By now, most of the public has heard the newsflash that the American dream of homeownership effectively crashed and burned into a sizzling mess of foreclosures, managing to take down some illustrious financial institutions with it. Alyssa Katz, an experienced journalist and writer on urban issues as former editor-in-chief at City Limits magazine and a contributor to dozens others, offers up a dizzying and vigorous account of our national tale of woe in her recent book, Our Lot: How Real Estate Came to Own Us. Her version shoves as much to the fore as will reasonably (and sometimes not-so reasonably) fit, while still remaining within the bounds of readability for those less well-versed in the complexities of credit default swaps and financial product regulations.
How does she convert these complexities of complexities into a coherent account? She hops and skips between decades and locales, beginning in 1972 Chicago, revisiting a mortgage disaster that looks eerily similar to today. Loans given to every home-desiring Tom, Dick, and Harry, sometimes under duplicitous circumstances, other times chalked up to plain stupidity. Brokers falsifying client information, speculators flipping houses right and left, and first-time buyers getting in way over their heads. Sure, the market for mortgage-backed securities might have been brand new in ’72, but the hallmarks of today’s crisis were alive and well: lending beyond any rational limits, and the “basest of crimes and most foolish of gambles…insulated from almost any scrutiny until the damage was already done.”
Katz is at her strongest describing the knotted relationship between the politics of homeownership and the forces of Wall Street. “How did a nation forget this?” Katz implores, as she reminds us of the 1920s real estate boom that similarly led to thousands of foreclosures in the 1930s. Herbert Hoover—then secretary of commerce—insisted that owning a home would inspire the energy of the citizenry and could be undertaken by all. FDR turned to home ownership programs to jump-start the economy during the Great Depression, Congress used it in the 1960s as a front in the War on Poverty. Eventually, the homeownership crusade mixed with de-regulation of the private sector and their own insatiable need for higher profits and increased risk, creating a deadly cocktail.
Katz has an impressive glut of information to negotiate here, which she manages adeptly. Still, some chapters read like overwhelming laundry lists of speculation and mortgage fraud. Subprime Time, on the other hand, is a surprisingly concise and readable chapter, exploring the origins and absurdities of that hairy beast, the subprime loan. It’s when Katz turns to her own housing meltdown that she loses focus, obscuring her chapter on New York by frustration and bitterness. After the state disastrously rewrote its rent laws, Katz’s apartment building on Court Street went through a “condominium conversion,” forcing her to either move out or buy her apartment. She buys “a co-op miles deeper into Brooklyn, far from anyone we knew or anyplace we worked but at a price that would keep our monthly housing costs the same.” Katz was granted a ticket to this Brooklyn Siberia thanks to a $250,000 loan from Wells Fargo, even though she was living on a fellowship paying $23,000 per year at the time.
Before moving, Katz became president of her tenants association, transforming into the very kind of activist that she is quick-tongued with earlier in the book, when she describes Gale Cincotta and her band of housing activists as “pushy capitalist radicals” who “waddled” into Washington with demands. Katz’s band of “creative professionals”—a magazine editor, graphic designer, wedding photographer– “these were the people who made the city what it is, by being willing to put up with a loud, smelly, grim, and fringey neighborhood.” Well, kinda. Her argument seems to rest on the notion that they deserve affordable rents and housing security because of their crucial contributions to the city’s fabric, not because they worked to make the neighborhood less smelly, or even because stable housing should be a right for all, be you a grocer or an I-banker.
Katz otherwise succeeds in detailing the complicit cogs in the wheel that is our housing boom and bust: buyers, flippers, mortgage brokers, lenders, adjusters, bankers, securities firms. Some were rolling in the dough, while others were merely doing their jobs, or dreaming their immigrant dreams. Katz generally goes to great pains to spread the blame evenly, but occasionally points a clear finger: “In hindsight, the scheme was mind-blowingly naïve—a vestige of a more innocent time not long ago when it was possible to believe that the fixed-income managers of Lehman Brothers and cashiers who couldn’t even save for a down payment would both profit by doing business together—on terms set by one side, infinitely wealthier and more powerful than its partner.” Innocent? Given that this recap comes in the Epilogue of Our Lot, we’ve read enough to know that she’s being generous.
Our Lot: How Real Estate Came to Own Us. By Alyssa Katz. 288 pages. Bloomsbury USA. $26.
Hillary Miller
Hillary Miller is a writer from Flatbush, Brooklyn. She teaches at Baruch College and is a doctoral candidate in Theatre at the City University of New York Graduate Center, focusing on performance and urbanization in post-World War II New York City. ...
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