It’s amazing to think in terms like this. Nowadays we all have foreclosures dotting, peppering, or downright plastering our neighborhoods. We have grown accustomed to terms like ‘loan modification’ and ‘short sale’.

But if we looked at the number of foreclosures owned by just one entity such as Fannie Mae, the aggregate appearance is just pitiful. As Reuters put it:

Fannie Mae said on Monday that the housing finance company has taken over so many homes through foreclosures that if it were a town, it would be bigger than Dayton, Ohio.

It is also on track to pass Richmond, Virginia, this year in terms of the number of houses, and would crack the top 100 municipalities as ranked by DataPlace, a web-based source of housing and demographic data.

As a record number of Americans lose their homes during the worst housing crash since the Great Depression, Fannie Mae now owns 67,519 homes.

The company, which the U.S. government placed in conservatorship in September following record losses, said in its third-quarter earnings that its inventory of foreclosed properties rose by nearly a quarter in three months and more than double from a year ago.

That puts it on par with cities such as Chattanooga, Tennessee, and Providence, Rhode Island, in terms of number of households.

The company is working hard to clear the inventory. On its website it lists dozens of homes in Detroit selling for next to nothing. One listed at $1,900 entices buyers with “100 percent financing,” a ploy with what might be described as a tarnished reputation in the United States.

Yet it seems to be working. A two-bedroom, 1,900 square foot house on Seminole Street is listed as “under contract.” The price? $50.

Enter the world’s largest Ghost Town. Apply for your own zero-down, low-interest loan today! The home of other’s dreams can be yours today!

And if things keep up, someone else’s tomorrow.

Tags: Fannie, Mae, foreclosure, loan, modification

However, what so many are forgetting about is that the crux of the issue regarding house pricing and the worth of derivatives based on home mortgages still revolves around one factor that is fixed and cannot easily change: Inventory.

If the goal is for house prices to stabilize so that folks so upside down on their homes they end up walking away will be able to stay in their homes, you won’t get there as long as there are empty homes littering every neighborhood out there.

If the plan works, it will attack the central cause of American economic distress: the continued plunge in housing prices. If banks resumed lending more liberally, mortgages would become more readily available. That would give more people the wherewithal to buy homes, lifting housing prices or at least preventing them from falling further. This would prevent more mortgage-linked investments from going bad, further easing the strain on banks. As a result, the current downward spiral would end and start heading up.

“It’s easy to forget amid all the fancy stuff — credit derivatives, swaps — that the root cause of all this is declining house prices,” Mr. Blinder [Binder is an economist at Princeton and a former vice chairman of the board of governors at the Federal Reserve] said. “If you can reverse that, then people start coming out of their foxholes and start putting their money in places they have been too afraid to put it.”

…

Yet these institutions are deeply intertwined with the American economy. When the financial system is in danger, it stops investing and lending, depriving people of financing for homes, cars and education. Businesses cannot borrow to start up and expand. [NYTimes]

The credit crunch recently has definitely been a problem. With it being harder to make money selling a mortgage off to other markets, banks are less apt to help people with money to purchase that house. However, as we realize what caused this, we’re also starting to see an aversion to 100% no-money-down lending. That will not change for the most part. While banks may be willing to lend again, they still won’t repeat at least one mistake and lend to those with no money to put into the mortgage loan.

With inflation poised to explode as a result of this recent bailout, people aren’t making more to compensate, and thus the pool of folks obtaining mortgage loans will continue to decrease. The homes on the market that are currently empty will not be filled up by magic buyers. The fundamental problem is that many people today cannot afford their first house if it means having to put money down.

It is important to remember that at the peak of the housing market, there were enough houses built for every everyone–owner-occupiers, speculators, and even their dogs–and no one worried much about the credit worthiness of the dog. In addition, even though builder activity has slowed greatly– they continue to build.

