Green Pools--Not the Environmentally Friendly Kind

Posted by: Chris Palmeri on June 6, 2008

green pools.jpg
The Los Angeles Times had another sad but well reported story about the housing bust hitting home. This time it’s in Temecula, California, one of the those classic ex-urbs full of McMansions that’s located about half way between Los Angeles and San Diego and a little further inland. What’s unusual about Temecula is that it’s a fairly upscale community, Southern California wine country, and yet now buffeted by a rash of foreclosures.

As the Times reports, one of the problems the city faces, and probably countless other cities across the country, is green pools. These are swimming pools in abandoned homes that are now filled with algae, dead birds and debris. They are festering sources of mosquitoes and potential disease and it is the job of city workers to go around and disinfect them. The number of green pool reports is up 45% in the past year in Temcula. Another example of how municipal costs are rising even as property taxes fall.

Reader Comments

snoz

June 12, 2008 6:19 AM

Contrary to what Palmeri claims about the geography of Tecmecula, it is in fact located in Riverside County, substantially away from LA and San Diego. (You can Google map it. I'm disappointed that professional journalist Palmeri failed to check his sources) In fact, Tecmecula is isolated from Orange County and LA by the hugh Cleveland National Forest, a federal reserve/park. It is not an upscale community as Palmeri claimed but rather it is populated by people who could not afford the over-speculated high cost of housing and living standard in Orange County or who seek to avoid grid-lock-traffic, suffocating smog, and high crime of Los Angeles. The housing in Tecmecula is principally entry and middle class, not luxury McMansion in wine country that Palmeri would have you believe. As in the previous South California real estate scam and its subsequent bust, Tecmecula has historically suffered the brunt of the foreclosures. Tecmecula, Murietta, Moreno Valley and other subdivions of Riverside County is where desert land is abundant, dirt-cheap and over-built because of massive avarice real estate speculation. In an earlier bust, big builders that purchased raw land then graded final housing pad for $50,000 each had to sell for $10,000 at the bottom of the bust, and this is after the street improvements of subdivision have been constructed. Tecmecula homeowner, of course, lost their equity as in other places. In California, the oldest and biggest pyramid scam is real estate, real estate, and real estate. So in the '90s as in the '80s and '70s, these busted homeowner had to wait about 10 years for the next pyramid real estate scam to take hold. As long as someone bought the mortgage papers, the scam goes unabated. In 2007, the scam was exposed when these mortgage papers were proven to be worth much less than promised. The ensuing liquidity crises paralyzed Wall St and the banking industry, and killed the real estate pyramid scam. For many southern Calfornia cities that were also fooled by the scam, "green pool" is an insignificant problem when compared to the re-payment of municipal bonds whose value was based on projected housing growth providing the tax base for repayment of principal and interest. Instead of writing two paragraphs on "Green Pool," Palmeri should do some real investigative journalism and write about how the real estate scam will affect the ability of cities to repay their newly issued municipal bonds. He should look into how the California's City of Vallejo fell into bankruptcy as a result of the real estate scam gone bust. BW has fallen to a new low when two paragraphs qualifies as journalism when in fact they do not even qualify as a "sound bite." Perhaps, sadly the salary of journalist has also fallen to a new low at BW.

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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