by Rebecca Fairley Raney
Paradise in Peril
What it won: Top Well Done award in metro division of Gannett Well Done, the quarterly corporate competition. The "Top Well Done" recognized the best of show against newspapers that included The Detroit News, the Louisville Courier-Journal and the Des Moines Register.
This project may not have won all that many awards, but it was a big winner in terms of impact.
The series ran over four days, at a length of more than 10,000 words, with nine stories and six detailed graphics. It resulted in an act of Congress that established a $15 million pilot program in which people coming off the welfare rolls would receive training in refurbishing and demolishing blighted houses. Just as significantly, it fueled a movement of neighborhood associations in the city that has remained active and engaged ever since.
The project was a real achievement in reporting and in using technology.
I put it together over the course of seven months. To find neighborhoods that had seen significant decline, I used a half-dozen databases, including code enforcement complaints, Home Mortgage Disclosure Act applicants, property foreclosures and inventory listings for the Department of Housing and Urban Development.
I geocoded 17,000 code-enforcement complaints using computer mapping software. I tracked declining neighborhoods using grid analysis, a precise, time-consuming method that involves cutting a map into little squares and counting the complaints in each one.
And in interviews with 88 residents, I met a lot of interesting people who were sad about what was happening to their neighborhoods.
Paradise in Peril: Falling Fortunes
The San Bernardino County Sun
Sunday, Jan. 26, 1997
Even in the worst of times, San Bernardino preserved a slice of paradise. The crime, the poverty and the economic collapse that scarred the city stayed out of its better neighborhoods.
Now, that paradise is slipping away.
The trouble takes form in empty houses, broken windows, dying yards and peeling paint. Blight is spreading north. It is attacking the city's best neighborhoods.
The northern half of San Bernardino has produced the city's greatest surge of complaints about junk cars, trashy yards, tall weeds and boarded-up houses, according to a Sun computer analysis of code-enforcement complaints from 1993 to 1995.
People say they are complaining because the appearance of the neighborhoods no longer meets their standards.
If blight takes permanent residence in the city's best places, the last of San Bernardino's fortunes may fall.
The problem of creeping blight comes down to more than a matter of appearance. If the stable neighborhoods crumble, San Bernardino could lose the middle-class families that pay its taxes and keep it alive.
"Appearances mean a lot," said Peter Dreier, former Boston housing director who is now professor of politics and public policy at Occidental College in Los Angeles.
"The image of the city deteriorates, and businesses don't want to go there and the middle-class families leave. It leads to the flight of the people you need to maintain the tax base."
To keep those people, the city needs to save the marginal neighborhoods. But city officials, intent on rescuing the central city from decay, don't see it that way.
"I believe the heart of the city is where we should work," Mayor Tom Minor said. "You have to make the heart OK before the rest of the body is good."
Very few of the neighborhoods that showed increases in code-enforcement complaints in The Sun's analysis are in the central city.
In neighborhoods where complaints are increasing, several factors are common. Houses are changing hands rapidly. Foreclosures are leaving a train of vacant houses. Property values are diving.
The ensuing flight of prosperous residents and the crumbing of their neighborhoods makes the recent parade of bad news even worse for a city that has seen more than its share of troubles.
In recent years, the big stories have been of San Bernardino, the murder capital of California. San Bernardino, which lost 10,000 jobs when a military base closed. San Bernardino, with 40 percent of its residents on welfare.
Minor said the city has suffered from problems beyond the control of local leaders.
"San Bernardino is like any other city that's old and tired and has lost a lot of jobs. . . . It hurts. When you have that sort of thing, you have foreclosures.
"I don't think there's a lot the city can do."
In five of the neighborhoods in The Sun's computer analysis that showed the greatest number of code-enforcement complaints, several factors were common. An analysis of property records, deed transfers and home mortgage data showed:
• The homes are changing hands rapidly. In the last five years, the numbers ranged from 23 percent of homes changing ownership in one neighborhood to 49 percent in another.