…

A number of factors have slowed the housing market. One, a slowing economy and rising unemployment has slowed demand. Household formation has slowed. Also, we need to remember that the housing market isn’t the only consideration- there is also the commercial market to consider. The demand for commercial space has slowed as well. Two, lending standards have tightened- not only are the speculators and the dogs out of the market, but many owner-occupiers who couldn’t afford homes are in trouble also. Three, and I believe most importantly, there has been a fundamental shift in the way Americans view their homes. It is no longer an “ATM-retirement account-road to riches”. It is now a place to live. Granite countertops are no longer an “investment.” “McMansions” no longer make sense. This is causing a fundamental shift in the way Americans use their money and their credit.

The goal of the bailout is purportedly to allow credit-worthy borrowers access to the capital they need. Even if that goal is achieved, remember that our pool of homes was built for both the credity-worthy and the uncredit-worthy. There is no longer a financing plan in place for the speculators, their dogs, and the uncreditworthy. Even many of those who were formerly creditworthy are losing jobs and are facing foreclosure. Those homes are going to remain vacant and continue to go into foreclosure- and that will continue the downward pressure on prices. For commercial interests, even the credit-worthy are going to have a hard time justifying projects in glutted markets.

Home prices WILL continue to fall- this bailout will not stabilize the market- and I doubt it will even slow the decline. The same will hold true for commercial projects. Both of these have been built to excess. In an economy where businesses are failing and downsizing, it is clear that there will be a huge excess capacity of commercial space. All of this will weigh on the balance sheet of lenders.

This bailout is a bandaid – and an expensive one. [twist]

This point isn’t lost to everyone. On CNN the other day, Ron Paul exclaimed how this $700 billion bailout won’t be enough and we’ll see the government crawl back for their next fix. Being already invested, like with the Iraq War, we’ll give it to them because it’s too late to turn back.

When it’s worse to own a home than rent one, it’s time to let the market work and let the foreclosure process happen. If an limb has gangrene, you can’t fix it by putting some Neosporin on it. Sometimes the truth hurts and we need to be prepared to deal with that.

This is where Proposition 100 comes into play. Dubbed the “Protect Our Homes Act”, Prop 100 aims to prohibit the government from charging new taxes on the sale or transfer of real estate in Arizona. Arizona currently has no real estate transfer taxes (RETTs), unlike 35 other states which do.

Here’s a link to the official PDF which gives more details on the amendment:

Be it enacted by the People of the State of Arizona:

1. Article IX, Section 24, Constitution of Arizona is proposed to be added as follows if approved by the voters and on proclamation of the Governor:

ARTICLE IX, SECTION 24, PROHIBITION OF NEW REAL PROPERTY SALE OR TRANSFER TAXES

THE STATE, ANY COUNTY, CITY, TOWN, MUNICIPALITY OR OTHER POLITICAL SUBDIVISION OF THE STATE, OR ANY DISTRICT CREATED BY LAW WITH AUTHORITY TO IMPOSE ANY TAX, FEE, STAMP REQUIREMENT OR OTHER ASSESSMENT, SHALL NOT IMPOSE ANY NEW TAX, FEE, STAMP REQUIREMENT OR OTHER ASSESSMENT, DIRECT OR INDIRECT, ON THE ACT OR PRIVILEGE OF SELLING, PURCHASING, GRANTING, ASSIGNING, TRANSFERRING, RECEIVING, OR OTHERWISE CONVEYING ANY INTEREST IN REAL PROPERTY. THIS SECTION DOES NOT APPLY TO ANY TAX, FEE,OR OTHER ASSESSMENT IN EXISTENCE ON DECEMBER 31, 2007.

The key reason this is so important is because while the government’s bills have grown, the average Arizonan’s wallet has not. Rampant inflation, mortgage loan fraud, and a growing credit crisis, simply do now allow Americans to take on more debt at this time, even in the form of increased taxes.

Additionally, as difficult as it is to sell a house in this market and as difficult as it is to avoid foreclosure right now, increased taxation on the transfer of property will add one more bill you have to factor in when you’re already more than likely to be well upside down. Not to mention that “transfer” is a very broad term which will include estates and further burden the family house as it’s passed down to the kids or other family members. There are already burdens in that process and the government should never find it in its own interest to make losing a home easier.

