COLUMN ONE : Bad Times for a Boom Town : In the ‘80s, Moreno Valley was a model of affordable, if remote, suburbia. Then came the recession. Today, rocked by foreclosures and dashed hopes, the city tries to regain its balance.

With a spirit that harked back to the migration of Dust Bowl refugees to California, Jon and Therese Crupi moved to this residential frontier in 1987, beckoned by the promise of security and the new life they thought it offered.

The Crupis--and a hundred-thousand others like them during the 1980s--fled not drought and dust, but the real estate madness of Los Angeles and Orange counties and the maladies of urban life. In so doing, they created the fastest-growing city in California and a construction boom stoked by middle-class hopes and affordable housing on these onetime potato fields and sheep ranches 70 miles east of Downtown Los Angeles.

Now, the Crupis are learning a bitter lesson of recessionary economics. They owe more on their house than it’s worth after they re-mortgaged it in 1990; they’re six months behind on their payments and they’re thinking about handing the key to the lender and walking away.

Moreno Valley, a boom town in a boom county in a boom decade, has gone bust for the Crupis and thousands of others who stand on the brink of financial ruin. The city, which once seemed a picture-book suburban success story, now offers a cautionary tale for other outlying meccas built on the urban flight of the ‘80s.

So what went wrong?

In some ways, Moreno Valley represents the blooming of a good idea at a bad time. In the 1980s, people seeking an affordable version of suburbia stretched their finances to the limit to enter the housing market.

It was a strategy that made sense when Southern California’s economy was healthy. And lenders cooperated, arranging mortgages with very small down payments. But when the aerospace, real estate and construction industries collapsed a few years ago, these new homeowners’ equity--and the city’s fortunes--fell precipitously. The pendulum swing has left Moreno Valley and many of its residents struggling to regain their balance.

“Some people had higher expectations than were realistic,” said Mayor Bonnie Flickinger.

Adds City Manager Norm King: “There’s no question, a lot of expectations have been dashed, both among residents and at City Hall.”

Life is still good here, they say, just not as good as some people had thought it would be.

Indeed, by many measures, this community, which is entering its 10th year of cityhood, is maturing handsomely now that the construction dust of the 1980s has settled. Trappings of the good life abound: civic and church groups for adults, sports and Scouts for the youngsters. Tidy subdivisions inside cinder-block walls sprawl across the city’s 50 square miles; neatly tailored retail and business centers flank both sides of the Moreno Valley Freeway--California 60.

But Moreno Valley also rates high in areas in which no city wishes to excel. A little more than 1,000 of Moreno Valley’s 22,608 mortgage holders--almost 4.5%--had their homes repossessed in 1993, according to TRW REDI Property Data, which provides real estate statistics to lenders. That is one of the worst rates in Southern California. The value of the defaulted mortgages: $123.3 million.

The rate of default notices was twice that of Southern California as a whole, said John Karevoll, financial editor of Dataquick Information Systems, another real estate database service.

The real estate bust has sent shock waves from the neighborhoods to City Hall.

In June, 1989--riding the development boom--the city luxuriated with $16 million in reserves on a $45-million annual operating budget, reflecting a steady stream of developers’ fees. In 1992, its savings dropped to $2.8 million. Since then, the City Council has eliminated 87 of 301 city jobs and 52 employees were laid off to save $2 million annually. By doing so, the city hopes to have $5.6 million in the bank by June.

The current financial difficulties contrast with the city’s earlier problems--simply keeping pace with the astronomical growth.

The Moreno Valley Unified School District has tried mightily--and for the most part successfully--to add enough classrooms to keep pace with the flood of students, but it is still in need of another high school.

Law enforcement also has suffered in the boom and bust cycle; the city contracts with the Riverside County Sheriff’s Department but can only afford to hire less than one officer per 1,000 residents, giving Moreno Valley one of the lowest policing levels in Riverside County.

In retrospect, Moreno Valley was ripe for the fall.

“A huge portion of Moreno Valley’s homeowners bought when property values were fairly high, and they put down very small down payments,” Karevoll said. “Today, property values have dropped to, or below, the level of the mortgages themselves. Homeowners don’t have any equity left.”

