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Fight gangs by treating rentals as a business

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POSTED July 29, 2010 2:15 a.m.
You’ll notice no one is talking about the 900-pound gorilla in the room with just 96 days to go to the Manteca municipal election.

Yes, gang activity, downtown, public safety, economic growth are all extremely important but you could argue the real issue that is going to define Manteca for years – if not generations – to come is how we deal with foreclosures. The truth is foreclosures and how they are handled will impact every major area of concern voiced so far by candidates for council and mayor.

The latest top 10 metro areas for foreclosures nationally in the first six months of the year include Modesto at the No. 3 spot and Stockton at the No. 6 position. Smack dab in the middle of Stockton and Modesto is Manteca.

RealTrac reports there are currently 484 homes that are bank owned in Manteca with 284 in various states of default. We are not out of the woods.

Having said that, things are tough but we’ve moved away from the abyss. There have been 2,921 existing homes close escrow in Manteca during the last 30 months. That means people are either credit worthy enough to secure mortgages or paid cash. There were 308 new homes sold in Manteca in 2009. Compare that to Stockton where there were 120 new homes sold and Modesto with 8 new homes sold.

Unemployment is still high at 14.4 percent in Manteca. Retail sales are strongest in terms of year-to-year comparisons in Manteca compared to anywhere else in San Joaquin County.

Contrary to popular belief an edict from a president doesn’t magically change the national economy, nor does anything elected councils do. Yes, there are things the elected leaders can do to try and prime the economy but in the end it’s the fears, aspirations, and spending habits of  309 million Americans that drive the fate of the U.S. economy just as 67,000 consumers in Manteca drive the local economy.

There have been some suggestions that Manteca place a tourniquet on new housing construction in a bid to pump up the value of existing homes. The people who would be thrown out of work might disagree with the need for them to make a financial sacrifice so someone else might get a couple more bucks when they sell their home. There is also a fallacy someone positioned in today’s economy to pay $150,000 more on average for a new home than an existing home in Manteca would even consider a resale for a wide variety of reasons.

That said, the real issues with foreclosures are not simply how the property is kept up once it is in default in terms of securing homes and keeping yards up but in what happens after it is sold.

There has been one heck of a lot of investors – first-time and otherwise – buying foreclosed homes. And the truth is you can make more money even if the house isn’t rented for a full year investing in a foreclose than sitting in the bank.

There is now a surplus of homes for rent. The vacancy rate isn’t the one percent or less of the boom times. Landlords in recent years have been getting more lax on the screening process of tenants and neighborhoods – and ultimately – the community will pay the price.

What this has to do with gangs, crime, and public safety is painfully obvious although it is considered too impolite to talk about it. Manteca Police Captain John Orcutt a few months back noted some of the foreclosed homes referred to as McMansions were all cash buyers from rougher areas of the Bay Area where homes including neighborhoods were being snapped up at ridiculous high prices. Those households moved east, bought new homes and had cash to play with thanks to the zero down and low payment loan pancakes.

We have a gang problem before but that just made it worse. If you doubt that some of the most heinous gang attacks up until a few months ago were in the neighborhood of McMansions near Joshua Cowell School that once fetched $700,000.

That isn’t pinning all of the crime on imported gang members but it certainly doesn’t help. Again, the vast majority of people who have moved to Manteca over the past decade or so are law-abiding decent people. It’s just that the liar loan driven housing market made it possible for others who couldn’t otherwise qualify to move east as well.

The city needs to ramp up its property enforcement provisions treating landlords for what they are – business people. They are making money off renting to people. As such, they need to be held responsible for the problems their businesses via tenants bring to a neighborhood whether it is crimes, major nuisances or horrendous property upkeep.

Holding landlords responsible for such actions by forcing them to evict undesirables is a reasonable regulation of business.

If we simply equate crime as a problem of not having enough cops on the streets, we’re setting ourselves up for long-term failure. Peace officers are important. But they can’t do as effective a job as possible if we as a community – including its leaders and wannabe leaders – don’t step up and start making real tough decisions that may rile landlords but in the end will reduce the potential for crime and gang activity to grow.
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