The Unwinding

by George Packer

  For it was really the county that grew. While the city of Tampa inched past three hundred thousand people, Hillsborough County, with its vast tracts of unincorporated farmland and ranchland and wetland, surged beyond a million. The selling point wasn’t America’s Next Great City after all—Tampa was an old port with a defunct cigar industry, a history of labor trouble, a high crime rate, and an uneasy mix of Latinos, Italians, Anglos, and blacks. No, the growth was actually hostile to urban life. What it offered was the American dream in a subdivision, the splendid isolation of a new homestead an hour’s drive from downtown. A developer’s brochure promised thousands of square feet “a comfortable distance from the higher prices, taxes, and congestion of big city living. Come enjoy the home Tampa residents can only dream about.” That was the ethos of the Sunbelt, and since the seventies it had made the Sunbelt the model for the country’s future.

  As long as more people came this year than last year, and next year than this year, there would always be more houses to build, and more jobs in construction and real estate and hospitality. Property values would continue to go up, and the state could continue to do without an income tax, financing its budget with sales taxes and real estate fees. To encourage more growth, friendly county commissioners would waive the impact fees that were supposed to be assessed to the developers in order to help pay for new roads and water lines. In the exurbs going up around Tampa Bay, property taxes could remain low, with new schools and fire stations funded by bond issues floated on the projection of future growth. So in a sense everyone was getting returns from investments that would come in tomorrow, or next year.

  A few local critics pointed out the strategy’s resemblance to a Ponzi scheme. But everything kept growing and no one paid attention.

  The growth machine cleared out the pine trees and palmettos and orange groves along State Road 54 up in Pasco County. It cut down the mangroves on Apollo Beach and laid asphalt over the strawberry farms around Plant City. Farther south down Interstate 75, in Lee County, the growth machine built a university on the wetlands near Fort Myers (Senator Connie Mack put in a call to the Army Corps of Engineers), and it sold quarter-acre lots on the installment plan between the drainage canals of Cape Coral. Farmers and ranchers cashed out and suddenly, where there had been orchards or pastures or swampland, developers put up instant communities—they were called “boomburgs”—and christened them with names that evoked the ease of English manor life: Ashton Oaks, Saddle Ridge Estates, the Hammocks at Kingsway (even the trailer parks had names like Eastwood Estates). Overnight, it seemed, the growth machine paved empty fields of wiregrass into straight flat suburban streets called Old Waverly Court, Rolling Greene Drive, and Pumpkin Ridge Road, and along the curbs, driveways with small treeless yards appeared, and two-story concrete block houses went up, with stucco walls painted yellow or beige and a columned archway over the front door to lend an illusion of elegance that would jack up the price. The developers promised recreation centers, playgrounds, and lakes, and they sold the houses on spec for $230,000, unless you got in six months later, when it might cost you $300,000—you were buying or you were dying. Shopping malls and megachurches sprang up nearby, and the two-lane highways got so crowded that they had to be widened.

  No place was too remote or unpromising for development. Gibsonton was a little town on the eastern side of Tampa Bay, where carnival freaks used to spend the winters—old rural Florida, bait shops and shotgun shacks and Spanish moss hanging from live oaks. A builder out of Miami called Lennar Homes wanted to bury a tropical fish farm in Gibsonton under dirt and concrete and put up a new subdivision of 382 houses. There were no nearby schools except in trailers, no shopping besides a Wal-Mart a few miles away, and no jobs within a forty-five-minute drive. But it was growth, so the county commission ignored the warnings of its own planners and gave Lennar every possible break on impact fees and taxes, and in 2005 Carriage Pointe opened for business.

