Alyssa Katz breaks down how real estate came to own us.

 

Alyssa Katz breaks down the current mortgage crisis in this book.

We all know that the housing market is a mess, but Alyssa Katz’s new book helps us understand how we got here. 

 

A journalism teacher at New York University and an editorial consultant for the Pratt Center for Community Development, Katz shows the interaction of government policy, multi-pronged greed, citizen activism and consumer choice that led to this dire state of affairs in Our Lot: How Real Estate Came to Own Us. 

Katz begins and ends the story with the late Gale Cincotta, one of the foremost activists to make homeownership more accessible to poor people and the former director of the National Training Information Center, which, surprisingly, Katz does not mention.  The earthy Cincotta, who hailed from the Austin neighborhood on Chicago’s West Side, is both the book’s conscience as she returns year and year to the nation’s capital to advocate for greater acesss to mortgages for credit. Yet she and the people she worked with also played a part in creating the current messy situation, Katz argues, because they helped create a new market. 

Enter Fannie Mae, Freddie Mac, the Reagan-era philosophy of deregulation that undid half a century of government intervention in the market and a bunch of hungry traders eager to make a mint.  Katz maintains that these elements led to literally hundred of billions of mortgage securities that ultimately turned toxic.  

From these broad contours, she sets out on the road, moving in space and forward in time from Cincotta in Chicago in 1972-a period that Amanda Seligman covers ably in Block by Block: Neighborhoods and Public Policy on Chicago’s West Side-to a bleak tour around the country that shows the different flavors and regional dimensions of the crisis.  

The reader travels with Katz to places like Holland, Michigan in the mid-90s, where she examines the misguided Clinton-era policies emphasizing home ownership, to Orange County in California, where the subprime market is explored, to multiple levels of crime in Atlanta in the earlier part of this decade, to Florida, where the buying and selling frenzy was at some of its most intense.  

In some ways, the bleakest chapter is about Cleveland, where whole neighborhoods are being boarded up.  Alex Kotlowitz wrote about the post-apocalyptic-looking landscape earlier this year for The New York Times Magazine; his story and this section of Katz’s work have similarly depressing effects on the reader. 

In each chapter,  Katz includes affected individuals, policy analysis, a dash of history, an absence of government oversight and players big and small hungry for a profit.  Each played a role in the debacle, she says. 

Our Lot ends in Brooklyn, where my mother and Katz both grew up, and where she shares her own journey from growing up in an affordable city in the 70s and 80s during the era of rent control, to finding the city utterly unaffordable as an adult 15 years later due in large part to the rental protections measures being weakened, if not eviscerated as they were across the country.   She and her husband Bryan Swirsky eventually bought into a copy for a price that may make readers drool-hint, it’s less than $250,000.

The epilogue contains a summary of Katz’s thoughts, including a call for a return to New Deal-like measures that will prompt a return to more rational consumer behavior.   She concludes on an optimistic note, saying that for the first time in decades citizens have a chance for meaningful participation in policy making input.  

Our Lot’s strength lies in its multi-faceted exploration of the crisis’ origin.  The description of the noble intentions of activists like Cincotta being subverted by greedy speculators and regulation-gutting politicians is poignant.  To her credit, she does not tell a one-dimensional, left-leaning tale of government exploitation of innocent citizens.  Rather she takes the Clinton, second Bush and Reagan administrations to task in different ways.

While she places primary responsibility for the debacle on the politicians’ actions, Katz also talks about how many people received loans that they should not have, and, beyond that, how others’ desire for a quick buck lead to making poor economic choices.  The section about the Learning Annex’s Real Estate and Wealth Expo in Florida’s Broward County, complete with a cameo appearance from motivational speaker Tony Robbins, is absolutely blood curdling.   Katz’s nationwide tour effectively gives the book a simultaneous national and local feel. 

That said, Our Lot has its limitations.  

To begin, it focuses largely on urban areas, where, to be fair, the majority of housing exists.  Still, some information on rural areas would have helped round out the picture.  In addition, the invocation of Roosevelt and his New Deal-era policies, while well argued, were quite predictable and reminiscent of any number of books that are out these days.  

A number of Western European countries have largely inured themselves to some of the most devastating aspects of the crisis through their actions that lead both to bankers having much more active relationships with their clients and people not being granted loans they obviously cannot afford.  Some context there would have been helpful, too.

Finally, she does not adequately explore the relationship between the citizens and the officials they elected.  A strong case can and has been made that the influence of money in politics, along with systematic and historic disfranchisement efforts, have led to our country being a democracy more in name than in practice.  In this context, it is unsurprising that the peoples’ interests have not been fully represented.  Katz appears to believe this, but does not write about it, nor does she explain how Roosevelt and Johnson’s presidencies were different.   

I understand that a full examination may have been outside the scope of this work, and the complete omission of this conversation is a significant one. 

All in all, though, Katz’s first book is a quick and useful read to help us understand how we have gotten into the current sordid state of affairs and what actions might be taken to, as legendary guitarist Jimi Hendrix sang, find a “way out of here.”