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Huge ‘Tent City’ Forming Outside Sacramento

http://www.casavaria.com/cafesentido/2009/03/09/1622/huge-tent-city-forming-outside-sacramento/

Economic Recovery, Economy-US, In the Loop, Mortgage & Credit Crisis, Politics-US, US news

9 March 2009 :: J.E. Robertson

An array of reports show some 1,200 people living in a growing tent city outside the California capital Sacramento, as more and more people are left homeless by the housing crisis. The UK’s Daily Mail on Friday detailed the community, noting echoes of the Depression era. There are an estimated 2,000 people living in such communities around Sacramento, with foreclosure and jobless rates skyrocketing.

Smaller tent cities had been reported in Los Angeles and New Orleans over the last year, but a new photo essay, published by MSBNC, highlights both the magnitude of the Sacramento tent city and its comparison to Depression-era tent cities that emerged as homelessness became a pervasive national crisis.

The news is jolting to many who are worried that the spreading foreclosure crisis and collapse in real estate values, in combination with a faltering job market, could push families with “underwater” mortgages into homelessness. California is one of the wealthiest states and one of the world’s largest economies, and pressure for serious efforts to combat the economic crisis is mounting.

The president’s American Recovery and Reinvestment plan (ARRA) is just now beginning to be set in motion, and most of the stimulus effect will not be felt for months. The state of California, already extremely hard hit by the energy crisis relating to alleged price-fixing schemes by a series of power companies, a situation which likely ended the tenure of Gov. Gray Davis, has also been hard hit by the collapse of the Madoff hedge fund, which stripped the state pension fund of massive long-term value.

The state is in a serious state of fiscal crisis, facing unprecedented budget deficits, the fixing of which has been the focus of much of the state government’s activity in recent months, with the Republican governor Arnold Schwarzennegger locked in a fight against his own party. Fixing the employment and housing crises will rquire serious efforts to fix these fiscal problems as well.

MSNBC reports that 20 to 50 people per week are joining the shantytown community, positioned along the same bend in the American River where “transplanted Tennesseans” who had sought work far from home during the crushing worst of the Great Depression. Photos from 1936 show the community then in comparison to its 2009 reincarnation.

With just 500,000 residents, Sacramento now finds nearly one-half of one percent of its population living in such communities, as unemployment there hit 10.4 percent in January. Police patrol the area and aid workers deliver food and clothes, according to reports.

The Daily Mail tells the story of a couple in their fifties who both lost their jobs in quick succession and have been unable to find work since or remain in their home:

With homeless shelters full in Sacramento, they had little choice but to use what savings they had left to buy a tent.

The couple admit they have yet to tell their grown-up children about their hand-to-mouth existence.

Tena said: “I have a 35-year-old son, and he doesn’t know. I call him, about once a month and on holidays, to let him know that I’m well and healthy.”

“He would love me anyway, but I don’t want to worry him,” she said. There are likely many families with similar issues, as California loses 80,000 jobs per month in this worsening crisis. Pres. Obama’s plan to stop foreclosures would allow up to 9 million people to avoid foreclosure by way of aggressive restructuring of home mortgage loans.