Other agents in Arizona are also against this and are writing about it as well. As Jay Thompson put it on his blog:

A YES vote on Proposition 100 would amend the State Constitution and prevent the possibility of a real estate transfer tax from being implemented. A no vote means state and local governments could implement a RETT at just about any time (in fact, it has been discussed across the state. A bill was introduced in the Legislature last year proposing a RETT).

There is additional information on Prop 100, also known as the Protect our Homes Act, at www.ProtectOurHomes.com.

I won’t be so bold as to tell you how to vote. That is a personal decision only you can make. My vote will be YES on Prop 100. Some states are attempting to repeal existing real estate transfer taxes. Good luck with that. My opinion is it will be a whole lot easier to prevent such a tax before it happens than to repeal it once enacted. The 342,000 that signed petitions to place the initiative on the ballot seem to agree. But signing a petition and pulling the lever in the voting booth are two different things. If you signed the petition, thank you. Just please don’t forget to finish the job.

For an example of how this tax affects families both trying to obtain their first home, or get out of a bad situation without going through bankruptcy or foreclosure, a real estate agent in Connecticut grants some insight:

Home sellers in Connecticut pay a conveyance tax when they sell. The median home in CT sells for about $250,000 and the real estate conveyance tax on the median home would be about $2000, more if you live in one of the 18 towns that can charge you an extra .25% or an extra $500.

The tax was raised a few years ago, temporarily, to help solve a budget shortfall but keeps getting renewed. Municipalities are desperate not to lose this tax because it’s easy money and most home sellers forget about it until the closing table.

The increase in the tax is supposed to sunset, rolling back to its original amount – saving future home sellers around $400 based on the median sales price of $250,000. It’s not a lot of money but the principle is simple:

If the tax was supposed to be temporary, legislators have an obligation to roll it back.

And with all the talk about rescuing homeowners these days from subprime mortgages, what about rescuing homeowners who are responsible enough to sell their homes before the bank forecloses on them but have to walk away owing the bank and the government money?
From whom do they need rescuing?

In Tuesday’s Hartford Courant, a letter to the editor appeared from the Executive Directors of the CT Conference of Municipalities and the Capitol Region Council of Governments – two groups that lobby for town and municipal governments. Here’s what they had to say:

“…the special-interest real estate lobby which seeks to portray itself as the homeowner’s friend by lobbying to deprive municipalities of up to $40 million in needed revenue next year.

That’s right – the same for-profit Realtors who take up to a whopping 7 percent cut of any home sale want to slice $40 million in non-property-tax revenue by reducing the municipal share of the conveyance tax. That means a direct shift of that amount onto the back of the property tax – Connecticut’s most overused and income-insensitive tax.”

Well, I was pretty mad so I wrote a letter to the editor and it appears in the Hartford Courant today, May 29. Here is most of my letter:

‘Although Mr. Finley and Mr. Wray tried to dismiss Realtors like me who disagree with them as part of the “special-interest real estate lobby” and “the same for-profit Realtors who take up to a whopping 7 percent cut of a home sale,” Realtors are leading the fight to protect our clients’ home equity.

Note: Realtors are often the only professionals involved in a real estate transaction willing to negotiate their fees, which, for the sake of accuracy, are not typically 7 percent of the sales price.

However, I would like to present the only opinion that really matters – that of the homeowner and, in particular, the homeowner selling today.

In today’s market, more and more homeowners owe more on their homes than the homes are worth. More often than not, these are homeowners in areas with a high rate of foreclosure, a declining median sales price and a shortage of qualified buyers. These homeowners face some tough options: come to the closing table with money, negotiate a short sale, which affects their credit, or allow the bank to foreclose, which affects their credit even more.

…

The real estate conveyance tax should be rolled back to its original amount – not because it will help Realtors but because it will help homeowners.’

Currently, Arizonans don’t have to fight these fights (although we do have our own battles). As someone who has been through the scary process of almost losing their house, I don’t see this as a fight we should have to undertake.