  There were no town centers out among the subdivisions, no towns at all, no hills to relieve the flatness, so that you never quite knew where you were without GPS, or what time of day it was without a clock, since the bright tropical light hardly varied. A landmark would be a four-way stoplight at the intersection of two eight-lane roads, with a Publix in one corner, a Sam’s Club in the next, a Walgreen’s in the third, and a Shell station in the fourth. There was a Town Center in Brandon, a vast unincorporated boomburg of a hundred thousand souls, but it was the name of the biggest shopping mall. Brandon’s main street was West Brandon Boulevard, or U.S. 60, and in the half mile between stoplights, the shops passed by in an uninterrupted blur: Einstein Bros Bagels Florida Car Wash State Farm Dairy Queen Express Lube Jesse’s Steaks McDonald’s Five Star Paint Ball Aquarium Center Sunshine State Federal Credit Union Mister Car Wash Weavers Tire + Automotive Wendy’s.

  The growth machine became the employment agency. Other than minimum wage jobs at restaurants and big-box stores, it was hard to find work outside the real estate industry. In the hierarchy of the boom years, the poor were Mexican day laborers on construction sites; the working class had jobs in the building trades; the lower middle class were bank tellers; the middle class were real estate agents, title insurance agents, and civil engineers; the upper middle class were land use attorneys and architects; and the rich were developers.

  Some of the buyers were refugees from Tampa, leaving the city behind on that promise of a dream home in a place they’d never heard of called Country Walk. Most came from out of state. But the area wasn’t Miami or Palm Beach, a destination for upscale snowbirds. It was settled mainly by lower-middle-class people, many of whom followed the I-75 trail down from Ohio, Michigan, and other midwestern places that nurtured frugality and prudence. Hillsborough and the neighboring counties became conservative, churchgoing country, with antiabortion signs and prophecies of Judgment Day scattered among the highway billboards advertising model homes and liposuction. But those older values went soft in the flat light that stared down like a constant high noon.

  There were the Luxes, Richard and Anita, from Michigan. Anita’s father had worked in Ford’s River Rouge plant long enough to remember Henry Ford and Walter Reuther, and Anita had a job with the city of Dearborn, until Richard’s architectural firm asked him to start a new Florida office in the eighties. Anita brought her father’s frugality to St. Petersburg and remained a coupon queen. But she went to work at Wachovia Bank, which got heavily into subprime loans after acquiring World Savings, out of California: the loans were called “Pick a Pay,” and the customers were invited to design their own mortgages, choosing an interest rate and a payment plan. These loans were squeezed into the spectacularly profitable juice that fueled the growth machine.

  There was Jennifer Formosa, also from Michigan, but raised by her mother in Florida. After high school she went to work as a bank teller in Cape Coral and married her baby’s father, a local guy named Ron, who didn’t have a high school diploma but made decent money pouring concrete foundations. Ron and Jennifer took out a $110,000 mortgage and built a three-bedroom house, refinanced to pay their bills, took out an equity line to put on a new roof, then refinanced again to pay off their cars, put in the patio, buy a boat, and blow the rest on cruises and trips with the kids to Disney World.

  There was Bunny—“just Bunny”—who grew up on Utopia Parkway in Queens, New York, then chased the sun and the good life to Hawaii, Arizona, and West Palm Beach, before ending up in a subdivision called Twin Lakes on State Road 54 in Pasco County, where she bought for $114,000, then watched her house go up to $280,000 in six years.

  And others came from farther afield. There was Usha Patel, the daughter of a successful contractor in Gujarat. Usha grew up a spoiled brat who was driven around by a chauffeur and never had to clean her dinner plate. But everything changed in 1978, when she was eighteen and her family married her off to an Indian engineer who worked in London. In 1991, because of her husband’s back problems, they decided to move with their two child
ren to sultry Tampa, where her brother practiced medicine. In Tampa, Usha learned once again to start from scratch and work herself to the bone. From six in the morning till two in the afternoon she ran the cash register at a gas station her brother had bought in a drug-ridden area in southern Hillsborough County (she was robbed twice at gunpoint), making three hundred dollars a week. From the gas station she drove home to Brandon in time to meet the kids after school, feed them, make sure they did their homework. Then she put on the uniform of a Mexican restaurant where she waitressed from four until eleven. “That is how the money came.”

  Usha saved and saved, and she raised her children to do the same. When her little boy wanted a pair of Air Jordans, she told him, “You’re paying for Michael Jordan’s name, that is all.” She didn’t even buy a house until the children had graduated from college.

