Foreclosures Being Felt Across the State

the US Conference of Mayors issued an economic impact report today forecasting a nationwide loss in GDP on the scale of $166 billion owing to the "subprime mortgage meltdown."  Of that figure, the report projects $8.3 billion in losses coming from Los Angeles and $5.4 billion from the Bay Area alone. 

The conference of Mayors, to its credit, has been on this issue from the start, issuing a letter to the Federal Reserve back in August encouraging it to step in against predatory lending practices.  That letter was signed by over 60 mayors, 9 from California. 

The San Jose Merc ran an in depth look over the weekend at the impact foreclosures are having on finances at both the state and local levels.  The story, titled "Foreclosures Ravage Neighborhoods and Communities," could not have stated it better.  As perceived affordability enticed homebuyers into new or newly refurbished communities, so has the foreclosure wave hit those locales severely -- and may be turning many a subdvision into near ghost towns. 

While personal tolls the "mortgage meltdown" will take on families throughout California will be severe, the impacts on government cannot be downplayed.  If revenues continue to fall, belt tightening will be the buzzword around city halls in the coming year, and more frightening yet, in Sacramento.

NPR also aired a story this morning on this very issue, interviewing the mayor of Detroit and a Harvard professor who each gave their perspective on the impacts this crisis will have on urban centers across the country.