To use a food analogy, it is always easier to simply eat LESS. Finding MORE food to eat, however, is what starving families all over the world die trying to do. With illegal immigration and a growing housing problem, I say Arizona already has plenty to worry about.

Tags: arizona, property, tax, foreclosure, fraud

And for the most part they were right. But the economy didn’t stabilize (even for agents) as hoped, mortgage rates were already too low, and many mortgage loans were wrapped into tricky packages like Option ARMs and other types of non-standard formats, some that enticed buyers solely on discounts. As these events took their toll, it was only a matter of time before the foreclosure creep started moving inland affecting larger metro areas of Phoenix, Tempe, and other long established markets.

Foreclosures across metro Phoenix number 16,647 for the first half of the year compared with 9,966 during all of 2007 and 1,070 in 2006.

Last summer, when foreclosures were just starting to climb, the highest rates of home defaults were found on the Valley’s more affordable fringes. The problem worsened, hitting a wider swath of homeowners who bought at the peak of the housing boom through subprime loans. Although some of the Valley’s fringe areas such as Surprise, Anthem and Buckeye continue to have high foreclosure rates, the problem has moved inward.

“It has become more of an equity problem than a subprime problem,” said Tom Ruff, a real-estate analyst with Information Market.

An equity problem is exactly what this is too. Many new home builders immediately started undercutting recent buyers by adding large incentive deals to buy new rather than slightly used. Added to price cuts, there was no way for a new home buyer to sell their home without already having put in 20% or more down as a down payment or taking a loss on the house.

Many of the homes going into foreclosure were bought or refinanced during the peak of the housing boom in 2006, according to property records. Home prices are down almost 30 percent from that time, so many people struggling now owe much more than their home is worth. The median resale price today is $210,000.

Notice of trustee sales, or pre-foreclosures, also continue to climb. There were 35,111 pre-foreclosures filed in Maricopa County through July. That compares with 30,166 for all of 2007. When pre-foreclosures stop climbing, foreclosures could peak a few months later, Ruff said.

Other parts of the country have already hit their foreclosure peak.The troubling trend of homeowners walking away from homes they are upside down on also persists and is pushing up foreclosure figures in the Valley, according to real-estate agents and housing counselors. These are homeowners who may be able to make payments but don’t want to continue to pay a mortgage for $50,000 to $100,000 more than their house is worth now.

As long as foreclosures continue to rise, home prices are likely to fall.

Indeed, home prices are starting to fall. But there are some very important things to remember about buying a home in this new market. Many homes were picked up off the foreclosure block, in an auction, or on the other side of a short sale. Many of these homes have sat dormant for months if not years, and may have problems that don’t appear obvious on first glance. One more reason a home inspection pays for itself in today’s market. Buyers would be wise to make sure they have something to cover their rears when something breaks. It’s no secret the banks won’t be there. They’re having their own problems.

Tags: foreclosure, arizona, mortgage, loans, prices

It doesn’t seem to be without merit either. If there’s a reason that it seems more real here in Arizona than in other places – it’s because it is.

The foreclosure crisis continues to gather steam, as April filings—defined as default notices, auction sale notices, and bank repossessions—spiked almost 65 percent from the same month last year, according to RealtyTrac’s most recent U.S. Foreclosure Market Report.

All told, 1 in every 519 American households received notice of a foreclosure filing in April, up from 1 in every 538 households in March.

RealtyTrac CEO James Saccacio had this to say in a statement:

The total number of U.S. properties with foreclosure activity in April was the highest monthly total we’ve seen since we began issuing the report in January 2005…. Areas of California, Florida, Nevada, and Arizona continue to be particularly hard-hit.

