Fighting poverty and leveraging greed

BRADENTON, LAKELAND and FORT MYERS, Fla.-Late-March sights and sounds from two Florida fixations-spring training baseball and a popped housing bubble:

Boston Red Sox second baseman Dustin Pedroia to an autograph-seeking fan: "Just a minute, ma'am. We're working. Trying to become a better team."

Fort Myers columnist Sam Cook: "The stadium . . . is an exercise in excess for Boston officials who leveraged their greed."

Pittsburgh Pirates fan in Bradenton: "Eighteen straight losing seasons, but we have some good young players this year."

Bradenton Herald reporter Duane Marsteller: "Rampant speculation by builders, developers and buyers . . . relaxed lending standards . . . a blind eye to fraud."

Song over public address system during batting practice: "I don't care too much for money. Money can't buy me love."

Red Sox outfielder J.D. Drew: "When fans scream at me, I play hymns in my head. You want an example? 'Jesus, Lover of My Soul.'"

U.S. Census Bureau announcement: 18 percent (1.6 million) of Florida's homes are sitting vacant.

Man on Lakeland road holding a sign: "If each driver donates $1, you can save my home."

Painting on Larry's Pawn Shop in Fort Myers: A person with a big smile, dancing for joy, clutching two dollars and dropping four.

Detroit Tigers coach in Lakeland telling his players: "If you've got an off-on switch, turn it on."

Fans are optimistic as a baseball season begins, but housing experts remain skeptical about the Obama administration's ability to flip a switch and reverse the national slide in home values. Florida, which was a sunshine U.S. real estate market five years ago, remains in the shade. Its 18 percent vacancy rate is the worst in the country, with Arizona running a close second at 16 percent, and Nevada at 14 percent.

High vacancy rates like those push down housing prices and often leave homeowners who purchased properties from 2002 to 2007 "underwater"-owing more on their mortgage than their houses are worth. According to the Florida Association of Realtors, the median price for homes sold in January was $122,000-a 7 percent drop from a year ago and less than half the price at the market's peak.

On April 2 RealtyTrac noted nationally the existence of 1.9 million foreclosed homes-all putting downward pressure on real estate values. The five states with the most foreclosures were California (348,652), Florida (265,088), Arizona (101,337), Michigan (94,705), and Georgia (83,569). The typical foreclosure was a three-bedroom home that had sold for almost $250,000; marketed after foreclosure, such homes are selling for an average of $166,000.

The number of foreclosures signaled declining home values for the middle class. According to realtor.org, the median price of existing home sales continued to decline from a high of about $230,000 in 2007 to about $160,000 in February 2011. But the price decline, averaging 5 percent from 12 months earlier, was not uniform across the board, and the value of low-end and high-end homes increased:

• Prices of homes selling for less than $100,000 rose by 8 percent.

• Prices of homes selling for over $1 million were up 4 percent.

• The selling price of homes in the $250,000-500,000 range was down 4 percent.

• The biggest price decline came among homes selling for $100,000-250,000: Down 8 percent.

The bad news for middle-class homeowners, though, is good news for home purchasers. In hard-hit Lee County (Fort Myers and vicinity) on the Gulf coast, a 30 percent vacancy rate means that first-time homebuyers can buy houses that a few years ago were only dreams for them.

Eddie Felton, executive director of the Home Ownership Resource Center of Lee County, says government officials should not give "underwater" owners whatever it takes so that they can stay in their homes. Instead, he "triages" homeowners and helps those in the bottom third to get out of their homes quickly so a family that's a better economic match can get in.

WORLD subscribers might remember Felton ("Ghost streets," Feb. 27, 2010), who described for me suburban ghost towns, blocks with abandoned homes purchased several years ago for $250,000-300,000-three times what they sell for now, if they sell at all.

Felton, a 26-year Navy veteran, frankly criticized the way President Obama "gets up on TV and says his program will help people stay in their homes. It won't. . . . He can't come through without wrecking the whole system. Seems to me, if you can't produce, don't give people false hopes."

After our article, the News-Press-Fort Myers' daily newspaper-named Felton one of its six "Heroes of 2010" for the way he has "helped more than 1,900 people work out a deal that will allow them to stay in their homes or leave their homes in a way that least harms their credit."

Felton became a hero not by being nice to homeowners but by being truthful. Here's some of what he says directly to those who come to his nonprofit with their homes underwater:

"You don't have income. You can't afford this home. You have to consider moving out, and moving in with someone."

"I won't sugarcoat it for you. You can't afford to be in this house. You've got to find an inexpensive rental."

"For one whole week, get a receipt for everything you buy. Put in a paper bag. At the end of the week go through every receipt: Ask yourself, 'Did I buy this because I needed it or because I wanted it?'"

"Can you increase your income by renting out one of your rooms?"

"Let's make sure you can afford to make these payments."

"Don't use money for that Xbox."

"Prioritize home and food. Remember, an auto is not a necessity. If you have to, learn to take the bus."

Felton also delivers good news. When a homeowner has reasonable hope of being able to make his monthly payments, but may not be able to keep up in the short term, Felton will contact lending agencies and urge them to be flexible. He helps homeowners access government help when they can appropriately use it. Sometimes owners abashedly realize that they can economize and stay in their homes: "Do you need to ride around in this fancy car? You're driving a Mercedes-Benz and you have no money to make your house payments?"

But Felton does not believe his task is to keep people in their homes. The goal is match houses with the ability to pay for them. He's critical both of those who bought homes they couldn't afford and the lending institutions that far too easily gave them credit and adjustable rate mortgages: "A few years ago, if you could talk and breathe, you could get a house. These people had no reason being in those houses."

