Our Lot by Alyssa Katz

Subtitled “How Real Estate Came to Own Us”, Katz’s book attempts to explain the explosive growth of the United States real estate market and the development of mortgage-backed securities leading to the housing bubble and the economic crisis of 2008. Starting right at the start of the Great Depression, Katz explains how President Roosevelt saw construction of homes — not just the bridges and tunnels history books highlight — as a key tool to jump starting the economy and putting Americans back to work, which lead to one of the first mortgage crises.

The government pushed to open up borrowing for Americans, particularly after World War II, through government-backed enterprises. These enterprises, however, preyed upon the poor charging unbelievable interest rates and supported discrimination against people of color while encouraging white Americans to move to newly developed suburbs.

The dismantling of the banking regulation under President Reagan allowed the traditional lenders of home loans and, in hindsight, rather risk-adverse savings and loans establishments to become more involved in risky investments leading to the S&L crisis of the 1980s and 1990s. The response to this crisis, according to Katz, was to further dismantle the regulatory separation between savings and loans establishments and investment banks under President Clinton, who made it a national priority to push for more Americans, particularly people of color, to purchase homes. This push was also championed by President Bush, and banks became these behemoth monstrosities where lenders were told to push sub-prime mortgages while the banks that owned them traded these toxic mortgages at huge profit margins. Too many hands in the cookie jar yet too big to fail.

The information about housing crises pre-2008 was entirely new to me, although I had read about the push to turn all Americans into homeowners by both Presidents Clinton and Bush before and knew that policy had contributed to the current financial crisis. I had never heard of home construction being a cornerstone of the New Deal long before the GI Bill passed following World War II, which provided low-interest mortgages to returning (white) servicemen, and while it wasn’t always the easiest story to follow, it is one that I was glad to finally be hearing. Once again, it seems that no one has been paying attention to history because much of what occurred then resurfaced again during the current crisis because just today I read about how home construction needs to be jump-started once again in order to raise the United States out of its current recession. Never mind how such policies have lead to a series of unstable booms followed by crippling busts; never mind that the Millennials who should be buy homes right now are crushed by student loan debt.

My enjoyment of the book, however, declined  towards the end as Katz moved onto to more present-day concerns: shoddy construction in California, mortgage fraud in Atlanta, dubious land schemes in Florida, and efforts to abolish rent control in New York. The addition of these stories, I think, are to help the reader feel less, well, helpless with the whole situation and while I certainly am open to hearing about these particular problems, such regionalism and specifics pull attention from the historically-based, big picture critiquing narrative she had been constructing for the reader.

Book Mentioned:

  • Katz, Alyssa. Our Lot: How Real Estate Came to Own Us. New York: Bloomsbury, 2010. Originally published 2009. Print. 304 pgs. ISBN: 9781608192052. Source: PaperBackSwap.
Book Cover © Bloomsbury. Retrieved: June 15, 2014.
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