Proximity to a boom-doggle

We thought UC Merced's First Chancellor Carol "Cowgirl" Tomlinson-Keasey's late-Nineties slogan --"Proximity is destiny" -- was about the finest piece of UC Merced Bobcatflak in an era of budget surpluses we ever heard. For those uninitiated in the Fabulous UC Bobcatflak or merely forgetful, the Cowgirl used the slogan to emphasize that -- although no one has yet figured out exactly why -- proximity to a UC campus raises the percentage of the population who goes to college. This percentage is supposed to be the best measure mankind has found for Truth and Beauty.

For those of us outside the Valley leadership circle, it was apparent that something else entirely was taking place, for which we created the slogan: "Proximity is density." Subdivision after subdivision was built and Merced vied with Sacramento, Stockton, Modesto and the State of Nevada for being the top target of real estate speculators taking out subprime mortgages. As these mortgages "reset" to much higher payments, "proximity" is beginning to mean dry lawns, dead garden foliage and swimming pools turned into stagnant mosquito nurseries.

The people of Merced were raped by the University of California, the developers on its board of trustees, it local, state and federal politicians (especially Rep. Dennis Cardoza, Shrimp Slayer-Merced), land-use planning agencies, local large landowners and special interests representing finance, insurance (like Bob "Mr. UC Merced" Carpenter), and real estate from here, there and everywhere.

Badlands Journal estimates that 40 percent of the real estate transactions in Merced were speculations and we are certain that largest part of the Merced population has only begun to realize the negative economic consequences of having won the competition for the San Joaquin Valley UC campus. For us, proximity to UC Merced means exorbitant real estate prices. We won't be elevated. We will be squeezed out and replaced, having fattened landlords, banks and realtors, utilities and local government on the way out.

The public works improvements required to support the new development is being built on our backs. We will see yet another million-dollar campaign to persuade us to raise our sales taxes to help pay for various expressways all leading to UC Merced. And this campaign, like all the others, will receive the enthusiastic endorsement of the people we elect to government, who gambled that we would pay for all the public works needed to support so much speculative development for the profit of so few and, it is becoming apparent, hardship for so many.

Honestly considered, UC Merced is an overpriced, under-enrolled, scofflaw junior college. It has been such an outrageous development project that -- a fitting tribute to its creators -- it has engendered a genuine addition to the American language, the word "boom-doggle," coined by a member of our editorial board.

Badlands Journal editorial board
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9-14-07
Merced Sun-Star
County report card close to D's and F's in 2006...Abby Souza
http://mercedsunstar.com/167/story/35941.html
Of the 40 California counties surveyed last year, Merced ranked 39th for the percentage of residents older than 24 who hold a high school diploma; only Imperial County ranked lower...the percentage of adults who hold a bachelor's degree, Merced ranked 38th out of 40. Sixty-four percent of Merced County residents over the age of 24 have a high school diploma. That compares with the statewide 80 percent and the national 84 percent. Eleven percent of Merced residents over 24 hold bachelor's degrees, compared with California's 30 percent.
While experts say lifting Merced out of its next-to-last position might prove a bewildering task, the implications of its ranking are clear. "The ripple effect that comes with an uneducated population is huge," said Simon Weffer, a professor of sociology at UC Merced...
The data come from the census bureau's 2006 American Community Survey, now conducted annually in cities and counties above a certain population.
While it's easy to blame Merced's K-12 education system...the causes lie with the types of industries in Merced, said Adrian Griffin, a senior policy analyst with the California Postsecondary Education Commission...said that Merced lacks industries that require an educated work force. For that reason, he said, highly educated Mercedians often leave the area to start their careers. ...people moving to Merced tend to be less educated.
Many say UC Merced is the key to accomplishing both, but that major change will take time. As a research university, Kevin Browne, UC Merced's vice chancellor of enrollment, said UC Merced will eventually attract high-tech companies. And even for students who don't choose UC Merced, the university's mere presence can make a difference, Browne said.

Modesto Bee
Housing tab rising in Northern San Joaquin ValleyJ.N. Sbranti
http://www.modbee.com/business/story/67789.html.
Homeowners in the valley pay far more each month for housing than most Americans, according to the 2006 American Community Survey...new data also shows homeownership rates are lower in the valley than the national average, while housing costs consume a much larger share of residents' income.
Homeowners traditionally have been advised to keep housing costs below 30 percent of their income. The same goes for renters, but many of the valley's renters didn't do that last year. In Merced County, for example, 51 percent of renters spent more than one-third of their income on housing.
The Northern San Joaquin Valley expanded its housing stock much faster than the national average from 2000 to 2006...census statistics show, the number of housing units rose 9 percent nationally but more than 18 percent in Merced and San Joaquin counties, and nearly 14 percent in Stanislaus County.
Despite the rapid growth, the valley's homeownership rates still lag behind the U.S. average. That's particularly true in the city of Merced, where census statistics show fewer than 40 percent of homes are owner-occupied. Nationwide, more than 67 percent of homes are owner-occupied.

