Repetition in Land Contracts Confronts Simple Predatory Assumptions

New Orleans  One of the most interesting things the ACORN Home Savers Campaign has learned is to pay very close attention to what families are saying on the doors when we visit. Over and over we have had some of our operating assumptions challenged by what we learn when we are actually visiting with contract signers who are the owner-occupants in these deals.

None of this changes the basic paradigm at the heart of all potentially predatory transactions. On one side a company or individual or slumlord-wannabe is seeking to take advantage of a market dysfunction, usually financial, for consumers, usually low-and-moderate income. On the other side the consumer, often a family, is desperate for its tax refund or for affordable housing or for money to pay a health or funeral or education expense or access to credit for anything and everything. It’s the premise that allows banks and payday lenders to charge usurious interest rates, tax preparers to advance refunds a couple of days quicker than the IRS at incredible rates, and hundreds of other schemes.

In the real estate market it is why a Harbour Portfolio can charge 12% interest on a 30-year loan with a low downpayment on a contract-for-deed property when mortgage interest is running at 4%. It’s why thousands of slumlords in city after city can charge exorbitant rents, deposits, and fees for barely livable housing to families who are simply desperate for housing. It’s also what hovers around the rent-to-own, lease-to-own, lease-option markets that offer below market rents in “as is” condition, often with minimal assurances of habitability to families also desperate for housing but also sometimes hoping for ownership.

In the first months of doorknocking in Philadelphia, Pittsburgh, Akron, Youngstown, Detroit, and Atlanta listening taught us that the search for lower rent and bargaining power against rising eviction rates for tenants was making various land purchase schemes more of an attractive alternative for many lower income families than any hope of ownership. Often in the early doorknocking when we actually explained the contracts they had signed with various companies, families would ask us straightforwardly whether they should flee or fight, though most wanted to fight if they had a way to do so and had already put too much money and sweat into their places to want to walk away.

More recently in Detroit visits we are finding that families are often on their second or third contracts with various companies. In Detroit we also found in talking to people and warning them about the predatory nature of some of the contracts, almost as many people were asking us how they could get into a contract as were asking us how to protect themselves in a contract. In Detroit and Atlanta we were finding family after family where people were asking us how they could get into additional contracts. One young man in Detroit told us he was embarrassed that his mother, uncle, and sister were all “bettering themselves” in contracts, and he was still just renting a place. In Atlanta a Harbour contract holder told me her mother had also had a contract with another company, and she had tried to see if Harbour had other properties available.

So, yes, in some cases people are willing to sign a contract to have secure rent, regardless of the situation for a couple of years, but others, along with their families, are climbing up the contract ladder in the hopes of owning a home and doing so over and over again, even after slipping to the bottom, and they are bringing friends and relatives with them. Sometimes what you learn in organizing is not what you expect, but you have to adapt, and in this case it is clear that the Home Savers Campaign has to fight on one front to make sure the homes on various contracts are habitable for families and fairly understood, and on the other hand has to devise the ways and means to help families over the last rungs of the ladder to their dreams of home ownership.


My Jay Thomas, Jon Terrell Story

the old Lakeview Theater in New Orleans

New Orleans  The actor, comedian, and radio personality Jay Thomas, born Jon Terrell, died recently. I read his obituary with interest. His career had included memorable parts and some awards in shows from “Mork and Mindy” to “Murphy Brown” and more recently “Ray Donovan” on Showtime. The obits mention that he was born in Texas, lived and went to high school in New Orleans, and died in Santa Barbara, California. In almost all of the reports they mention his recurring guest spot around Christmas on the “David Letterman Show” when he would retell a classic story of the time when he and a buddy were doing a radio promo at a car dealer in Charlotte, North Carolina with the original Lone Ranger in full regalia, Clayton Moore.

As it happens, I have a story that has often been retold in my own family as an enduring classic from my own adolescence in New Orleans where Jon Terrell is also a central character. I’m not sure how it all came to be. We must have been 10-years old in 5th or 6th grade together or maybe the Cub Scouts, but somehow Jon’s mother connected with my mother in the way of the world in the 1950s and invited me go with Jon to see a Saturday matinee at the Lakeview Theater across Bayou St. John from their big house on the other side.

We were scheduled to see the classic Disney film, Bambi, legendary to all children and making another appearance at their neighborhood movie house. One thing must have led to another and by the time Jon’s mom dropped us off, the crowd there had swollen to full capacity, and we couldn’t get tickets to the show. Mrs. Terrell had someplace to go and thinking nothing of it, there was another neighborhood theater right across the street on Harrison Avenue that was playing a double-feature, so she gave us our ticket money, and said she would pick us up at the end of the show.

The movie had already started, and we ran in excitedly getting seats in the darkened theater in the back where they were still available. It hardly mattered. Within minutes we were howling in horror, crawling under the seats in fear. We would occasionally both raise our heads for a minute or two above the seats, like small prairie dogs coming up to look around from our holes, before diving down to the floor again and holding our ears.

We had walked into Frankenstein in all of its black-and-white horror, and once we lived through that and finally settled into our seats for the first run release on the double bill, it was the The Blob, hardly less frightening to two young boys sidetracked from sweet fantasy of Bambi. In the Sputnik, duck-and-cover 1950’s, The Blob was almost more horrifying to us, because it seemed it could seep down our own streets and gobble up our houses as well, eating us and everything around us as we watched helplessly.

I’m not sure if Jon ever made anything of this story, but at the time it was the longest afternoon of our lives, and for me one of the most vivid memories of my boyhood. It is also the often unspoken explanation for why I usually change the channel and walk out of the room whenever anything remotely like a horror movie rolls across the screen.