Last week, the research firm RealtyTrac released its foreclosure rate rankings for 2007. It was no surprise to see Detroit, long a poster child for industrial decline and urban blight, at the top of the heap. But what to make of the four California metro areas -- Stockton (No. 2), Riverside/San Bernardino (No. 4), Sacramento (No. 5) and Bakersfield (No. 7) -- that also appeared among the top 10? If the effects of the sub-prime mortgage meltdown go on unabated, will these cities too come to exemplify a new class of sunnier and warmer, but in other ways equally bleak, slums?
Anecdotal reports aren't encouraging. In Stockton, highlighted in a "60 Minutes" segment in January as the "foreclosure capital of America," 4.8% of homes went into foreclosure last year. Lawns in front of abandoned houses there have gone brown -- so many that one enterprising entrepreneur is spray-painting dead grass a nontoxic bright green to improve neighborhoods' curb appeal. County officials have reported a surge in auto arson, attributing it to desperate homeowners who torch their cars to collect insurance money. Abandoned pets, known as "foreclosure animals," clog local humane shelters.
In the Inland Empire boom areas of Riverside and San Bernardino counties, calls to 211, which connects people to social service agencies for food, clothing, shelter and other emergency assistance, have skyrocketed. Last summer, the San Bernardino 211 hotline reported that 40% of its calls came from the 10 ZIP Codes with the highest foreclosure rates.
According to data from the foreclosure tracking firm Default Research, hardship in the Inland Empire and other parts of California appears to be concentrated in exurban neighborhoods such as Palmdale, Perris and Fontana. It's more than a little sad that the recent growth in these communities was fueled in part by an influx of Latino and African American families who took out sub-prime loans to buy relatively affordable homes -- homes as far away from the gangs and blight in neighborhoods like Pacoima and South Los Angeles as they could possibly get. (Those areas too suffer a disproportionate share of foreclosure activity.)
California's inland exurbs became boomtowns because borrowers, wisely or not, chased the American dream. Now they may face an American nightmare, different but no less dismaying than the one they so recently fled.