Foreclosure not an issue for nation's vast majority...Kenneth R. Harney, Washington Post
http://www.modbee.com/business/story/67771.html
The rate of American home loans entering the foreclosure process last quarter hit the highest it's been in the history of the survey, which dates back to 1953.
But from a national perspective... The answer is: Not as bad as it may sound. Drill down into the latest delinquency and foreclosure numbers and you'll find that for the overwhelming majority of homeowners across the country, delinquency and foreclosure are not issues -- at least not yet.
To begin with, remember that mortgage delinquency problems only affect people with outstanding loans, and more than one out of three homeowners own their properties debt-free. Of the remaining two-thirds of all owners with active mortgage accounts -- the latest survey examined 44 million of them -- prime loans that are 30 days past due or more constitute just 2.6 percent of all loans nationwide. In other words, among mortgages made to borrowers with good credit at application, 97.4 percent are continuing to be paid on time.
The numbers get more sobering when you look at how borrowers with subprime mortgages are performing: 14.5 percent of them nationwide are behind on their payments by at least 30 days. That's more than five times the rate of delinquency among prime borrowers. On the other hand, 85.5 percent of subprime borrowers are still paying on time every month, according to the survey.
The numbers get even worse when you look at the performance of subprime borrowers who took out adjustable-rate loans, such as the notorious "2/28" mortgages that allow low monthly payments for the first two years but then reset upward with a big jolt at the beginning of the third.
What about the record jumps in new foreclosure filings? In 34 states, the rate of new foreclosures actually decreased. In most other states, the increases were minor, except in California, Florida, Nevada and Arizona, where they were attributable in part to investors walking away from condos, second homes and rental houses they bought during the boom years. In Nevada, for instance, non-owner-occupied (investor) loans accounted for 32 percent of all serious delinquencies and new foreclosure actions. In Florida, the investor share of serious delinquencies was 25 percent, in Arizona, 26 percent and in California, it was 21 percent.
Bottom line: The scary foreclosure and delinquency rates you're hearing about are for real. But they're highly concentrated -- among loan types, local and regional economies, and especially prevalent among investors in formerly high-flying markets who are finally throwing in the towel.

Sacramento Bee
Foreclosures gain on sales
An ugly new duel in capital area: Home keys picked up vs. those lost...Jim Wasserman
http://www.sacbee.com/103/story/378452.html
...For roughly every two homes sold in August in the capital region, one house went into foreclosure, according to the newest sales statistics released Thursday...
grim ratio may worsen as fall and winter sales traditionally slow and foreclosures keep rising, analysts say. Already, in Sacramento County in August, there were more defaults -- the first indicator of payment problems that can trigger foreclosure -- than sales, DataQuick reported.
Last month, 2,978 new owners picked up keys to homes they purchased in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, La Jolla-based DataQuick Information Systems reported Thursday. But in those same counties during August, 1,367 homeowners in foreclosure handed their keys back to the bank, according to Fair Oaks-based Foreclosures.com, a Web site for real estate investors.
"Sacramento (County) was positioned almost perfectly to take the brunt of this housing storm," said DataQuick analyst Andrew LePage.
Sacramento County now shows the region's worst ratio of sales to foreclosures. The county reported 1,527 escrow closings during August and 772 bank repossessions, according to DataQuick. The county also tallied more defaults during the month -- 1,869 -- than sales, statistics show. But analysts like McGee are quick to caution that only about one-third of people going into default will eventually lose their homes to foreclosure. DataQuick says about half of those in default in California will likely lose their homes.

8-31-07
Merced Sun-Star
Are we forever poor?...Our View
http://www.mercedsunstar.com/opinion/story/13944522p-14506970c.html
Distressing news came to light this week when it was revealed Merced County residents are poorer than ever... new information from the United States Census Bureau should be a rallying cry for making wholesale improvements to underlying conditions present in the county...more must be done -- and soon -- to raise the educational level of Merced County's residents. We need more high-paying jobs with the well-qualified workers to fill these positions. Both of these elements are lacking right now. we need stepped-up efforts to enhance this area's chances of landing top-notch employers looking for qualified workers. More minimum-wage jobs aren't the answer. Between 2005 and 2006, the percentage of Merced County residents living in poverty rose from 18.1 percent to 21.5 percent...about one out of every five people living here. The county's median income level also dropped nearly $1,600 between the two years, further evidence of this area's profound poverty and worsening economic conditions. It's no secret Merced County's economy is not very well-diversified at present. It's mainly farm-based, subject to vagaries from Mother Nature and cyclical agricultural conditions. Couple recent setbacks in some crops along with a severe downturn in the county's housing industry and one can see why the poverty figures have jumped.