Underwater in Arizona

Who needs farming communities anyways? That water is much better spent on grass. Yep, let's landscape the desert. We'd better keep producing at least three children per woman, though, if we're going to fill up all these monster homes packed in like sardines.

watering the desert to make big grass lawns is the stupidest idea ever.

What a lousy situation. We 're even robbed of schadenfreude. Those of us who didn't have the poor judgment to sign up for mortgages we couldn't afford or make mortgages that others couldn't afford, those of us who didn't participate in the housing bubble, didn't flip houses, just carefully managed our finances ought to be able to say, well shucks, what did you expect? Instead so much bad judgment by so many lenders and buyers is taking everybody down even those who were careful the whole time and didn't make a dime on the upside.

What's the moral?

The NYT article captures the true devistation unleashed by developers these days.

Its more than 'watering the desert.' Its the total disregard for responsible growth. Developers throw down as many homes as possible without worrying about upgrading the existing infrastructure (you know, important things like schools, police and fire stations, sewers, etc).

And what of the social impact of these exurbs? Money quote from the NYT article:
“Here you have to have someone drive you 45 minutes just to
do something on the weekend, and everyone falls asleep on
the way there...In Illinois, you could get home and walk
anywhere you wanted to go — to the corner store or up the
street to the YMCA. The mall was two blocks away.”
Good idea, lets create an artificial oasis in the middle of the desert that requires the population to drive everywhere (in their Suburbans no doubt).

Maricopa county is where the sheriff is housing inmates in tents in the desert sun due to the budget. You'd think they had the tax base to build a jail...

Jon K, good but sad point.

When you get right down to it, after you strip away all the technology and politics, it's a sink or swim life. At the core it always has been, and at the core it always will be.

So when technology and politics operate like a web of chains instead of a fleet of lifeboats, it shouldn't be too surprising - we'll all end up dragged to the bottom.

To me, the moral couldn't be more obvious: the chains have gotta go.

The article barely mentions environmental issues, so it's a bit of stretch to try to pin the mortgage meltdown on lack of sustainability. Now, at root, the lack of concern for underlying health is the same. The article simply notes the prior uses and character of the land, and developer's disinclination to invest in proper infrastructure of nearly any sort.

The development was built on cheap land with cheap labor. It was a get rich quick scheme for everyone involved. Now the small fish are getting fried. If they'd sold a year earlier, they'd have thought they were geniuses, instead of just lucky.

I am fascinated by the terms of the mortgages and the behavior of the banks that's causing a problem to metastasize into a catastrophe. It would be far better to keep mortgages at the earlier rates, delay the rate run ups, not to reevaluate the houses to highlight declining values, not to foreclose and evict people who will pay something and maintain the houses.

Instead, we have a lot of poorly built houses being trashed and left vacant while their value continues to decline. Lots of people now get to lose vastly more money and the societal pain is magnified.

But I have to say, I don't understand the story line that goes:
'The value of my house has dropped in the last year, so I'm not going to try to pay the mortgage or hold onto the house. I'll just throw it all away and move on." Your car will never be worth as much as on the day you bought it, but you don't torch the car when it needs cleaning. Your stocks might decline in value, but you expect the market to recover, and sooner or later those stocks will rise in value again.

Houses are the same. They may have declined in value now, but they'll likely be more expensive in the future. The smart play is to hold tight and wait for the market to come around again. Don't sell your cyclical assets at the bottom of a trough.

Maybe the moral of the story, is that there are a lot of people who bought houses who had no business doing so. They were uneducated, got terrible advice, signed mortgages that put them in a very difficult position, and they got whipsawed by the market without any reserves to draw on. It's not like these homeowners are getting much help to keep these houses or to transition well.

But the deserts of Phoenix are one f the worst places on the planet to try to build up a gigantic city. You think Atlanta has water problems!

Great story, if sad. This is the reason we have building codes. In rural areas, they're usually steamrolled over, but in more urban areas like LA, the city fathers force the developers to provide the schools, infrastructure, roads, and guarantee the water supply. If things get bad, some of these houses will be uninhabitable, because it costs money, and takes fuel, to supply water.

Looks like they need to read the book "Food not Lawns". Maybe green grass in the desert a wasteful mirage? The fastest growing sport in the US is Frisbee Golf unlike old school golf no water required.

@ jon 2:26 PM
The reason they are defaulting on their payments is that they had adjustable rate mortgages. This let them base their budget on an artificially low mortgage payment. Then at a given time in the future i.e. 12-15 months, the rate went up and they suddenly were living 2-3 times beyond there means. They voluntarily put themselves in this position and had to lie to themselves, their realtors, their mortgages brokers, etc, who all in turn lied to themselves and each other that they didn't see it coming. A common rationale was "i'll just refinance it again when the ARM resets," however, by that time the refinance value was a small fraction of what they owed.

The whole thing is a marriage of naiveté, deception, self-deception and manipulation. I don't think any of the parties involved are innocent; only some were more ignorant than malevolent and some were more malevolent than ignorant.

The balatant disregard for enviromental impact and lack of planning for infrastructure and H20, etc is a separate issue of equally fraudulent proportions.

@ John
The town of Maricopa is in Pinal county, adjacent to Maricopa County

Watch:

I somewhat aggree. There MUST be a limit to the amount of stupidity that can be forgiven. America used to be a meritocracy, and there used to be a penalty for idiotic choices, It seems no more to be the case. This idiocy extends to the government, who has bankrupted the nation and put the dollar on a fire sale.

I did poorly in economics, and only took one semester, but I was awake enough to learn what a bubble was. I hear now they teach year-long macroeconomics in high school, maybe if we inculcate the youth in sound thinking, they can avoid the mistakes their stupid parents made.

Maricopa residents are being financially devastated by the foreclosure crisis there. Property values have plummeted and the myriad of real estate signs that line the streets promise greater financial loss. All of this in a city with few stores and a city hall situated in a trailer.