What a Waste: New Homes Demolished by Bank

Here on this blog, there's a lot of talk about waste: How not to waste food, old electronics, energy, and more. But this story about waste may be the most egregious - a bank has decided to demolish new homes in Victorville, Calif. because it was cheaper than selling them in this market. As my colleague Luke Mullins pointed out, it's a sign of just how bad the housing market has gotten. It's also a troubling example of our American culture of disposability.

Says the Wall Street Journal:

Demolishing vacant houses in economically troubled, inner-city neighborhoods is common. But the demolitions in Victorville show how the housing market is weighing on lenders even in once-booming suburbs. The houses were built by a California developer less than two years ago, according to city records.

Because the homes were vacant, squatters had moved in, and the bank says that they tore them down for safety reasons. The demolition was estimated to have cost $100,000. Appliances were removed from the house before the demolition (either by the workers, or by vandals - the article doesn't say). Fortunately, some of the wood will be reused for construction projects in Mexico, while the rest will be ground up for mulch. You can watch the demolition crew move in here:

 

More from U.S. News:

Environmentalists' Vocabulary Problem
National Mall to Get Recycling Program
Which Cities are a Breath of Fresh Air?

Comments

[wlkcrk]

Why don't they publish the name of the bank who did this so we can avoid that bank??????­??????????­????? After tearing them down with a backhoe, there will be nothing that can be re-used. All the lumber will be destroyed and not good for anything. So it will not be recycled!!!!!

[research]

We gave money to the Banksters so they could destroy homes?

While millions become homeless?

God Help us.

[sc300nc]

Once the squatters get in there and demolish the places, urinating and deficating on the plywood floors, ripping out anything valuable so they can sell it for scrap, the houses are doomed. It then costs more to rehab these homes than to do what they are doing.

Which neighborhood is next?

[Egalitare]

We're in new territory now: McMansion Renewal.

[classicalgeek]

Perhaps at least the nearby neighbourhoods can convert that space into organic urban farms.

[montestruc]

I expect that the banks are demolishing them because of the possible liability cost of squatters being injured in those houses.

I imagine that it might have been more practical to rent them but if the rental market is down too enough that it does not cover insurance , then, ,

The other thing is that they may get a big fact tax write off by doing that. If you change the tax code to prevent that you might stop that.

[jsanti7]

They do it because they can Never have more public wealth been thrown to banks and have to answer to know one. Shock doctrine done flawlessly . why not give it to the D.A.V or modify them for California s Soldiers returning with injuries or older folks with out homes ....no its just redistribution of wealth amongst the wealthiest ...if the people raise a voice its called socialism just think 11 trillion to the banks 1 trillion to the infrastructure and getting the economy going.

[FogBelter]

Maura, I would define this as desperation on the Bank's part. It is obvious to anyone with some cognitive reasoning skills that the goal of the Bank is not to provide safe neighborhoods for other homeowners in proximity of the vacant homes, but to try and bring Real Estate prices back by destroying unused capacity ... and, it's not going to work.

If we look at the massive financial crisis, at the heart of it is worthless paper. The foundation point of this worthless paper was, in many cases, mortgages irresponsibly written to individuals who weren't qualified for homes that were artificially inflated in value because of the availability of easy credit. Why destroying houses to create a false bottom won't work is that easy credit dried up, wages are stagnant, unemployment is up, and the properties were never worth as much as they were paid for at the top of the market to start with. It was all fraud. If the Banks think by reducing capacity the can force property values to rise in a deep recession, if not depression they are in a fantasy world. And honestly, what will be the impact of on the remaining homeowner's property values to have their homes surrounded by overgrown, empty lots?

I'd say the Banks that are resorting to this should prepare themselves for receivership and stop pretending they have an answer to their catastrophic situation.

[Republicnotademocracy]

Hear, hear, Fogbelter!

[ron071]

The bank will profit from the demolition by writing off the " loss" and the cost of the demolition. No need to fret about the bank.