Two weeks in the West

Doomsayers think suburbia will be slaughtered by rising oil prices, or drought. But for now, gas is relatively cheap, the grass is still green, and the population keeps on growing. Suburbs continue to gobble up the Western landscape. Don’t be fooled, though: Suburbia is suffering. But don’t blame water or oil for the cul de sac’s decline. Blame creative financing.

So-called exotic loans, offering low payments for the first few years, helped fuel a housing feeding frenzy during the last half-decade. Big builders responded by extending their cookie-cutter developments farther out into the deserts. Now, the loans are all resetting to higher payments and interest rates, and folks are realizing that they couldn’t afford their homes in the first place.

A wave of unpaid mortgages has ensued, hitting the West the hardest: Nevada and Colorado lead the nation in foreclosures, with six other Western states in the top 25. The effects have rippled through the housing market, sending once-flush real estate agents to find other jobs; 21 percent of real estate licenses in Nevada are now “inactive.” And the number of empty houses on the market has climbed to an all-time high — up 40 percent in the West in just a year.

A strange twist has emerged in California, where drug dealers took out easy mortgages to buy upscale suburban homes, which they then converted into sophisticated marijuana plantations. Since last summer in Northern California, cops have busted 50 such marijuana McMansions. This spring, they’ve found a handful in Southern California.

Apparently, the neighbors’ suspicions were not aroused, even though they were never invited over for cocktails and a barbecue.

But even as some suburbs decay, others rise from the sagebrush. In one Western county that’s home to just 4,500 people, a developer wants to put up to 16,000 new homes on 8,600 acres. Many of the new development’s 20,000 or more residents would work in a nearby city. And where is this happening? Near Reno — in Nevada, the state with the highest foreclosure rate in the nation

So much for that New West economy. Not long ago, it seems, pundits predicted that the Old West’s extractive industries were dying, and would be replaced by service and real estate. Then came the energy surge, and gas wells popped up and coal boomed. (Peabody Coal’s profits shot up 91 percent from 2001 to 2006, for example.) Now, even metals are coming back.

The price for a pound of copper leapt from about 65 cents in 2000 to over $3 today, thanks in part to China’s bustling economy. As a result, thieves have been mining construction sites, irrigation systems and substations across the West for copper wires, tubes and pipes. That’s one way to make a buck. The other is to go to work down in Arizona’s Pinal Mountains, where the once-dormant copper mining economy is coming out of hibernation. Globe and Miami, east of Phoenix, are on the precipice of a new boom as large mines owned by BHP Billiton and Phelps Dodge prepare to reopen, after sitting idle for most of the past decade. Other companies also have their eyes on the area.

Logan, Utah, residents have been warned by power experts and their own mayor that if they don’t stake their power future in a planned coal plant, they will risk blackouts and high rates. But the people and the city council have ignored the advice, voting in March to stay away from dirty power. The growing city of 40,000 plans instead to look into renewable energy sources.

Similar rumblings have been heard in response to electrical wholesaler Tri-State Generation and Transmission’s plans to build new coal plants. In western Colorado, the Delta-Montrose Electric Association, one of Tri-State’s 44 customers, refused to sign onto the Tri-State plan. The association wants to get more power from local sources like hydropower and methane vented from coal mines.

It’s not exactly a revolution, but other Tri-State customers have also expressed resistance to the coal plants. And in April, Tri-State announced that it would put off plans for two coal plants, although not necessarily because of the protests.

• Growth & Sustainability
• Nevada