• Foreclosed blighted properties sit vacant in these neighborhoods for months at a time.
• Property values are tumbling. In some cases, people are being offered half the money for their homes that they were offered five years ago.
• Newcomers make less money than previous buyers.Three of these five neighborhoods are in north San Bernardino, and two are on the West Side. Four of the five once were heavily populated by Norton Air Force Base personnel.
Many residents lost work when the area's major industries left town.
And as high-paying jobs vanished in aerospace, the railroads and Norton Air Force Base, housing prices dropped. In San Bernardino County, prices have fallen 18 percent in five years, according to the Real Estate Research Council of Southern California at California State Polytechnic University, Pomona.
The result: decline.
The effects vary from street to street.
In some of those neighborhoods, the decline is subtle. One house sits vacant. The grass dies. The neighbors complain.
In other neighborhoods the changes are drastic. Well-kept houses with fresh paint and groomed lawns sit next to tumbledown buildings with trash-filled lots.
The residents of a neighborhood between West Seventh Street and Vine Street, just east of the Rialto city limits, saw it happen.
Most houses there were built between 1957 and 1968, and most were settled by people stationed at Norton.
Few people now will say it's a nice neighborhood. The few who do tend to have moved there recently from gang territory closer to the center of town.
The yards are fenced and the windows are barred. Two houses on Vine are boarded up. Trash blows down the street. The lawns, from one to the next, look like a quilt of brown patches next to green.
"Twenty-five years ago, all these yards were green," said Vanzetta Oxendine, who retired after serving at Norton. He moved to the neighborhood in 1971 because his kids wanted a house with a pool.
His original neighbors died, moved away to keep their jobs or sold because of burglaries. The neighborhood hit bottom in the last five years. Oxendine has seen the houses all around him shot up in gang fights.
He knows exactly what he wants to change.
"My address," he said quietly.
Fran Vargo down the street moved to the neighborhood in 1960.
On her way to the bingo parlor recently, carefully decked out in an aqua beret and matching earrings, she gladly stopped to talk about the way things used to be.
"This used to be a very exclusive area," she said. "My husband worked for the railroad and I worked for a law firm. You used to have to have a good income to live here."
She saw the houses start changing hands in 1969, property values fall and properties change to rentals.
She stays because the house is paid for, the tax rate is capped under Proposition 13, and she has a good gardener.
She knows the neighborhood will never change.
"It'll never go back to what it was," she said. "People just won't move in."
But she holds the memories of how it was when she moved there.
"It was beautiful. Gorgeous! I felt like I was in another world," she said. "You had to be financially comfortable to live here."
Foreclosures leave trail of blight
The San Bernardino County Sun
Tuesday, Jan. 28, 1997
No one thought much about foreclosures in 1990, and HUD was hardly a household name. That year, 137 houses fell into foreclosure in San Bernardino.
By 1995, the number of foreclosures reached 942. Since the economy crashed five years ago, everyone has heard of HUD.
Four out of 10 foreclosures in the city go to the U.S. Department of Housing and Urban Development.
The houses sit vacant and boarded up, often for more than a year. They sit in every neighborhood from North Verdemont to South Waterman.
In many cases, these abandoned houses are the husks of a government policy so sacred that no one questions it. Federal and local policies push to increase home ownership, even among very poor people. In fact, converting rentals to owner-occupied homes has been a city priority since 1993.
Now mortgages are going to more people in San Bernardino who are ill-equipped to pay for repairs, according to a Sun computer analysis of home mortgage data. As a result, neighborhoods may suffer.
"It does not sound to me like you are increasing home ownership out there. It sounds like you are providing homes to people who cannot afford them," said John C. Weicher, senior fellow at the Hudson Institute, a think tank in Washington. Weicher also served as HUD's assistant secretary for policy development and research from 1989 to 1993.
"The community does not benefit from having large numbers of vacant homes. You don't gain anything by buying a house and losing it three or four years later."
More people are buying homes in the city with government-backed Federal Housing Administration loans. In general, people who use FHA loans to buy homes make less money, housing experts say.
