They’re scattered all across the country, sitting like apocalyptic metaphors for the post housing crash world to see. Half built residential and condominium developments as well as mixed use projects that have taken an ugly turn from their original plan.
In so many cases homeowners have been hung out to dry either after the smack of the Bankruptcy judge’s gavel or by developers who simply saw the crash coming and made an abrupt change in direction in an attempt to avoid catastrophic failure. Left in their wake are confused, angry and victimized homeowners who don’t fully know who to blame and likely don’t have the resources to pursue a remedy even if they did.
No easy answers
There are no easy answers in one of the housing market’s quiet, residual messes. Unfinished developments are everywhere and they sport weathered ‘for sale’ signs much like modern day tumbleweeds.
The difficulty for homeowners caught in the crossfire of these failed projects is who to blame and what to lobby for in what may come next for their communities. In so many cases those residents who were early in and hoping for instant equity growth got caught frozen in time when the crash came in 2008.
Now they watch, wait and pray that their respective areas will slowly begin to plod forward within the covenants and guidelines that they purchased their properties under. Sadly in today’s new world of housing, the pre 2008 world and its path have been essentially wiped clean.
Developers took one of two paths
The big distinction in these types of developments is whether they’ve changed directions or stalled completely as a result of a developer’s financial failures or because a developer simply decided they couldn’t continue on a given path and survive. Attorneys have been warming up in the bullpen since the crash began on the latter and now have ample ammunition to pursue those developers who changed or violated their own original covenants.
How courts will rule in the long run is anyone’s guess but there are numerous platted communities across the country that have undergone a developer’s plan change where homeowners are seeking immediate injunctive relief. In several cases, courts have forced developers back into their original plans. In others there were legal compromises between the developers and the homeowners who both needed to have their communities finished.
What now for lost equity?
So what’s the best path for those owners who got in early and now stand to lose a significant portion of their equity by the changes that today’s economy has forced on them? It’s become a balancing act for homeowners who have been forced to juggle fighting for the continuity of what came before with the financial reality of what comes next.
If the original developers are still in place, it usually allows for some form of compromise that can salvage some of what the first homeowners have invested. If developers have gone bankrupt or left the business, homeowners have fewer choices and obviously stand to be damaged at a much higher level. In these cases, simply getting the neighborhoods completed may be a more palatable outcome than letting their development get branded by years of vacant lots and whispers of things that are more damaging than lesser priced homes being built.
Either way, the housing crash that’s dominated the first 10 years of the 2000’s is a scar that will be felt and seen for years to come.