About Brooktrails

Within the various interest groups concerned about Brooktrails are misunderstandings, some of which have become conventional wisdom.

One of those misunderstandings is that there is a building moratorium within Brooktrails. That is not true today nor in the foreseeable future.
 
But more insidious misrepresentations of the truth are more frequently heard in a kind of cycle related to the economy. Among many “old timers” who are not Brooktrails residents or property owners, some disdain is expressed using terms like “real estate scam.” Two facts when considered in isolation have led to a false sense of validation of this type of criticism over the years.

The “Problem” with Brooktrails - Part 1
First there was the development itself. With the approval of the Mendocino County Board of Supervisors, the Brooktrails Company Ltd. did subdivide the land into 6,000+ parcels. It is important to note that by 1972 they had sold almost all the parcels. The target market was the American middle class homeowner. In Brooktrails a second home, a vacation home, seemed available to the many instead of the wealthy few. It was a feasible goal with affordable lots and mortgage rates hovering around 7.5%.

Unfortunately in 1973 mortgage rates started climbing, hitting 18% in 1981. It was part of an overall severe 1973–75 recession and included the 1979 energy crisis. The best way to understand the situation for Brooktrails in the late 1970's is to think of collapse of the housing market in 2008.

Many people “walked away” from their Brooktrails lots in the late 1970's. They quit paying their property taxes and assessments. The most significant impact of this was on assessment bonds issued by the County of Mendocino that funded roads and other improvements.

Was this actually the result of a “real estate scam” as some would say? For those Brooktrails residents who live in homes built during that early period as this writer has for over 25 years, our answer is “obviously not.” For a person who walked away from a lot, calling it a “scam” helped to rationalize a set of personal events that began with their buying the lot and ended up with a financial loss.

If you own one of the lots today, the current extremely low mortgage interest rates actually would permit one to own a second home at a relatively low cost. But that doesn’t mean you should start construction tomorrow. 

One thing seems fairly certain - the developer of Brooktrails had a vision for middle class Americans. That vision is not different from the recently promoted “ownership society” model that collapsed with the economy in 2008.

This is a constantly repeating cycle in our economy. Brooktrails was, and may be, more vulnerable to economic downturns than most communities. But that is a problem to solve. It isn’t because the hyleopolis vision was a scam.

The “Problem” with Brooktrails - Part 2
Faced with a potential default on bonds issued by the County for Brooktrails development, a few in Brooktrails working through the District in the late 1970's sought someone to market the tax defaulted lots. The local real estate offices failed to step up. But the idea appealed to the Deerwood Corporation which through an effective marketing program sold the lots, financing the purchase and paying off the tax and assessment defaults. And those lot sales resulted in increased tax revenue due to increased assessments.

It doesn’t take a genius to understand that in 2008, along with the rest of the nation, Brooktrails lots lost value and again owners walked away from them usually because of more pressing personal financial problems. Because of a tax revenue financing scheme known as the Teeter Plan instituted in the late 1990 by the Legislature and adopted by the County of Mendocino, there is again a debt problem for the County due to unpaid taxes and assessments in Brooktrails.

This time around, some have called Brooktrails "a failed subdivision” because of the Deerwood sales program that bailed the County out from the 1970's economic crash. That criticism does not come from people who enjoy living in the Brooktrails homes built on those lots in the 1980's and 1990's. And despite assertions to the contrary, many of us are paying taxes based upon an assessed value established when those lots were sold in the 1990's.

One thing seems fairly certain - the people at the Deerwood Corporation embraced the vision of the original Brooktrails developer, a vision for middle class Americans. That vision is the “ownership society” model that collapsed with the economy in 2008. But the Deerwood Corporation financed many of those lots and, like the County and the District, is still invested in Brooktrails continuing success as the economy begins its recovery.