I was walking through the Kankakee Daily-Journal offices during a visit with friends in Illinois back in 1989.
The Daily-Journal was owned by the Small family which also owned the Press-Tribune where I worked in Roseville at the time. Both cities were major marshaling yards for railroads - Roseville for the then Southern Pacific and Kankakee for the Illinois Central. And both had about 60,000 residents in 1989. That’s where the similarities ended.
The managing editor of the paper - Mark Gipson - stopped me in the hallway as I was passing through production. He had a copy of a recent Press-Tribune in his hands.
Why, he asked, did we bury on inside pages stories on a 35-home subdivision being proposed and the opening of a Raley’s anchoring a small shopping center in nearby Auburn?
I replied that subdivision was small potatoes. In the six communities we covered - Roseville, Lincoln, Rocklin, Granite Bay, the Loomis Basin and Citrus Heights - the big non-infill subdivisions repeatedly made the front page as they passed through the planning process. I noted most were 200 to 400 homes but we had several in the planning process that had anywhere from 1,000 to 7,000 homes proposed including Del Webb communities, Stanford Ranch and a slew of others.
As for the shopping center, I explained it was outside of our circulation area and questionable whether we should have run it all. But I did point out we had at least three stories on an average week of a new store or small retail center being proposed or opened plus were covering the ongoing battle between Roseville and Rocklin to secure the regional mall site that since has become Northern California’s largest mall - The Galleria.
Gipson looked at me as if I had just stepped off a flying saucer.
He picked up that day’s Daily-Journal and pointed to the story bannered across the front page. It was a story about how Kankakee had just issued its first permit for a new home in six months.
I was stunned. Lincoln, which was the smallest city in our circulation area, was issuing an average of one permit a week for new homes. It was considered the most anemic place in the South County for home building at the time.
That encounter made me realize that when it comes to true recessions, Californians don’t know how lucky they have it.
Don’t get me wrong. If you lose a job in an economic downturn, it is definitely devastating. And if things aren’t going well for you it doesn’t matter how upbeat economic gurus are about economic indicators. And yes, this downturn has been particularly brutal on the Golden State.
But as a whole, California has been fairly resilient to the impacts of downturns.
What is playing out right now is the natural order of things in a capitalistic economy. The housing bubble was allowed to expand way too long by artificial means such as falsifying income and the Ex-Lax treatment given to lending standards. The worst byproduct was foreclosures - but with a twist.
People across the board -renters in homes investors bought to flip - and home buyers themselves were in houses that they weren’t paying the market price. The “homeowners” lost out when the intro rates adjusted upward hiking monthly mortgage payments by more than $1,500 a month in many cases. The renters were getting cheap rent that went away when flipped ended when home prices dropped.
In both cases, the housing they occupied as owners or renters was more than they could realistically afford. They could have not bought or rented them without the help of liar loans and a near hysteria stampede to jump on the most dangerous economic ride of them all - hyped speculation.
Once we get past the housing debacle many experts expect a return to the more sane economic times of 20 and 30 years ago.
And when you compare that against other parts of the country, we will end up doing OK. If you don’t believe that, drop by Kankakee some time.
The Daily-Journal was owned by the Small family which also owned the Press-Tribune where I worked in Roseville at the time. Both cities were major marshaling yards for railroads - Roseville for the then Southern Pacific and Kankakee for the Illinois Central. And both had about 60,000 residents in 1989. That’s where the similarities ended.
The managing editor of the paper - Mark Gipson - stopped me in the hallway as I was passing through production. He had a copy of a recent Press-Tribune in his hands.
Why, he asked, did we bury on inside pages stories on a 35-home subdivision being proposed and the opening of a Raley’s anchoring a small shopping center in nearby Auburn?
I replied that subdivision was small potatoes. In the six communities we covered - Roseville, Lincoln, Rocklin, Granite Bay, the Loomis Basin and Citrus Heights - the big non-infill subdivisions repeatedly made the front page as they passed through the planning process. I noted most were 200 to 400 homes but we had several in the planning process that had anywhere from 1,000 to 7,000 homes proposed including Del Webb communities, Stanford Ranch and a slew of others.
As for the shopping center, I explained it was outside of our circulation area and questionable whether we should have run it all. But I did point out we had at least three stories on an average week of a new store or small retail center being proposed or opened plus were covering the ongoing battle between Roseville and Rocklin to secure the regional mall site that since has become Northern California’s largest mall - The Galleria.
Gipson looked at me as if I had just stepped off a flying saucer.
He picked up that day’s Daily-Journal and pointed to the story bannered across the front page. It was a story about how Kankakee had just issued its first permit for a new home in six months.
I was stunned. Lincoln, which was the smallest city in our circulation area, was issuing an average of one permit a week for new homes. It was considered the most anemic place in the South County for home building at the time.
That encounter made me realize that when it comes to true recessions, Californians don’t know how lucky they have it.
Don’t get me wrong. If you lose a job in an economic downturn, it is definitely devastating. And if things aren’t going well for you it doesn’t matter how upbeat economic gurus are about economic indicators. And yes, this downturn has been particularly brutal on the Golden State.
But as a whole, California has been fairly resilient to the impacts of downturns.
What is playing out right now is the natural order of things in a capitalistic economy. The housing bubble was allowed to expand way too long by artificial means such as falsifying income and the Ex-Lax treatment given to lending standards. The worst byproduct was foreclosures - but with a twist.
People across the board -renters in homes investors bought to flip - and home buyers themselves were in houses that they weren’t paying the market price. The “homeowners” lost out when the intro rates adjusted upward hiking monthly mortgage payments by more than $1,500 a month in many cases. The renters were getting cheap rent that went away when flipped ended when home prices dropped.
In both cases, the housing they occupied as owners or renters was more than they could realistically afford. They could have not bought or rented them without the help of liar loans and a near hysteria stampede to jump on the most dangerous economic ride of them all - hyped speculation.
Once we get past the housing debacle many experts expect a return to the more sane economic times of 20 and 30 years ago.
And when you compare that against other parts of the country, we will end up doing OK. If you don’t believe that, drop by Kankakee some time.