These loans default in San Bernardino at four times the national rate, according to HUD figures.
The abandoned houses left behind arae targets for vandalism, targets for trouble. They blight their neighborhoods. Houses remitted to HUD ownership generate three times more complaints than other homes, according to HUD listings and city code-enforcement complaint records.
Still city and national leaders are pushing the policy hard: Increase home ownership. Offer more money to lower-income buyers.
"Overall, FHA has been the significant avenue for first-time homebuyers," said Rep. Jerry Lewis, R-Redlands, who chairs the congressional committee that oversees HUD's budget.
"I'm confident that strong support for that program will continue."(CUT)
In just four years, the income of home buyers has dropped substantially, according to data collected under the Home Mortgage Disclosure Act.
In 1992, the median income for people who bought homes in the city was $50,000. In 1995, the median income was $44,000 -- a drop of 12 percent. Countywide, the drop was 8 percent.
The number of people who earned $10,000 to $20,000 a year who bought homes in the city more than tripled in four years.
Forty-seven loans went to borrowers who earned between $10,000 and $20,000 a year in 1992 -- 2 percent of all loans issued in the city. In 1995, 151 borrowers fell into that income range. They made up 5 percent of the loans issued in the city that year, according to HMDA data.
As people with less money buy homes in San Bernardino, more mortgages are backed by the government.
Half the loans issued in the city were government-backed in 1992. Just four years later, in 1995, 62 percent of home loans were government-backed, according to HMDA data.
The national rate for FHA financing is much lower. In 1991, less than 30 percent of homeowners nationwide had FHA loans, according to a Census housing survey.
"It looks to me like you've had a remarkably large volume of FHA lending, and there have been problems there," Weicher said.
At any given time, HUD has about 300 repossessed homes on hand in San Bernardino.
When Mike Fremont started working as HUD's property manager five years ago, the regional office in Santa Ana would have 300 or 400 properties on hand throughout Orange, Riverside and San Bernardino counties.
"We used to get 30 properties a month and sell 30 properties," he said. "It was kind of laid back."
About three years ago, the number of foreclosures exploded. HUD sold 4,800 properties in the three counties in 1994 and 6,000 properties in 1995. Four thousand are still in the three-county inventory.
"It was a real shock to get 650 houses in a month," Fremont said. "It's an unbelievable thing."
Inspectors run into vagrants, junkies and prostitutes plying their trade in the houses.
. . . The inspectors find memories in the houses, too.
On a recent Friday, [Howard] McCurry and [Craig] Williams were inspecting a newly acquired two-bedroom house on Myrtle Street just south of Base Line. Toys were strewn across the living room floor in front of the big, white-brick fireplace.
Among the debris, the family's eviction summons lay on the dining room floor.
"Oh no," McCurry said. "I hate to see this." He paused under the arch that led from the living room to the dining room.
Along the inside of the arch were pencil marks tracing some of the history of the family that left. There was a mark for Christopher, the smallest child. One for Amber, who was a little taller. One for William, one for Genevieve and one for Heather. One for Dad.
Someone left a note in the garage for the people who would take the house. It was written on a paper plate taped to a work bench.
"Sorry we left a big mess," it said. "We was in a hurry."
A street in search of a neighborhood
The San Bernardino County Sun
Tuesday, Jan. 28, 1997
No one disputes that Herb Holmes built some beautiful homes. They had swimming pools, alarm systems, garage door openers and intercoms. The kitchens came complete.
He finished them with the orange-tiled roofs so popular 10 years ago and even closed the street with a gate.
Problem was, Holmes was a crook.
The neighborhood he built was destroyed by a never-ending cycle of foreclosures.
The homes here look like fortresses, with bars on the windows and bars enclosing the porches. Trash blows through the gutters. On West 13th Street, a Chevy with a bullet hole in the windshield recently rested by the curb.
"Thirteenth Street," Milton Hayes said with a shake of his head. "It's just been not so lucky."
