Economic crash in Oregon boomtown

[Watchman]

Economic crash in Oregon boomtown

By Adam Brookes
BBC News, Bend, Oregon



Adam Brookes reports from Bend, Oregon on the US unemployment crisis

Bend, Oregon was a 21st century American boomtown.

It is a beautiful place, in the high desert of central Oregon, amid mountains.

The sunshine is warm, the air crisp and filled with the scent of bitterbrush and pine.

Its people are gracious, their gorgeous surroundings imbuing them with a certain American languidness.

All these attributes were - in the minds of the city's ambitious planners and businessmen - what would bring the retirees and tourists flocking to Bend. To accommodate them, a boom in housing began.

Boom and bust

The population of Bend quadrupled in under 20 years - from 20,000 to 80,000.

Between 2001 and 2005, the median value of a home in Bend rose by 80%.

By 2005, work was getting underway on 700 new homes each month. Some of the developments are stunning: houses filled with mountain light clinging to craggy hillsides.
When the building stopped, the lifestyle went very fast. It's a lifestyle I don't see coming back
Dan Hardt
Former building contractor


More than 17% of the workforce was employed in construction - far higher than the national average.

In what had once been an isolated lumber and mill town, high-end restaurants and brewhouses opened. Shops selling expensive bric-a-brac bloomed. Massage therapists and hairdressers proliferated.

Downtown Bend looks like a shrine to post-millenial bijou: pricey shoes, scented candles, fancy coffee. There is even a shop specialising in beachwear - despite Bend's location in the high desert.

But when the US slumped, Bend crashed. The value of a home fell 40% in under two years.

And unemployment nearly quadrupled from around 4% two years ago to 15% in the summer of 2009.

"Everything that Bend produced relied on the credit market", says Carolyn Eagan, an economist with the Oregon Department of Employment.

"Construction materials, doors and fittings, recreational vehicles: everything depended on people being able to consume more than they could use."

Now the credit has dried up, and the building of Bend has stopped.

The town is dotted with developments that got underway, and then ground to a halt. They are desolate expanses of weeds, dust and discarded construction materials.

Homeless shelter

In downtown Bend, we met Dan Hardt.

Mr Hardt used to employ 20 people hanging drywall in Bend's new homes. He owned three houses of his own, and a boat. He used to go on elk-hunting trips.

Now it is gone - all of it.

"When the building stopped, the lifestyle went very fast," he told us. "It's a lifestyle I don't see coming back."

Dan now lives at the Bethlehem Inn, a motel converted to an emergency homeless shelter.

"Those who were living at the at the top of the heap and who have fallen to the bottom, they don't know where to go for help, they don't know how to get that help. There's anger and frustration and a sense of entitlement," says Corky Senecal, who heads emergency housing services for Neighbor Impact, and has 30 years experience of providing services for the poor.



"The middle class is where it's really been decimated," she says.

When you lose your job in America, you will receive financial aid from the government. But it is limited. Typically, an unemployed worker in Bend will get state benefits for a period of six months to a year. After that, as many in Bend are discovering, you are on your own.

In addition, the loss of a job frequently means the loss of health insurance and payments into retirement funds. This limited social safety net means unemployment in America can be devastating.

"It's not just the job that stops," says Dan Hardt. "Everything else stops with it."

Ms Senecal introduced us to to Randy Worrell and his 11-year-old daughter, Patty.

Mr Worrell, a burly 42-year-old former firefighter, was laid off from a variety of jobs. He has not worked since the end of last year - and his unemployment benefits have run out.

"I don't know what I will do from one day to the next," he says.

Lesson learned

Neighbor Impact has put him and Patty in temporary accommodation. He will look for work, he says, for six hours a day. And he is deeply sceptical of pronouncements emanating from Washington DC that the US economy is showing signs of recovery.

"Lately it's all, 'the economy is turning around'. No, it's not. At least it's not for us," he says. "I don't think we've even hit rock bottom yet. I think we have some way to go."

Bend, Oregon has a great deal going for it, and will, no doubt, experience some sort of recovery. The population of the city has not noticeably shrunk, which is a good sign.

But no-one expects the housing market ever to revert to its previous, ferocious levels of activity. And many will tell you they have no desire for it to do so, that Bend has learned a lesson about bubbles.

But in the US, joblessness can alter a life trajectory for ever. Seven and a half million Americans have lost their job since the start of the recession.

And unemployment's clawmarks will be visible on the face of Bend, and of the US, for a long while to come.