New Homes Demolished in Victorville, CA (QUICK VIDEO)

calculatedriskblog.com ^ | 4/30/2009 08:49:00 PM | CalculatedRisk

[SouthernmostFreeper]

Hat tip to several - thanks! Note: Victorville is east of Los Angeles at the southern edge of the Mojave desert.

[SouthernmostFreeper]

Hat tip to several - thanks! Note: Victorville is east of Los Angeles at the southern edge of the Mojave desert.

[SouthernmostFreeper]

http://www.calculatedriskblog.com/2009/04/new-homes-demolished-in-victorville-ca.html

[hugorand]

I wonder what were the builders being fined for. Do they have to pay property taxes on unfinished homes?

[junta]

Two story in high desert, what an energy hog. Here in Northern Illinois you would be hard pressed to find a starter home being built, yesterday I counted 6 mansions going up and in various stages of completion. I guess those bank bailout billions do end up somewhere.

[shezza]

There is an entire series of this activity--the banks paying hundreds of thousands of dollars to raze to the ground brand new homes, so they can avoid paying the fines to the city. Sure, they couldn't get the original asking price of half a million, so drop the price. Slash the price. Get someone in there at a reasonable price and let THEM worry about the taxes and the utilities costs. The city will be happy (tax revenue), the builder will be happy (off his back), the bank will be happy (off their books, mortgage payments coming in regularly), the homeowner will be happy (a very nice house at a very nice price). Demolishing brand new homes is NOT the only solution to the problem. Check out this YouTube channel for more videos.

[Eagles2003]

“I wonder what were the builders being fined for. Do they have to pay property taxes on unfinished homes?”

I don’t know what they were being fined for, I’m nowhere near that lunatic state of CA.

Yes builders do have to pay property taxes. If you’ve ever bought a home you would know the taxes are pre-paid by the seller and pro-rated based on the time left till the next tax bill to the buyer at settlement. If the taxes weren’t paid it’s a another settlement issue.

[Starwolf]

There is more to this that the story says. The homes were incomplete and not usable. The bank had a choice to complete the houses and then not sell them or tear them down and reduce costs. They made the correct business decision. Victorville, Adelanto and other nearby ares are overrun with unsold home. No one went homeless over this.

[SouthernmostFreeper]

THANKS!

[radiohead]

You’re right to a certain extent. But after reading the text for the story, it appears the houses weren’t up to code, hence the fines. OK. The developer put up the houses before putting in roads, and other necessary improvements and then there was no more money. No one’s going to buy a house where there’s no road or no infrastructure, hence, the inability to sell the houses and obtain tax revenues as you suggest.

I don’t know what the developer was thinking to work this way, maybe they all do it, but it seems shortsighted. Developers run into money problems all the time, not just in this economy. You’d think they’d build a section that was livable, then go to the next, not just put up a bunch of houses w/no supporting infrastructure that would be unsellable should the money run out.

[Two Kids' Dad]

Aside from being the correct business decision this was also a big upraised middle finger to the municipality. Essentially telling them “Screw you and your fines! We’re outta here!” and leaving the community worse off than it would have been had they been left alone to engage in free-market capitalism.

California is rapidly becoming like a new chapter in Atlas Shrugged where the various levels of government are openly hostile to businesses.