Bo McCarver’s weekly news compilation, 5-31-2011

Tuesday Report, May 31, 2011

Special to the Texas Low Income Housing Information Service

Home prices continue to freefall as the backlog of unsold units rises and few buyers step in. Home ownership continues to decline; experts project the rates could reach those of the 1980s.

As goons rule Jaurez, residents flee. Many who stay are subjects of extortion and violence. The city is now 25 percent vacant.

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Galveston has hope for businesses hit by Ike

New city loan program could be a model for U.S.

By Harvey Rice        Houston Chronicle      May 29, 2011

GALVESTON — More than 2½ years after Hurricane Ike caused $300,000 in damage to his restaurant, Pete Quintanilla is finally on the verge of applying for disaster aid that could keep his business from going under.

Quintanilla’s restaurant is one of 140 on a waiting list for a program developed by the city of Galveston that state officials say could be a national model for assisting small businesses after disasters. If Quintanilla qualifies, the aid will come just in time for his Taco House Restaurant on Broadway Boulevard.

“I’m considering letting people go because I can’t even make payroll,” he said. “I had to delay paychecks.”

The Small Business Administration denied him a loan after the storm struck in September 2008, so Quintanilla turned to relatives and friends for money to repair storm damage. Saddled with debt and struggling to pay suppliers, he feared he would be forced out of business before the restaurant’s 50th anniversary in November.

The possibility of a loan has given him hope.

Full story at:

Flight brings plight: About 25% of Juárez homes sit empty, as residents flee drug war violence

By Alejandro Martínez-Cabrera          El Paso Times         May 23, 2011

JUAREZ — Most of the houses in Villas Residencial have no doors, no windowpanes, and graffiti covers graffiti on every wall. Everything that could be resold — electrical wiring, sewer lids, anything made out of copper — is gone.

Rows upon rows of houses have been abandoned in this housing project located on the southeast side of the city. People left because of the lack of security or the lack of work. The few who stayed have nowhere else to go.

“Back home, you either work at the mines or with the narcos,” said a maquiladora worker from Parral who preferred not to be identified.

About a quarter of the homes in Juárez are empty due to the massive exodus of people who have fled the current wave of violence, and the urban planning mistakes of the past. Now, the abandoned neighborhoods attract vandalism, breed new criminals, weigh down financially on the city and represent one of the biggest obstacles for its recovery.

Citywide, the number of people who have left Juárez in the last three years is about 230,000, according to one study.

Full story at:

Housing authority loses bid for $22 million federal grant

By Rhiannon Meyers        Corpus Christi Caller-Times       May 26, 2011

CORPUS CHRISTI — The Corpus Christi Housing Authority lost its third bid for $22 million in federal dollars to replace the sprawling 60-year-old La Armada public housing complexes.

The loss of the grant was a blow to agency officials who believed they were closer than ever to winning the highly competitive federal grant, which is aimed at replacing aging and dilapidated public housing.

“I’m disappointed obviously,” board Chairman Rocco Montesano said.

The U.S. Department of Housing and Urban Development awarded $152.7 million in grants to eight housing authorities nationwide. Thirty-six applied. Corpus Christi Housing Authority was the only agency in Texas to submit an application.

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Program for homeless alcoholics under renovation

By Andrea Ball       Austin American-Statesman        May 28, 2011

A local court program designed to get chronic alcoholics off downtown’s streets is being revamped after many of the people eligible for services refused help or relapsed after treatment.

Since 2006, Project Recovery has been providing residential treatment services to homeless people with multiple arrests for public intoxication. It was an effort designed to get people off the streets, out of jail and into permanent housing. The annual budget of $550,000 comes from the City of Austin and Travis County.

But the effort hit road bumps over the years, said County Court-at-Law Judge Nancy Hohengarten, who helped create the program.

Many of the people who qualified for Project Recovery refused to go and decided to stay in jail instead. Public intoxication convictions generally bring 10 to 20 days in jail, Hohengarten said.

Of the 200 people identified in 2004 as the most frequent offenders of public intoxication laws, only 37 went through the program. Narrow eligibility requirements — which were expanded last fall — prevented the court from offering the program to people accused of other nuisance crimes.

“I wasn’t having as many people come in,” said Hohengarten, who refers people to the program.

Full story at:

Home price index falls to double-dip in March: S&P

By Leah Schnurr       Reuters       May 31, 2011

NEW YORK – Single-family home prices dropped into double-dip territory in March as the housing market remained bogged down by inventory and weak demand, a closely watched survey said on Tuesday

Single-family home prices dropped into double-dip territory in March as the housing market remained bogged down by inventory and weak demand, a closely watched survey said on Tuesday.

The S&P/Case Shiller composite index of 20 metropolitan areas declined 0.2 percent in March from February on a seasonally adjusted basis, in line with economists’ expectations.

The price index was below the low seen in April 2009 during the financial crisis. The glut of houses for sale, foreclosures, tight credit and weak demand have kept the housing market on the ropes even as other areas of the economy start to recover.

The 20-city composite index was at 138.16, falling below the 2009 low of 139.26.

Full story at:

Housing Index Is Expected to Show a New Low in Prices

By David Streithfeld        New York Times       May 30, 2011

SAN FRANCISCO — The desire to own your own home, long a bedrock of the American Dream, is fast becoming a casualty of the worst housing downturn since the Great Depression.

