Grim Repo

We certainly weren’t alone in our quest. The foreclosure economy is booming. Repo tour operations have launched all across the US. The Internet is clogged with listings of bank-owned homes and “distressed sales.” This may seem a tad predatory, but boosters insist the repo economy is a force for good. Cesar Dias, founder of the Repo Home Tour, told me he and Espino were helping to heal America’s wounded neighbourhoods. It was a heartwarming idea, but as we barrelled through the burbs I began to wonder if the repo economy reflected a simple market correction, or a complete meltdown of the systems that have charged the growth of North American cities for half a century.

My fellow repo tourists were regular folks — a rainbow of races and ages. There was Liz, a stock analyst from New York who flew in to troll for deals after hearing about Stockton’s woes on TV. There was Jerry the retiree, looking for his third rental property. There were young families with bawling babies. A few tourists were looking to make a home here, but most wouldn’t dream of it. (“Are you kidding? I’d never take on this commute,” Liz told me.) The edge of the sprawlscape wasn’t a place to live. It was barely a place at all. It was a commodity to be bought low, then sold on the high tide of a rebounding economy.

Take Terry and Sarah Lane, who trailed the Repo Bus in their dusty Subaru Outback. Terry was a chemistry teacher at Lincoln High in Stockton. Sarah was a nurse who commuted to a hospital in the Bay Area three times a week. Neither of them liked the idea of working full time, and real estate was their ticket to freedom. Terry pulled out the baby seat from the crumb-crusted back bench of the Subaru so I could join them. As we followed the convoy north toward Spanos Park, Sarah munched on a Nutri-Grain bar and explained their strategy.

“Look,” she said, pointing out the window. “You can tell the foreclosed homes because the lawn is brown instead of green. The house is kind of dirty, cobwebby. That’s the kind of house we want.” Back in the heady days of double-digit price gains, Terry and Sarah bought a fourplex in town and sold it after four years, for a $274,000 profit. After Hurricane Katrina hit, they bought a condo in Mississippi, which they rented to a hurricane returnee. But there’s never been a better time to snap up deals than now, Sarah told me as we pushed our way into 3131 Autumn Chase Circle.

“Of course, we feel horrible for the people who got caught in the crash,” said Terry.

“We want to flip two houses a year,” Sarah cut in, scanning the foyer. “Look at this place. I love the staircase. I love the wood banisters. The foreclosure price is two eighty-five. We could sell it on the market in a few months for four hundred — easy.”

Most of the buyers, and their agents, seemed to have no problem decoupling their aspirations from the tragedies of the homeowners who went before them. They were players — and true believers — in the free market. It was as if they were atomized pieces of a system that required nothing more than greed to slosh its way back to equilibrium. “We’re doing the community a favour,” declared the fast-talking Dias. And when I asked him about the people who had lost the homes he was selling: “We don’t know. We’re just moving the inventory.”

This is an attractive world view, especially because it imbues the market with a seemingly magical quality that systems theorists call “emergence.” Think of a flock of birds in flight. By following simple, instinctive rules, thousands of starlings can form a flock that arcs, veers, and dives in tight formation without collisions. Or consider ants, which develop a sophisticated colony architecture with no architect, no command authority. A multiplicity of players, all responding independently to layers of stimulus and feedback with no consideration of the whole. Yet the whole does have order.

But can the seemingly emergent mind of the market really resolve the foreclosure crisis? It would be reassuring to think that the interventions of thousands of selfish buyers could patch the holes in America’s neighbourhoods. It would certainly add a righteous note to our hunt for hot deals. Unfortunately, this faith ignores the system dynamics of the city itself.

Urbanist Jane Jacobs used systems theory to show how cities organize themselves. In her seminal 1961 book The Death and Life of Great American Cities, she insisted that vibrant, safe, rational places emerged not from central planning, but from the multitude of interactions between people on sidewalks. Great cities were ordered not from the top down, but from the bottom up. Given enough time walking around and making choices about where to eat, shop, live, and play, people determined the optimal shape of the city. Technology critic Steven Johnson would later point out that Jacobs was talking about a system not unlike an ant colony, where ants organize themselves and their colony over time, partly by bumping into each other. Emergence.