http://www.usatoday.com/…

The mortgage foreclosure crisis has caused a drop in cities’ revenues, a spike in crime, more homelessness and an increase in vacant properties, a survey of elected local officials out today shows.About two-thirds of 211 officials surveyed by the National League of Cities reported an increase in foreclosures in their cities in the past year, according to the online and e-mail questionnaire. A third of them reported a drop in revenues and an increase in abandoned and vacant properties and urban blight.

California cities rely heavily on sales tax revenues since the 1978 passage of Proposition 13, which caps real estate taxes. Riverside faces a $12 million deficit this fiscal year.

“We handle that by essentially not filling positions,” Loveridge says.

Riverside is adjusting the payment schedule of development fees to encourage construction and passed an ordinance requiring the upkeep of homes - even when in foreclosures.

Charlotte is working with the Department of Housing and Urban Development on a program that allows firefighters, police officers and teachers to purchase foreclosed homes at 50% of their listed price.

1. I’d like to see the sources for their claims of a spike in crime and more homelessness and what exactly do they define homelessness as. These people lived somewhere before they bought the house and the bubble hasn’t been going on so long as to have increased the population so much as to fill up all the previous locations. Apartment prices will go up but there are generally plenty of places out there and those prices will likely be less than the mortgage they were paying on the house.
2. What’s the makeup of the foreclosures? Primary homes vs. secondary vs. flippers, etc. From numbers I’ve seen in passing a fairly large percentage (>35%) were extra homes and those looking to flip properties.
3. I doubt very much this has led to an increase in urban blight so quickly. I’ve heard personally that in Brooklyn shops have closed on streets which were completely full before the recession but that isn’t blight.
4. Decrease in revenue? Good. They tax people’s land! How exactly can anyone ever claim you own a property if the State threatens you with violence if you fail to pay them extortion money? The existence of property tax makes us serfs. It’s also what they get for pegging the taxes to the worth of the land on the market. They are looking to push out those who can’t afford it and bring in those who have more money so they can bring in more tax revenue directly and indirectly.
5. “Not filling positions.” They won’t actually cut back… just not expand the government more… at this time. They create the environment for this whole thing to occur and when everyone else is reaping what they sowed they get off by not even having to shrink personnel. They may cut services… only because the credit market is making it difficult to put their taxpayers in greater debt.
6. “[P]rogram that allows firefighters, police officers and teachers to purchase foreclosed homes at 50% of their listed price.” The homes are already cheaper because of the bust. Why should these social workers get any sort of government handout when the rest of us are already paying for this problem? So we get services cut, keep the personnel and therefore the tax increases, our home prices drop, and now our increased taxes are going to go to buy those who are bottom actors in the system which caused the problem and won’t even cut personnel costs? And really… 50%?

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