Even as the economy began to fitfully recover in the last year, the percentage of homeowners dropped sharply to 66.4 percent from a peak of 69.2 percent in 2004. The ownership rate is now back to the level of 1998, and some housing experts say it could decline to the level of the 1980s or even earlier.

Disenchantment with real estate is bound to swell further on Tuesday when the most widely watched housing index is all but guaranteed to show prices of existing homes sank in March below the lows reached two years ago — until now the bottom of the housing crash. In February, the Standard & Poor’s/Case-Shiller index of 20 large cities slumped for the seventh month in a row.

Full story at:

Mortgage Companies Settle Suits on Military Foreclosures

By Diana Henriques         New York Times      May 27, 2011

Two mortgage servicing companies have agreed to settle federal complaints that they wrongfully foreclosed on the homes of at least 178 military service members and to set aside a minimum of $22 million to compensate those victims.

The Justice Department announced on Thursday that it had simultaneously filed and settled lawsuits against the two companies — a subsidiary of Bank of America formerly known as Countrywide Home Loans Servicing, and Saxon Mortgage Services, a subsidiary of Morgan Stanley.

The companies were accused of knowingly and repeatedly violating the Servicemembers Civil Relief Act, a federal law that extends an array of financial and legal protections to military personnel. Specifically, the companies were accused of ignoring a provision of the law that required them to get court orders before foreclosing on active-duty service members.

Without admitting wrongdoing, the former Countrywide unit agreed to pay $20 million to approximately 160 victims of illegal foreclosures from January 2006 to May 2009. It also agreed to reimburse victims of any other illegal military foreclosures found to have occurred from May 2009 to the end of last year.

Full story at:

Home deconstruction: Can an entire house be recycled?

Deconstruction of a home to reuse or resell its materials is gaining popularity as a more environment-friendly alternative to demolition. Sometimes it even saves money.

By David Conrads         Christian Science Monitor       May 25, 2011

Kansas City, Mo. — From Florida to Washington State, homeowners are discovering an environmentally friendly – and, increasingly, cheaper – alternative to demolition: home deconstruction.

This labor-intensive, job-creating approach takes unwanted buildings apart systematically and turns the pieces into new home construction or tax-deductible donations to nonprofit reuse centers, thus saving them from the landfill.

Construction and demolition debris take up more than one-third of landfill space annually, but on average, more than 60 percent of a house – and in some cases, more than 75 percent – could be reused or recycled, says Bradley Guy, who researches architecture and deconstruction at The Catholic University of America.

Full story at:

A man’s castle, under code enforcement siege

Alan Kimble Fahey’s 20,000-square-foot labyrinth of buildings, called Phonehenge West, in Acton is a 30-year labor of love. But county code enforcement officials want him to tear it down, so he’s going to trial.

By Ann M. Simmons         Los Angeles Times          May 26, 2011

Bargain land and wide-open spaces drew Alan Kimble Fahey to Acton. A modest ranch house on a desert lot offered the outpost he sought.

But then Fahey wanted to expand. So he began to build.

And build. And build.

Fahey built a barn and moved in. He traded his motorcycle for a trailer and painted it to look like a rail car. He bartered other possessions for a dump-truck load of rocks and a 60-foot workers’ lift. Then he sank 108 utility poles a dozen feet into the hard-packed Antelope Valley ground. Reinforced steel beams came next. A giant tower began creeping skyward. A wing sprouted off the tower. Then another.

Almost three decades later, Fahey, 59, a retired phone service technician, was still working on what is now a sprawling, 20,000-square-foot labyrinth of interconnected buildings he calls “Phonehenge West,” stopping only when he was forced to. (The site is not to be confused with Phonehenge, a configuration at a theme park near Myrtle Beach, S.C., featuring England’s famed red telephone booths.)

His structure, sitting on 1.7 acres, is set back from the street and slightly obscured by junipers and a eucalyptus. A dirt road leads in; Fahey uses a motorized cart to get around between his buildings. His closest neighbor is about 100 feet away.

Fahey’s creation is composed of a hodgepodge of reddish buildings. The tower, now 70 feet high, juts above pepper trees and is adorned with Italian stained-glass windows. A winding, French-inspired curved metal stairway meanders from the elevated barn to the ground. Bridges and ramps connect the buildings.

People come from all over to take pictures. Glamour magazine recently used the tower as the setting for one of its fashion spreads. Fahey hopes that Phonehenge West might one day be unearthed by archeologists, just like the English Stonehenge.

But Stonehenge’s creators presumably didn’t have to worry about building codes.

Full story at:,0,797986.story


Joplin Victims Offered Existing Homes

Associated Press        May 30, 2011

Some of the people left homeless by the Joplin tornado could be placed in rental homes nearly an hour’s drive away, and the Federal Emergency Management Agency said Monday it will consider bringing in trailers, as it did for New Orleans after Hurricane Katrina, if enough homes are not available.

FEMA’s first option for housing the thousands of displaced is to find them existing rental housing within a 55-mile radius of Joplin, because there isn’t much housing left in in the city of nearly 50,000 residents that was left badly damaged by the May 22 tornado, spokeswoman Susie Stonner told The Associated Press. Nearly a third of the city was damaged by the violent storm that left killed more than 130 people. Twenty-nine people remained unaccounted for Monday.

Stonner said that despite the distance, putting people in permanent housing is preferable to trailers especially in an area prone to tornadoes and severe weather.

Full story at:

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