Razing Hell: New-Home Demolitions in the California Desert
What a world! A demo home is not just about new houses that demonstrate performance and noteworthy features.
New-home demos now include a batch of bank-owned distressed properties that banks are giving a thumbs down. Demolished.
Here’s a lurid video clip of California’s hell razers, making the rounds on the blogosphere [Copied off Calculated Risk]. Patrick Duffy’s Housing Chronicles blog asks “Is this really the best way to handle the problem?”
Matthews Homes is the home builder. Guaranty Bank of Irvine, CA, took possession of the project through foreclosure, and now wants out, as the bank was getting slapped with fines for improper maintenance of the properties.
Here’s a lift from Victorville, CA. Daily Press reporter Patrick Thatch:
Victorville- 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 we’ve already taken a huge hit on and lost a lot of money, or, we tear down the houses, Smith said.
He said the builder put up the homes before completing the site improvements and failed to have enough money to finish roads, walls, and other improvements that bring the community into code. Everything just fell apart at that point and we cant sell homes that are not up to code, Smith said.
He said the city of Victorville fined the bank once because the home are out of code and would have faced daily fines if Guaranty didn’t do something with the vacant houses.
There are still substantial dollars that need to be put into the land before the city of Victorville will give certificates of occupancy on the houses and the bank isn’t willing to put forward that amount of money, Smith said.
He said the homes are a liability to Guaranty and that all of them are heavily vandalized inside and out with broken glass everywhere. Our projections are that those houses would sit the way they are for at least five years, what would they be worth then? Smith said. He said once the homes are demolished the property will be put on the market again. Calls to the developer were not returned.