But the view was different in the mid-’80s. Attracted by housing prices half that of metropolitan Los Angeles, these first-time homeowners accepted horrific commutes as the price for freshly built homes, driveways with no oil stains, streets with no gangs and the camaraderie of other young families sharing the same dream.

Moreno Valley was not the only place that drew newcomers chasing the notion that a better life could be found on the fringe of a metropolis. Antelope Valley, Chino Hills, Rancho Cucamonga and Temecula also boomed. Communities like these, spawned in the late 1980s just as the real estate market was peaking, took the hardest hit when the bottom fell out, Karevoll said.

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In some ways, Moreno Valley is still a model suburban community.

The town is flush with youth sports; the local Bobby Sox girls softball team won the national championships last summer on its first try.

Churches--many of them still operating out of storefronts and other rented buildings--far outnumber bars.

Sure there’s graffiti, but it is eliminated within 24 hours by diligent city paint and sandblasting crews who respond to a graffiti hot line.

Uniformed, police-trained citizen volunteers patrol the streets with two-way radios. They not only help thwart crime, police say, but also check on homes when occupants are away and provide traffic control at accidents. The volunteer patrol is so popular that there is a waiting list for the next training class.

There is no civic centerpiece in town, but there is the next best thing: a sparkling, year-old shopping mall that might as well be the town center, complete with security guard towers to watch over the parking lot. Indeed, city officials hold office hours not at City Hall but at the mall’s food court, where they meet with constituents next to the carousel.

Moreno Valley, many say, is still homey, despite the numbers. “I love this town,” said Sheryl Hart, who moved here 8 1/2 years ago from an Irvine townhome and teaches math at the local adult school. “I’ve never been to the mall for more than a half-hour where I don’t run into someone I know. It’s not like Orange County. We’ve still got a small town atmosphere.”

Perhaps so, but things are changing rapidly. From 1980--four years before the city incorporated--to 1990, the area’s population increased from 28,309 to 118,779; today, growth has stalled as it approaches 135,000. The rapid change and declining financial fortunes of the city have exacted a toll.

“A lot of people were first-time home buyers who were already living on the edge who decided to make the move out there and make the (financial) stretch,” said Roger Cruzen, spokesman for Great Western Bank. “That was the theory of the day, before the market hit its peak: To stretch, and get as much house as you could.

“But then these people got even closer to the edge, living from one paycheck to the next to make their house payments.”

The repercussions of sudden growth--followed by its sudden drop-off--have also hit City Hall, which is grappling to catch up to provide streets, services and other amenities for the young city.

Meanwhile, the school district increased elementary schools from seven to 21; grew from one middle school to eight, and from one high school to four. The district still needs one more high school--but doesn’t have the money to build it--and is talking about double sessions.

By its own standards, the city is woefully behind in establishing parks and ball fields--and is working with the school district to share playgrounds and other recreational facilities.

With gang and other criminal activity increasing, law enforcement remains understaffed. Moreno Valley’s rate of serious crime was 76.6 per 1,000 residents in 1992, according to the FBI. That rate was significantly lower than the city of Los Angeles (93.6) and significantly higher than Orange County (56.3).

And the city is still struggling to develop a local job base, hobbled by the recession. A disproportionate number of local residents were employed in defense and aerospace jobs in Southern California, and regional cutbacks have hit hard.

The largest nearby employer is March Air Force Base, which abuts the city’s southwest boundary. But the base’s post-Cold War role has left local officials worried about its future as an employer. For now, the largest private source of jobs in the city is Price Club, with 300 employees; the largest manufacturer is a Rohr Industries plant, where 235 workers build aircraft engine covers.

The state Employment Development Department estimated Moreno Valley’s unemployment rate in November at 12.6%, compared to 11.8% for Riverside County as a whole, and 8.6% for California.

Moreno Valley is still a bedroom community, with three-quarters of its employed residents holding jobs outside the city, according to a City Hall survey. Jobs simply have not followed the residential flood to Moreno Valley, sparking concern about the insidious effects of long hours on the road.