He and his wife, Sharon, were the first to move into the new tract. They came from Long Beach nine years ago with hopes of building the foundation for the neighborhood where they would spend the rest of their lives.
The neighborhood never emerged.
They watched four or five cycles of foreclosures take the houses on the street. Five different families have lived in the house next door since 1988.
"We cannot get a neighborhood here," Milton Hayes said. "The turnover -- we've seen them come and go. I figured we'd have a great community."
The first foreclosures hit within two years after the houses were built.
Holmes, the builder, had issued loans from his own mortgage company. The Hayeses knew people who got mortgages from Holmes even though they had no jobs.
Holmes later was convicted on eight counts of fraud. The charges were related to issuing fraudulent mortgages to buyers in San Bernardino and Riverside counties, said Assistant U.S. Attorney Spurgeon Smith, who prosecuted the developer.
He remembers the case, and the criminal, well.
"The guy was a classic con man," Smith said.
Holmes at one point was using the identity of his dead brother, Smith said. One of his identities, on paper, was employed by the other. When he went to file for a court-appointed attorney because of financial hardship, Holmes drove his Rolls Royce to the courthouse. He didn't get the free lawyer.
All but four of the 14 houses on this stretch of West 13th Street fell into foreclosure. Several went back to the banks more than once.
Last fall, five of the houses sat vacant. Two more torn, empty homes blighted the streets that circle from 13th to Miashia Lane to Home Avenue. All belonged to HUD.
The foreclosures dragged down property values.
The Hayses describe the waves of people who moved in and out of the neighborhood in the last nine years.
The first wave was people who couldn't afford the houses and lost them.
The second was people who bought low and got upset when the neighborhood didn't come up to par quickly enough.
The third wave was people who commuted to Los Angeles -- people who lost their jobs when the economy crashed.
The fourth wave brought a couple of landlords who bought the houses low, out of foreclosure.
And somewhere in there, a couple of drug dealers bought in.
The drug dealers were run out. These days, the people on the street are just happy not to have gunfire.
Neighbors give the police credit. The police share the credit with the city-run Rio Vista project, which combines police work, code enforcement and residents' suggestions to clean up the area.
The street has gotten some peace, but it has never gotten a community.
"I grew up in Mississippi, and there were no neighbors on the street we didn't know," said Cleveland Palmer, who moved to 13th Street in 1989. "On this street, people move in and out like gypsies."
The cycle of foreclosures is continuing.
Around the corner on Home Avenue, Delores Hamilton is losing her home.
She bought it six years ago, renovated the inside and decorated in a theme of calm lavender and green. Soon boards may replace the lace curtains in the windows.
Hamilton did her part to keep up the rest of the neighborhood, too.
"To live in this neighborhood, you have to be willing to complain about existing problems on an ongoing basis," she said. "And you have to follow up on the complaints."
She's losing the house because of delays in a disability settlement over an injury she suffered five years ago breaking up a fight in a California Youth Authority jail.
The house was boarded up when she bought it.
"HUD told me I have to put up a 'For Sale' sign," Hamilton said. "I put so many personal things in here, I don't want to have to get up and move."
She paid $97,000 for the house. It was recently assessed at $73,000.
The house next door is empty. A "For Sale" sign sits out front. The grass has yellowed. At the next house over, a HUD repo sign hangs under the basketball goal on the garage.
Still, Sharon Hayes is not discouraged. She recently put together a group to paint a block wall in the neighborhood. She has gotten in touch with the Rio Vista partnership group and hopes to put the program to work on her street.
The Hayeses won't leave.
"I have a determination," she said. "I figure, Lord, if I can beat two surgeries for cancer, then I can build a neighborhood. I figure I have a purpose.
"One of these days," she said, "I will see us have a neighborhood."
Like other longtime residents on the street, she traces the instability to Herb Holmes and his bad mortgages and the foreclosures that followed.
Holmes was convicted in 1994. He got five years.
OTHER WINNING STORIES:
Mailing address: P.O. Box 3409, Crestline, Calif. 92325