More Evidence of a Wasteland of Unfinished Housing Projects
The Los Angeles Times takes a close look at a problem TWI detailed Tuesday in a piece about neglected bank-owned property. Some of that property, as we explained, includes half-built housing developments, where construction was halted when the mortgage market went bust. Those developments are called PVC farms, after the PVC sewer pipes that stick out of the ground. You can see PVC farms in the Washington area in places like southern Prince George’s County, Md., and Prince William County, in the outer suburbs of Virginia. Usually you’ll see advertisements for the housing that was never built (The St. James Estates – homes from the $700,000s!) and colorful flags, but no houses.
In Los Angeles, however, PVC farms and abandoned developments are more than an eyesore — they’ve become an epidemic, according to The Times.
Nearly 250 residential developments with a combined total of 9,389 houses and condominiums have been halted in California, according to research firm Hanley Wood Market Intelligence. The units, worth close to $3.5 billion, were in various stages of development.
Now, many are in bankruptcy or have been foreclosed by lenders. Developers have halted sales on an additional 370 new-home developments — about 30,000 units worth $11.9 billion.
“It’s a sad state of affairs,” said Greg Doyle, regional director of Hanley Wood.
And what happens to those abandoned developments?
By day, it’s far too quiet at the site of a planned housing and retail development on a former Navy base in Oakland.At night, neighbors can hear the thieves come out.
They rip out copper wire, haul away pipes and take anything else they can steal from dozens of buildings on the site, abandoned after Irvine developer SunCal Cos. fell victim to the economy.
It’s a scene not uncommon throughout California, as residential construction grinds to a halt under the dual weight of the credit crunch and the housing crisis: a rusty chain the only barrier between the community and a half-built structure in Hollywood; a bare dirt lot in Pasadena; old stoves amid the trash at the site in Oakland.
An interesting twist is that one developer of an unfinished project is suing Lehman Bros., contending funds for building the houses were cut off when Lehman declared its bankruptcy. The investment firm hoarded billions of dollars in cash, the suit contends, while the project it was supposed to fund failed.
Lehman filed a motion to dismiss the suit. A legal battle could drag on for years. In the meantime, as we reported, neighbors surrounding those half-built developments in California and around the nation endure the trash and vandalism that results, while banks and developers walk away.