It should be clear by now that if there is to be any real long-term solution to the foreclosure crisis, it must come from the local level and involve creative ideas. The federal government has proposed nothing but more centralized power and tax breaks for multinational corporations and have tried to label these schemes “foreclosure relief.” Instead of stealing money from renters to bail out foreclosure victims, Congress has taken the wealth distribution a step further and is stealing money from renters and homeowners in foreclosure to reward airlines and automakers.
Thankfully, some local governments and concerned citizens have begun to put into place methods to deal with high foreclosure rates in creative ways. From tearing down abandoned homes to turn into community parks, to refusing to conduct sheriff sales, to issuing fines to banks which allow houses to fall into disrepair, the fight against foreclosure is being conducted on the front lines of actual cities and neighborhoods. And, in this instance, the people are winning some significant victories against mortgage companies.
In Youngstown, Ohio, the city is reacting to an outflow of population by tearing down entire blocks of abandoned homes and turning the areas into public parks. Not only does this help alleviate the decline in property values caused by high foreclosure rates and abandoned homes, it also helps cut down on crime and vandalism in the community. Returning the land to its original condition is a great idea for this city, and the extra land may one day prove to be useful as a neighborhood garden, for instance. High food and transportation costs are here to stay, so the more food an area can generate on its own, the more sustainable it can be long term.
Philadelphia has also become a city known for its creative approach to the foreclosure crisis. The sheriff of the county first declined to perform any more foreclosure auctions of properties for at least one month. As cities become ghost towns and suburbs turn into crime-ridden slums and property tax revenue drops off a cliff, eventually local governments will have to stop the bleeding of people and wealth out of the area. Elected government officials such as county sheriffs have much to gain in popularity and public opinion by standing up for homeowners, even if the goals of homeowners are the same as the never-ending goal of government self-preservation. In this case, however, it may be that everyone in the community wins, and only the multinational, federally-subsidized banks lose out.
Another city in Ohio, this time Cleveland, has begun targeting the owners of foreclosed homes after the public auction to keep the properties in good condition or face steep fines and penalties. Lenders that thought they could simply trick homeowners into taking predatory loans and then steal the real estate from them and enjoy their new real assets and tax breaks may have to reevaluate their plans. Banks, more than anyone, are well aware that paper money and huge derivative account balances represent nothing but an illusion of wealth, and if the whole system comes crashing down one day, it is much safer to own vast portions of the country’s land, rather than worthless paper and digital points in an account. But if it will be prohibitively expensive even to own the land and let the buildings fall into disrepair, the local governments may decide to take over the properties and sell them back to local homeowners.
Due to the predatory nature of the entire real estate bubble and mortgage industry of the past decade and longer, there will be many victims of the scam. Towns are emptying out of homeowners to make room for criminals, while condo projects sit half-abandoned and half-built. As federal lawmakers debate how best to make sure their chosen corporations do not feel the brunt of the economic slowdown, it will be up to local governments to find solutions to the foreclosure crisis. Some towns are already implementing methods to preserve wealth in the community, and we can all learn quite a lot from their experiments with taking on the predatory banks.