Hellarity burns - Page 6

How a cauldron of squatters and property owners, stirred by green dreams and the bursting housing bubble, set an unusual Oakland house ablaze

By fall 2007, the two cut side deals with Pal. Burnett settled for $2,000 and DiCaprio for an undisclosed amount. "I realized I couldn't save it alone," DiCaprio says. "I told them to sink or swim."


When Burnett and DiCaprio settled with Pal, the subprime housing crisis was splashing the headlines. Pal's investment was starting to seem more like a loss, but for the first time since he bought the property, it looked like it would finally be his. By November 2007, the remaining squatters dropped the battle for ownership and began bargaining with him for concessions.

By mid-February, Pal was ready to start renovations, and all but two of the squatters had moved out. They made their final plea and Pal gave his last compromise: two more weeks, then they had to go. "He was sure he was going to get the house, so he agreed to let us stay," says a squatter called Frank, who asked not to be named because of his immigration status.

What Pal may not have understood was that he was not the only party still interested in the house. The house was becoming a point of contention among the larger community of squatters and anarchists in the East Bay. Fissures broke around a central question: was it up to those living there to decide the fate of the notorious squat, or did the larger community of radical activists have a say in the property?

As Pal was getting rid of the last people occupying the house, the squatters' conflict came to Hellarity's doorstep. A new group of people came to the North Oakland house, among them a few who had previously stayed at Hellarity, ready to renew the struggle against Pal. Frank, who had been living in the house for seven months, was unhappy about the new arrivals.

"I told them that this kind of action would make problems for me," he says. "I already made an agreement with this guy [Pal] to leave by the end of the month." The new group saw things differently. "We own this place," says Jake Sternberg, the new de facto caretaker of Hellarity, who has since been pushing for the squatters to renew their court case. The discord between the squatters split up the duplex: the two old squatters stayed upstairs while the recent arrivals occupied the lower half.

Two weeks after the new crew moved in, a fire was lit in the upper apartment that burned through the ceiling and the floor. But who did it? Was it a disgruntled squatter who would rather destroy the house than hand it back to Pal? Or was Pal connected to the arson, losing his nerve as a newly energized group of squatters took over and the value of his investment crashed?

If not for the squatters, Pal might have been less affected by the subprime crisis than most property owners. He had no mortgage on the house — he bought it outright — so he wasn't under threat of foreclosure, unlike tens of thousands of other California homeowners. But Pal faced a different threat. It seems likely he bought the house as an investment, and as the market crashed, he was stuck with a house he could neither renovate nor sell, and was left to watch its value tank as he slogged through court proceedings.

For an investor like Pal, the numbers weren't looking good. In March, median housing prices had fallen 16.1 percent compared with those of March 2007, according to DataQuick Information Systems, and home sales declined 36.7 percent from the previous year. In April — for the seventh consecutive month — Bay Area home sales were at their lowest level in two decades, DataQuick reported. And according to Business Week, national home prices will plummet an additional 25 percent over the next two to three years.

On Feb. 17, the day after the new group of squatters moved in, Pal made an appearance at the house. In early March, Sternberg showed me a video he recorded during Pal's visit.