In Stockton, Calif., Years of Unraveling, Then Bankruptcy
This inland port on the San Joaquin River recently became the largest city in the country to declare bankruptcy, but evidence of its unraveling has been mounting for years.
It is visible in the rising domestic violence rates, booming private security businesses and a seemingly unstoppable stream of foreclosures. And it can be seen in smaller form too — at a struggling piñata shop, on the once-yellow fire hydrants faded to gray, in a case of stolen koi.
“The police don’t respond to anything unless there’s blood involved,” said Marlene Hinson, 51, who, after living here for 22 years without incident, was burglarized three times in four months, including the fish theft from her pond in a neighborhood of lush lawns and towering shade trees.
Even as some parts of the country are tentatively emerging from the worst downturn since the Great Depression, this city cannot seem to find solid ground.
While 50 miles to the north, in Sacramento, a bankruptcy judge and lawyers for Stockton and its 18 creditors have begun to sort out who owes what to whom, Stockton’s 292,000 residents have been left trying to hold together some semblance of order and respect for themselves.
The indignities have piled up and compounded in ways few could have imagined. After housing prices shot up in the early 2000s, when commuters from the San Francisco Bay area bought and built up homes here, the median home price plummeted by more than 60 percent in the last five years. In the first half of this year, the city had the highest foreclosure rate of any in the country, according to RealtyTrac, a company that collects foreclosure data. While it has come down a few points in recent months, for the last few years the unemployment rate hovered around 17 percent, nearly double the national average.
While Stockton’s bankruptcy troubles can be traced in part to the collapse of the housing market and the subsequent erosion of the city’s tax base, for years city leaders also mismanaged and overspent funds, pushing the city into financial peril, analysts and current city officials say. Stockton cannot afford the $417 million it owes for retiree health benefits, city officials say, and this year a bank repossessed city-owned parking garages and a $40 million building the city had bought with plans for an upgraded City Hall.