California dreaming? More like a nightmare

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The term “Californification” is not meant to be a slur on people who move here from California. Instead, with my famous minor in economics, I would like to address “the creeping degradation of our local economy toward the California model.”

Shopko just closed, the Silver Lake Mall (both ends) are closed to retail … Why?

Unemployment is at an all-time low, most homeowners are worth more than ever, so why are local businesses closing?

Some people will blame internet sales. Who could argue with that? When I can’t find something locally, I order from Amazon Prime. Who doesn’t? I’ve heard stories of customers trying on shoes locally to get the right size, then ordering online. (Might I say, “Shame on you!”)

In my humble opinion, Californification means “loss of discretionary income.” That’s what you find in California. After the average family makes their new higher house payment, a higher, longer car payment, and buys necessities such as food and shoes for the kids, that family has a proverbial five bucks left. Why?

In North Idaho and Spokane, homes that once sold for $130,000, with a $564 payment, now sell for $269,000. Same house? “No, it’s four years older and needs a new roof.”

The new payment is $1,290 a month. If you’re lucky, your income went up $200 a month, but your house payment went up $736. That difference doesn’t buy new furniture, a new car, or even a pair of shoes locally.

You can travel the LA basin and see shopping center after shopping center — empty, not one store open. Sure, Walmart and Target will probably survive. They have thousands of stores to defuse the problem. Those big box stores love Iowa, Nebraska, Kansas — anywhere that housing prices are not raping the local economy of its discretionary income spending.

The next chapter in Californification will be “interest-only loans.” In California, virtually all mortgages are “interest-only loans.” That means at the end of a 30-year loan, they still owe as much as they originally borrowed. If that happens in North Idaho, the $269,000 house with a $1,290 payment will be $600,000 with a $3,000 payment, and yes, it will still need a new roof. If you’re lucky, you will still have $5 left at the end of the month.

How can we stop the next chapter in Californification? Make interest-only mortgages illegal in Idaho.

•••

R.H. Duffield is a Coeur d’Alene resident and business owner.

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