosures have cost the residents of the city of San Diego  over $19 billion in lost home values, and cost the city government of San Diego between $134 million and $854 million in lost property taxes, increased cost in police, etc.).  If we simply take the mid-point between these two estimates, that puts the cost over this four year period at $494 million or about $124 million annually,.  Let’s put that number in perspective.   According to Andrea Tevlin, the city’s independent budget analyst, the savings from Prop B (the anti-worker pension reform that was passed in the last election) is $950 million over 30 years.  This adds up to an annual savings of roughly $32 million.  In other words, foreclosures are costing the city nearly four times what the city hopes to save from attacking city worker pensions.  While the Carl De Maio’s of this city have been beating up on city workers, the real money has been going to the havoc created by bankers.

The story is even more disturbing when we look at the individual groups affected by the foreclosure crisis.     While Americans as a whole lost about a quarter of their total wealth between the peak of the economy in 2007 and the trough in 2009 (CNN Money 2011), according to the Pew Center, African Americans lost ½ of their total wealth and Latino’s lost 2/3.  Since the greatest amount of wealth owned by the average American is the equity in their home, this is a reflection of what has happened in the housing market.   San Diego, with it’s large Latino population has, of course, been particularly hard hit.

To get a sense of this I did a random sample of defaults, comparing the Spanish surnamed defaulters to the rest of the population.  Before the housing bubble burst in 2004 roughly 30% of default notices filed were for Spanish surnamed individuals.  Since the population of San Diego County is about a third Latino, and since there is a lower rate of home ownership among Latinos than among Anglos, this percentage of defaults seemed reasonable.  However, by 2008 that percent had climbed to nearly half (48%).   In San Diego the foreclosure crisis, at least in its early phase, spoke with a disproportionately Latino accent.  The most vulnerable in our community were those most dramatically affected by the crisis.

In the next series of columns I will look at the human side of this crisis.  Statistics give a superficial understanding of an event like the foreclosure crisis, we need to hear from those who have  experienced it first-hand.  I will start next time with a discussion of a Latino family, followed by columns focusing on an Anglo family, a real estate agent, a loan officer, a  political activist, and conclude with a column on what should be done about this situation.  These will not always be pretty pictures.  The stories these people tell will be heart breaking, aggravating, outrageous , and hopeful.  In other words, they will be pictures of the personal truth of foreclosure.  Nothing less is acceptable given the scale of the problems we face.