Tuesday, May 24, 2011

Paul Reyes: Exiles in Eden

So relieved that this book is as good as I was hoping! I believe I found Paul Reyes' "Exiles in Eden" in a short list of book reviews from "The Nation," when I was skimming through looking for books to have on the list for a library trip. When you go to the library, especially in Oakland, you have a big list. Even if you check the catalog before leaving the comfort of home and have a smaller list of books that are supposed to be on the shelves, they're not all there. So it's important to have a wide range of books you want to read. I have found a library (the Rockridge branch) that has an appealing "New Nonfiction" section that's *almost* as good as browsing a bookstore, but it seems like the biggest sections are new-age religion and DIY money managing, so it's really not all that exciting. So "Exiles in Eden" went on the list and was there the same day. Which was great, since I also picked up "The Turquoise Ledge" that day, and we all know how that turned out.

I'm in the privileged position of being able to say that I'm slightly sick of hearing about the foreclosure crisis. I'm lucky that I'm not directly affected by it: I rent and my family members have made smart investment decisions. I'm very challenged when it comes to understanding banking and the financial system, so it's taken me a long time to understand even the basics of how the economy got into this mess, and what banks and why defaulted (?), made predatory loans (?), and caused foreclosures. This is another reason I haven't paid attention to it: I just can't wrap my head around it. I'm acknowledging that I'm extremely lucky to be in this position where I don't have to understand this stuff. Reading "Exiles in Eden" was an insider, eye-opening look at what's going on, a reminder of my privilege.

Reyes' parents are in the foreclosure real-estate business, and he spends some time working for his dad, who cleans out the foreclosures to get them ready to sell. I mean cleans out: tears up rotten boards, takes the trash and furniture left behind to the dump, cleans the yards out of all kinds of plants, etc. It's not a pretty business. He meets the sheriffs at the houses on eviction days- one sheriff had done over 10 evictions on one day. Talk about burnout! He works with a pair of old-time cleaner-outers that have worked for his dad for years, and even though the foreclosure is booming business (sad, right?) these guys struggle to make ends meet. While banks make money off of crappy loans, even the foreclosure economy is a trickle down economy and the people working the houses of victims of poverty into shape make almost nothing. Reyes talks to and writes about some of the people whose houses he is cleaning out and they all, to a person, seem as confused about why they are losing their houses as I am about the whole foreclosure/economy thing. They aren't sure what banks they are indebted to, they're not sure where the money they are paying (or not paying) is going to, or how the system works.

And heartbreakingly, Reyes shows that the scams these people are unclear about are not new. He takes us to his parents house in the middle of nowhere. 40+ years ago, on their honeymoon, they were swindled into paying $10 down, $10 a month for a house in Florida that they never saw. The house was portrayed as the ideal retirement on a quarter of an acre, which seemed like a ton of land. Only the developers who sold them, and tons of other people, the land, never planned to build houses on this land. And now, there never will be houses on this land: there's no infrastructure like sewage, power, water, etc. Reyes finds the plot and there is one house for miles around. It's a wasteland of a money suck: thousands of people have been sending money in for decades, for empty land, just as the people losing their houses now are sending money in to pay interest for loans that they will never be able to pay off. The people who lent them the money, the banks that made the loans, knew these debtors would never be able to pay off the loans, just like the property owners in Florida knew there were never going to be houses on that land. Easy money, taking advantage of the American dream of home-ownership and the almost universal lack of education about finances.

Interestingly, on a walk today, a man clearing a weedy yard offered to sell me a house about 2 blocks away for $284,000. He pitched hard, even though he said he was just the gardener, and that it wasn't his house. He told me it was a good investment, and maybe someone I knew wanted to live close to me. A few months ago, I was considering buying a house- it seemed like something someone my age should do. I felt I wanted to live in Oakland forever, and that I was in a stable place in my life. Obviously, this isn't in the picture now, since I'm intentionally not working. Further, I'm not convinced that Oakland is a good investment- sure, everything comes around, but as Reyes articulates, it's just not clear when the end of the cycle is- my lifetime isn't seeming so possible for Oakland's economy. The house I was offered was probably $600k a few years ago, and I just don't see that happening any time soon. Triangulated from my house and that house, two men were killed, by OPD, a few nights ago. At the library, part of my walk today, a library staffer was getting a petition signed because the new Oakland budget includes cutting 14 of the 22 libraries. And supposedly, the economy is doing better. Maybe it is doing better, for some, who have figured out how to profit off of the bottom. Reyes' book shows part of the rest of the story.

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