Saturday, July 26, 2008

Juxtapositions: Foreclosures and Candy Spelling's New Penthouse

The Los Angeles Times very kindly handed me a blog post on a platter this past week.

Roger Vincent reported in the July 22nd edition that Candy Spelling, widow of Aaron Spelling, has purchased a new condo for $47 million. That translates into a whopping $2,848 per square foot for the two-storey, 16,500 square foot residence at the top of a Century City tower that's still under construction. This is how down-sizing works at the top of the food chain.

Twenty years ago, the Spellings built LA county's largest home (56,500 square feet with 123 rooms) and took a lot of flak for it at the time. "The Manor," as it was called, was deemed offensively extravagant by many. I found this to be rather amusing criticism from a community in which the term "over the top" must have been coined -- and in the 80s, yet, a decade in which greed was "good" and advertisers proclaimed that we all needed to wear gold because we're "worth it." Ah, show biz.

On the other hand, while Mrs. Spelling was formulating her plan to change residences, "more than 1% of US households were in some stage of foreclosure in 2007," according to Seeking Alpha's February Housing Market Tracker post. reported that nationwide foreclosure activity jumped 97% in December of 07, and here in California the picture was particularly bleak:

"With a total of 481,392 foreclosure filings on 249,513 properties during the year, California documented the highest number of foreclosure filings and the most properties in some stage of foreclosure in 2007. The state’s total foreclosure filings more than tripled from 2006, and the state’s 2007 foreclosure rate — 1.9 percent of its households entering some stage of foreclosure during the year — ranked fourth highest among U.S. states." (Nevada was highest at 3.4%.)

The situation has not improved in 2008; witness the Fannie Mae/Freddie Mac bailout.

LA Times writer, Tim Rutten, mused on the meaning of this "new low in the high life" in his July 23rd column:

"As Candy Spelling's condo deal illustrates, so much wealth in the U.S. is concentrated in so few hands . . . Recent data suggest that the richest 1% of U.S. households -- those with annual incomes of $348,000 or better -- now control 34.3% of the nation's net worth, while the bottom 40% of households dispose of just 0.2% of America's wealth."

Rutten calls this a new "Gilded Age." Harvard Magazine reinforces this comparison with an article in July's issue entitled, "Unequal America:"

"Income inequality has been rising since the late 1970s, and now rests at a level not seen since the Gilded Age—roughly 1870 to 1900, a period in U.S. history defined by the contrast between the excesses of the super-rich and the squalor of the poor."

The article is long but fascinating reading, covering everything from speculation regarding the effects of the disparity on the democratic process to the fact that life expectancy actually has decreased recently in some U.S. counties.

There seems little doubt that the fabric of our country's economic distribution system is shredding. The situation requires massive change unless we're content to descend into a society resembling that of feudal lords and starving peasants.

Of course, it's unlikely that the lady of "The Manor," Candy Spelling, will ever be feeling any economic pain. True, she'll be leaving behind the family manse with its 11 bedrooms, 16 bathrooms, the gift-wrapping room, the doll museum, the screening room, etc. That means that she'll certainly have to unload quite a few possessions to squeeze into a condo with less than a third of the space of the former homestead.

Wonder if there's going to be a garage sale . . .

© 2008 Cynthia Friedlob


Alex Fayle said...

Wow! I quite happily live in 250sq ft with my boyfriend. I can't imagine having that much space (or even remotely understand spending that much money).

It really is sad to see how much the rich-poor gap has grown and those figures are downright scary!

Cynthia Friedlob said...

Hi, Alex --

Yes, it's pretty hard to comprehend. It's also a challenge to understand how totally out of touch with reality many extremely wealthy people are and how they justify their excesses to themselves.

Thanks for your comment.

(And, yes, I did receive your survey, but need a bit of time to think about it. I appreciate your patience!)