  Once the kids were working, she faced the choice that confronted other immigrants before her who were named Patel and came from Gujarat: a gas station or a motel. She knew about the dangers of late nights behind a cash register, so in 2005 she set her sights on a Comfort Inn, just off I-75 where it crossed State Road 54 amid the boomburgs of Pasco County, less than three miles from Country Walk. It was a two-story motel, sitting between a Cracker Barrel and an Outback Steakhouse, painted green and beige, with sixty-eight rooms at fifty dollars a night and a tiny swimming pool next to the parking lot. Usha paid $3.2 million, half a million in cash. The rest came in two loans, one from the Small Business Administration for $1.2 million, the other from a commercial lender called Business Loan Express for $1.5 million. Looking back, she came to believe the deal was fraudulent, based on a wildly overstated appraisal, but the lenders told her what to write on the application, and she wrote it.

  “They get you into debt like putting butter in your mouth,” she said. The motel was as unremarkable as any Comfort Inn around the country, maybe more so—but it was hers.

  A lot of the buyers were speculators, from all over—flippers who aimed to clear fifty thousand dollars in six months—secretaries who made thirty-five thousand a year and juggled five or ten investment homes worth a million dollars, car salesmen who made their real money when housing doubled in two years. At the peak of the madness, in 2005, a house in Fort Myers sold for $399,600 on December 29 and $589,900 on December 30. Flippers were the ones driving prices to crazy heights. Mike Ross was a flipper.

  Mike grew up in Newport Beach, California, and moved to Florida at age eleven. He came from a long line of boat builders, and after dropping out of ninth grade he went to work at the Pasadena Yacht and Country Club in Gulfport, across the bay from Tampa, repairing the boats of very wealthy people. He worked on a crew at first, and then for himself, and over time he made a hundred fifty dollars an hour sandblasting aluminum engine intake vents and refinishing the factory’s lousy varnish work—varnish was a lost art. One of his clients was the CEO of duPontREGISTRY (“The World’s Premier Luxury Marketplace”), who flew Mike and his wife on his private jet to wax his boats in the Bahamas. Another was Jim Walter, a Tampa multimillionaire who built cheap and quick houses all around the country. Mike took pride in his skill, and there was no end to the work—within three years of going solo he had 60 percent of the marina, he was making seventy grand a year—but it was backbreaking and brutal in the heat, with chemical compounds from the high-speed buffer flying into his face.

  One day in 2003, Mike began shaking and vomiting from heat exhaustion. That’s when he decided to stop working on boats. He was forty-two and overweight, and his body was tired. He’d always wanted to flip houses—he was just too chicken to do it. A lot of the guys whose boats he’d worked on made their money that way, or dabbled in it, and they encouraged him to try. Mike and his wife bought their first investment property with a loan from Swift Funding Corp. at 3 percent above the normal rate—a liar’s loan, a subprime loan. It was the easiest thing in the world. He thought he’d clear 7 or 8 percent. The house cost them $50,000, and after working on the kitchen and bathroom for two months, they turned around and sold it for $68,000. Next they spent six months fixing up their own house in St. Petersburg, which they’d bought in 1985 for $48,000. At 5:00 p.m. on a Friday, Mike put up a sign outside: FOR SALE BY OWNER. The phone started ringing off the hook, and within three days they’d sold it for $169,000—amazing money. Then they bought a hundred-year-old farmhouse in rural Georgia, near Mike’s parents, and moved up there to work on it. There was no fear anymore. It was the height of the market and it was so easy.

  * * *

  And there was Michael Van Sickler.

