Silver Lining of Subprime Slips Away in Calif. Suburb

STOCKTON, Calif. -- Venice Circle is a loop lined with taupe homes and green lawns, a clear sign that drivers have left the freeway south of town and entered Weston Ranch, a 21st-century Levittown. The subdivision sprang up in asparagus fields 80 miles east and a world away from the urban settings buyers were delighted to escape: gritty, violent east Oakland, and grittier, deadlier Richmond nearby.

This bedroom community is populated overwhelmingly by minority families, who were lifted by a wave of easy credit over the Altamont Pass and into dream homes. And if Stockton today is the foreclosure capital of the nation -- as several surveys show it to be -- it also showcases a little-known upside of the "subprime crisis": the elevation nationwide of hundreds of thousands of African Americans into homeownership.

"Everybody got a chance to be a homeowner," said Geri Taylor, who as a sales agent for Weston Ranch sold many of the 5,000 homes, and watched as many new owners saw them slip away.

When the bubble burst, Venice Circle became populated by first-time homeowners hanging on by their fingernails, by grateful newcomers who found bargains in foreclosures and by the ghosts of those who lived the dream for just a few months.

What happened here was not unusual. But on the hot, flat floor of the Central Valley, in a sparkling new subdivision a two-hour commute from the old world, it unfolded with unusual clarity.

Each of the houses sold to an African American served to narrow the gap between white and black wealth. The gap is nearly as persistent as it is wide. Almost a century and a half after the Emancipation Proclamation, the difference between how much you make and how much you have comes down to this: For every $1 of net worth in a household headed by a white person, a household headed by a minority has 13 cents.

"Earlier this decade it was 6 cents," said Andrea Levere, president of the Corporation for Enterprise Development, the Washington advocacy group that calculated the figures from Census Bureau data. "It is all because of homeownership that we've at least moved up to 13 cents."

A striking number of black Americans bought in Weston Ranch -- and within three or four years were undone by the combination of ballooning mortgage payments and crashing home values. Foreclosure notices went to every 27th home in Stockton, according to the latest survey from the firm RealtyTrac.

"This period represents the largest loss of wealth for minority households in the nation's history," said Paul Leonard, a former Housing and Urban Development official who runs the California office of the Center for Responsible Lending.

A swing around Venice Circle, meanwhile, shows what's at stake.

'We Were Able to Get Out'

Twice a day for two years, Latasha Harris-Davis could see exactly how far she'd come. The commute from her new house in Weston Ranch to her Bay Area job ran through her old neighborhood in Oakland's tatty east side.

Laundry drying on a wrought-iron fence. A death announcement in gang graffiti: "TOE 98 Cherry Boys. RIP Lil D."