“People are letting their marriages go into remote control, and now they’re eroding,” said the Rev. Bob Mink, pastor of Moreno Valley Christian Church. “The commutes not only take time out of their lives, but add a fatigue to it they don’t always recognize.”

The drop in property values added new financial stresses to families disheartened that urban woes have followed them.

Dowell Myers, a professor at USC’s School of Urban and Regional Planning and a self-described student of the American Dream, says disillusionment typically accompanies the birth of a new community, especially when its residents are overtaken by the same quality of life problems they were fleeing.

“What they bought into just isn’t there anymore,” he said of young families’ dreams and investments. “It’s more congested, the crime has followed them out, and the deal they thought they were getting--the cheapest home around--isn’t a deal anymore. Now they’re in the hole, they’ve still got long commutes, and they’re surrounded by urban problems.”

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Not everyone, of course, has soured on Moreno Valley. Truck driver Dave Allen moved his young family here nine years ago and bought his first house for $67,000; they sold it for double that in 1989 and purchased a larger home for $158,000. Allen said he doesn’t know what the newer house is worth today--and doesn’t care.

“This place has gotten a bad rap--gangs, violence. . . . Well, I don’t see it,” he said. “This is a great place. People who bought here for an investment are eating it. But we moved here to live here, and we love it.”

Some observers think Moreno Valley and communities like it will rebound. Great Western’s Cruzen notes that with property values apparently bottoming out, Moreno Valley is again “an incredibly attractive place for the first-time market. We’re seeing extremely favorable (home) prices. One person’s misfortune is another’s opportunity.”

Among the unfortunate are the Crupis, who thought they were sitting pretty in 1987 when they bought the house, for $83,900, with an FHA loan of less than $5,000.

Jon Crupi already had an hourlong commute to his job as an assistant controller at a Garden Grove company. The drive worsened when the company moved to Irvine and he could find no equivalent job closer to home.

“I asked Jon if he could handle the drive,” Therese Crupi said. “He said, ‘When I pull into the driveway at night and my kids come running out to hug me, I’ll know I’m home, and everything is fine.’ ”

Meanwhile, the Crupis--on a tight budget with mounting bills-- fell further into debt and took out a second mortgage. The house was reappraised at $117,000 in 1990.

Along with the burden of the bigger debt, Jon Crupi was no longer being greeted in the driveway by his children. They were in bed when he left for work, and in bed when he came home. Because of the commute, he was “comatose” in the evening and literally woke up in the morning in a cold sweat, his wife said. Increasing marital stress sent the Crupis into counseling.

The bottom fell out when Jon Crupi’s work began to suffer and he lost his job. In October, he finally found new work, 15 minutes east of here in Beaumont. But the Crupis worry that it might have come too late. They are six months delinquent on their first mortgage. Combined with the second mortgage, they owe $106,000 on a home that is worth less than that, based on the sales of comparable homes in their neighborhood, they said.

“At first glance, this was a great place to live. All the conveniences were here--movie theaters, miniature golf, Mervyns, Toys R Us,” Therese Crupi said. “But with the gangs, all the unsupervised latchkey kids, the (financial) stress . . . well, we’re sick and tired of the American Dream as it relates to this place. We want to get out of here.

“You can’t call us victims of Moreno Valley because we signed up for this,” a resigned Therese Crupi said of her experience. “But now we’re trapped.”

Community Profile

Here is how Moreno Valley residents compare to people living in the rest of Riverside County and California:

Moreno Valley Riverside County California Ethnic Breakdown White 57.1% 64.4% 57.2% Black 13.2% 5.1% 7.0% American Indian 0.1% 0.7% 0.6% Asian/Pacific Islander 6.1% 3.2% 9.1% Latino 22.9% 26.3% 25.9% At Work Residents in labor force 72.9% 61.3% 67.0% Income and Housing: Median household income $42,186 $33,081 $35,798 Owner-occupied homes 72.6% 61.6% 51.2% Median monthly mortgage $1,106 $1,050 $1,077

Source: 1990 U.S. Census