We drove around Lehigh Acres and Cape Coral, two of the hardest-hit communities, as we did the year before. I saw some 2,500-square-foot homes with two-story entries situated on quarter-acre lots now filled with weeds, some as high as an elephant's eye. I also saw a house that was desolate last year now with mown grass and a child's bicycle in front.

Felton himself lives in a single-story Cape Coral house that is underwater: Originally marketed by the builder at close to $200,000, Felton bought it for $120,000 in 2007 and thought it a bargain; now it's worth $80,000. Still, it's an immaculate three-bedroom with a swimming pool, a two-car garage, and an American flag in front, and he and his wife enjoy it. The problem is the mismatch, particularly with homes owned by people now among the long-term unemployed.

Felton sees problems in both individual beliefs and government actions. First, the personal: "People say we've learned from the housing bubble. I don't think so. . . . We say we're not going to eat out, but we do. If my pocketbook says 'nope,' maybe I won't. If it says 'maybe,' I will. . . . We're not going to change unless we have to." Most people, he says, were not frugal during good times so they had no cushion when joblessness struck.

The heart of the problem, he believes, is, "We are not a God-fearing people anymore. If people were going to church and being taught the necessities, we wouldn't be in this mess." A churchgoer, Felton says, "We have lots of churches without much teaching. . . . We have to go back to the basics: family, church, education. . . . For many men the trinity is women, alcohol, sports."

The second problem, he says, is government: raising taxes and embarking on grand projects instead of also emphasizing basics. Cape Coral is laying off police officers and firefighters, but the Lee County Board of Commissioners has now agreed to spend probably $80 million to build a new spring training complex for the Boston Red Sox. Felton asks, "How can you go out and build a stadium in this economy?" He also notes, "The old community is devastated."

The old community is a poor part of Fort Myers, one mile from downtown, with many one-bedroom, wood-frame, 1,000-square-foot houses. The old community in 1993 welcomed the Boston Red Sox to a beautiful new ballyard, City of Palms Park. The Fort Myers City Council had grabbed the Red Sox from their previous spring training home in Winter Haven, Fla., by taking 26 acres from Fort Myers owners via eminent domain, and razing more than 100 buildings. Taxpayers footed a $24 million bill, with $2 million in interest payments every year.

Eighteen years later, City of Palms Park is still in great shape, but the Red Sox threatened to move to Sarasota unless Lee County would build a new complex just south of the city limits with more seats and luxury boxes, and a configuration identical with Boston's Fenway Park, including a left field wall. The commissioners assented, and the Red Sox in late March played their last game in City of Palms.

Since most of the cash Fort Myers taxpayers have forked over for the ballpark has gone to paying interest, they still owe $18 million on a facility that will now be unused by any major league team. This led News-Press columnist Cook to declare, "If our trio of [county] commissioners had guts, they would have called Boston's bluff and said, 'It's City of Palms Park or nothing.'" But government bodies at all levels, like individuals, tend to look for big fixes rather than incremental improvements.

Red Sox officials defend their decision. Manager Terry Francona said the new ballpark "will be a really cool facility. All the fields in the same area. Outfielders learning all the Fenway angles. It will be great." But it's also great that the Detroit Tigers last month celebrated 75 years of spring training in Lakeland. Newly refurbished "Tigertown" is a bright spot in economically depressed Lakeland, along with a renovated downtown and a pretty campus for booming Southeastern University, an Assemblies of God college.

It's great as well that the Pittsburgh Pirates are staying in Bradenton's McKechnie Field, built in 1923 in the style of a Spanish mission: USA Today called McKechnie the "Fenway Park" of spring training ballparks. In 2008 the Pirates signed a new 30-year lease after the city installed lights and created new and expanded clubhouses.

The prospects of the Fort Myers neighborhood surrounding City of Palms Park are not great. But the Lee County Sports Authority, which manages City of Palms, says all is not lost. A spring break college baseball tournament is on the schedule for next March, and the park will have four months of amateur baseball tournaments forecast to bring in tourist dollars.

Those small gains may not be enough for Lee County commissioners, who are contemplating a plan to take another $36 million from taxpayers to transform the ballpark into an Olympic-caliber swimming facility that would bring in national events and allow the neighborhood to live happily ever after.

Since 1993 Edison Avenue in Fort Myers has had not only the ballpark but two other anchors. At the western end sits the laboratory and winter home of Thomas Alva Edison, the 19th- and early 20th-century inventor. Three months after he started school the schoolmaster kicked him out: Young Edison was disruptive, unfocused, and so out of control that nothing good would ever come of him.

That, of course, is not the end of the story. His mom homeschooled him. He never received any other formal education. He had read all the classics by the time he was 12. He received 1,093 U.S. patents in his lifetime, including at least one each year for 65 years-for incandescent electric lamps, phonographs, radios, and tattoo machines.

On the eastern half of Edison Avenue sits the other anchor, Dunbar High School and a vast array of small churches. Signs give a sense of economic reality: "Larry's Pawn Shop. E-Z Credit. We buy houses: CASH. Used Tires and Rims. Cash for Gold." What happens today to the many tattooed teens in classrooms who are disruptive, unfocused, and out of control?

Two sets of signs on Edison last month proposed hope of differing kinds for those kids. Those advertising "Florida's Future: 3-on-3 basketball tournament" suggested the popular alternative that provides a ticket out for one among thousands. Other signs were for the Dunbar Gospel Association. The Gospel can give a ticket out to anyone who is underwater.