SOURCE: League of California Cities

July 02, 2008 16:52 ET

League of California Cities Supports Federal Legislation to Help Cities Recover From Effects of Mortgage Crisis

SACRAMENTO, CA--(Marketwire - July 2, 2008) - To combat the negative effects of the nation's mortgage crisis on California communities, the League of California Cities is urging the state's Congressional delegation to support legislation, the Housing and Economic Recovery Act of 2008 (HR 3221), that includes $4 billion for cities that can be used to purchase and rehabilitate foreclosed properties, as well as assist low and moderate income households purchase these properties.

California has the highest total foreclosures of any state. In 2007, there were 481,392 foreclosure filings on 249,513 properties, more than triple the number in 2006. These foreclosures will cost Californians an estimated $67 billion in lost property values, and local governments are likely to see a decline of $4 billion in collected property, sales and transfer taxes.

Many California cities are already experiencing significant revenue shortfalls. As the crisis expands, they are facing serious difficulties in stabilizing affected neighborhoods. Federal funding will help cities and towns overcome the blight caused by vacant and abandoned homes and combat crime associated with a rise in vacant housing.

"California cities have been hit hard by the foreclosure crisis," said Chris McKenzie, the League's executive director. "They have cut local budgets and services. They really need help dealing with this problem. It is time for Congress to act."