  Van Sickler grew up outside Cleveland in the seventies and eighties, when the city was bankrupt or close to it. His father was an engineer with General Electric in Nela Park, in charge of GE’s holiday lighting program—the Van Sicklers always had the best Christmas lights on the block. Life in suburbia bored Mike out of his mind—on summer days he’d sit around thinking, “God, where are the people?” Escape became possible in high school, when he and his friends would ride the Rapid, the light rail line, from Cleveland Heights to downtown and watch the Indians play a night game at Municipal Stadium, which was always empty in those last years before it was torn down. Then they’d walk over to the Flats, a factory zone by the Cuyahoga River that had been abandoned and then converted into a bar district where everybody congregated, and they’d try to meet girls. “That was probably when I understood the magic of what a city could do,” he said—even a dingy Rust Belt city like Cleveland. “It starts with people.”

  After college, in the early nineties, Van Sickler followed his parents to Florida, where they had retired in New Tampa. He went to Gainesville for a master’s in journalism—a college class on Woodward and Bernstein, Didion, and other classics of the genre had lit his imagination. When he got out, he was hired by a series of midsize papers around the state. He learned his trade covering city hall, a great sandbox because he made a lot of mistakes. His first story for the Lakeland Ledger was all quotes, because he felt no authority to say anything himself. That was what he wanted to aim for—the certainty of having a subject cold, so that his readers would finish a story knowing what to think.

  In 2003, Van Sickler was hired by the St. Petersburg Times, the best paper in the Southeast—a dream gig. The landscape for newspapers was starting to look bleak. They were shedding jobs, and, in a few cases, folding under pressure from the Web and lost advertising. The Times was doing better than a lot of other papers, and it was destroying its cross-bay rival, The Tampa Tribune, which had been stripped down by its owner, a media conglomerate in Richmond, Virginia, to the level of fishwrap. The Times was owned locally, and it wasn’t a for-profit enterprise—Nelson Poynter had willed his stock to the Poynter Institute for Media Studies upon his death in 1978—so it didn’t have to make the same margins as wounded giants like the Chicago Tribune and the Los Angeles Times, which would soon be carved up by private equity investors in search of bigger profits.

  Van Sickler and his wife, who also worked at the paper, bought a 1930 brick bungalow in Seminole Heights, a historic neighborhood just north of downtown Tampa that was starting to get funky after a period of blight. It brought a taste of those nights walking around the Cleveland Flats, but Van Sickler found the whole “Next Great City” business suspect.

  When he was covering city hall at The Palm Beach Post, he’d gotten deeply interested in urban planning—for a while he even thought about switching careers, until he realized that city planners had even less clout than reporters. But his bookshelves filled up with titles like A Field Guide to Sprawl, The History of the Lawn, Suburban Nation, and the pair that were his bibles: The Power Broker and The Death and Life of Great American Cities. Van Sickler became a Jane Jacobs disciple. She gave a vocabulary to the desire he had felt growing up in Cleveland Heights with no one around on those excruciating summer afternoons: short blocks, pedestrian permeability, mixed uses, safety in eyes on the street, density. Life was richest and most creative where people o
f different backgrounds could meet face-to-face and exchange ideas. And that happened in cities—cities of a particular kind.

  Moving to Tampa clarified all this, especially after 2005, when the paper created a beat for Van Sickler as its planning and growth reporter. The city had seemed fun and full of promise when he was twenty-two, in the early nineties, but by the 2000s it didn’t look to him like much of a city at all: a nine-to-five downtown with about fifty residents, until a pair of huge condo towers that had no relation to the streets but would suck up demand for years to come went up, while all the shopping and Class A office space were miles away in Westshore, near the airport. Tampa had tried to take a shortcut to greatness, but that never worked; its downtown had no coherence, nothing to attract people beyond an office job, a hockey game, or a court case. Riding a bike around town was dangerous, and so was trying to walk across one of the broad, high-speed streets—Tampa ranked second in the country in bicycle and pedestrian fatalities. If you saw someone on foot, his car had probably broken down, and a woman crouched on the roadside for an hour without shelter had to be waiting for a bus. Commuter rail initiatives never got past the county commission, and Tampa Bay remained the second-largest metropolitan area in America, after Detroit, without one. As a result, strangers were never obliged to engage with one another. “No encounters happen by accident in Tampa,” Van Sickler said. “Or if they do, they’re traumatic.”