Last February, the sirens howled in Hollywood as the LAPD rushed reinforcements to the 5600 block of La Mirada Avenue. While a police captain barked orders through a bullhorn, an angry crowd of 3,000 people shouted back expletives. A passerby might have mistaken the confrontation for a movie shoot, or perhaps the beginning of the next L.A. riot.
In fact, as LAPD Capt. Michael Downing later told the media: "You had some very desperate people who had a mob mentality. It was as if people were trying to get the last piece of bread."
The bread-riot allusion was apt, although the crowd was in fact clamoring for the last crumbs of affordable housing in a city where rents and mortgages have been soaring. At stake were 56 unfinished apartments being built by a nonprofit agency. The developers had expected a turnout of, at most, several hundred. When thousands of desperate applicants showed up instead, the scene quickly turned ugly, and the police intervened.
A few weekends after this tense confrontation, another anxious mob -- this time made up of more affluent home-seekers -- queued up for hours for an opportunity to make outrageous bids on a single, run-down house with a cracked foundation in a nearby suburb renowned for its good schools.
No surprise there. Los Angeles' underfunded, overcrowded and violent schools, according to a recent report by Harvard researchers, currently fail to graduate the majority of their black and Latino students, as well as one-third of whites. Parents, as a result, are willing to make extraordinary sacrifices to move their children to suburbs with functioning public schools.
The Southern California housing crisis, of course, has a sunnier side as well. In the last five years, median home values have increased 118% in Los Angeles and an extraordinary 137% in neighboring San Diego, according to Business Week. Homes, as a result, have become private ATM machines, providing their owners with magical, unearned cash flows for purchasing new SUVs, making down payments on vacation homes and financing increasingly expensive college educations for their kids. Second mortgages and home refinancings, according to a Wharton School survey, have generated an astounding $1.6 trillion in additional consumption nationally since 2000.
