How to solve the real estate crisis? Bulldoze brand-new but unwanted homes! This video documents bank-hired wrecking crews destroying model homes in a Southern Californiahousing development that never filled with homeowners, when the economy collapsed and the developer went bankrupt.
The bank involved was fined by the city for each day the homes sat unoccupied, so the bank paid to wreck all the homes. Snip from the local paper's account:
The housing collapse is taking a literal form for one bankrupt housing development. Four model homes and 12 nearly finished spec homes at Bear Valley Road and Highway 395 are being demolished.
The developer filed bankruptcy about 18 months ago and the foreclosed property went to Guaranty Bank in Irvine. A Guaranty Bank official, Real Estate Officer Dean Smith, said they were facing daily fines from the city of Victorville if they didnt do something with the homes and property that not up to code. He said it was a choice of pumping their own money into property site improvements and additional money to bring the home up to code or tear down the 16 homes.
Smith said the bank is not in the building or land development business and because of the current housing market does not see anything happening with the property for at least five years. Our only option is to either proceed with putting more than a million bucks into the land, which weve already taken a huge hit on and lost a lot of money, or, we tear down the houses, Smith said.
Update: A commenter points us to the related WSJ story.