Here’s the official breakdown:

Top 10 Foreclosure States

1. Nevada – 1 filing per 146 households
2. California – 1 filing per 204 households
3. Arizona – 1 filing per 224 households
4. Florida – 1 filing per 242 households
5. Colorado – 1 filing per 349 households
6. Maryland – 1 filing per 380 households
7. Georgia – 1 filing per 422 households
8. Ohio – 1 filing per 432 households
9. Michigan – 1 filing per 440 households
10. Massachusetts – 1 filing per 539 households

Tags: foreclosure, arizona, filing

Now, you have to ask “bad for whom?” and then it becomes a personal issue. Some folks will toss ethics in there and say that walking away is unethical and to a point I agree. But the “just business” nature of contracts also means that if you don’t make payments, the bank never feels unethical by taking your house back either.

So there’s definitely two sides to the coin.

Nassau’s foreclosure-related filings last month jumped 113 percent from a year ago, higher than the national average increase of 65 percent, according to RealtyTrac, a California-based online market for foreclosures.

The county’s 14 percent increase in filings from March to April this year also exceeded the national, month-to-month average increase of 4 percent, the report said. Nassau last month had 502 filings, which include default and auction notices — 442 in March and 236 in April 2007, according to RealtyTrac.

Broker David Farrell, who on Saturday took house hunters on his first Long Island Foreclosure Tours in Nassau, said the higher figures reflect the bigger price increases in Nassau home sales during the boom years. Suffolk’s rise in prices had been tempered by new-home construction, but Nassau has less buildable land left, he said.

People who bought high during the hot market of three and four years ago now see their property values falling and are walking away from houses with mortgages worth more than their homes, Farrell said.

“We don’t have massive job losses, nothing along the lines that would trigger this,” he said. “We have a fact where people now say ‘I have a house. I paid $600,000 for it, and my next-door neighbor is paying $429,000. What am I doing here?’

“Last year at this time, people would ask you about foreclosures and you’d say ‘Yeah, there are dozens of foreclosures, but there’s no use to them because they’re basically priced the same as the house next door.’ Now, all of a sudden, it’s insane. We went to a house in East Meadow, where the house next door was the identical split at $549,000 and we had the foreclosure to the right of it and it was $429,000.”

Suffolk’s 734 filings in April was a 43 percent jump from the 513 a year ago and 6 percent jump from the 695 in March, RealtyTrac reported. In Queens, the filings grew 22 percent in a year — from 761 to 926 — and 11 percent from March’s 836 filings.

Remember folks, the housing bubble is more than median prices and how many days on market a house sits for. Issues and behaviors will also continue to shape the decline and influence the pace of any upcoming recovery.

Tags: new, york, foreclosure, nassau, jingle, mail

But the truth is that you still have to ask a few basic questions.

There are several strands to the market’s optimism about an early V-shaped economic recovery. Among these is the fact that, while certainly not good, the various US macroeconomic indicators, like GDP growth and employment, for the first quarter of the year were not nearly as bad as the Cassandras had led us to fear.

…

Valid as these arguments might be, they totally overlook the fact that the US economy is still being adversely impacted by the very same three negative shocks that caused the US economy to go into a funk in the first place. Worse still, it would appear that at least some of these adverse shocks are now intensifying.

What are those three negative shocks?

Are US house prices at the national level now not declining at an accelerating pace in a manner that has no precedent in the past seventy years?

Have not international oil prices dramatically risen to around US $125 a barrel, or approximately double the level that they were a year ago, thereby more than offsetting the US government’s tax rebate program?

And is the US financial system not still in the throes of what Paul Volcker has referred to as the “mother of all credit crises”, as vividly illustrated by the Federal Reserve’s recent still very gloomy survey of bank lending intentions?

There’s no doubting the first question. We’ve seen proof of that in all of our neighborhoods recently.

The second is a bit more convoluted and complex, but we end up noticing the end result of higher gas prices each time we make a trip to fill the tank.

And the third, is something that the Ron Paul campaign has continued to preach about for some time now. Whether you agree that the Federal Reserve should be eliminated or disagree – there’s no doubt that we’ve seen that lowering rates has NOT helped the situation.

Over the past year, declining home prices have already wiped out around US $2.5 trillion in US household wealth. They have also caused analysts to raise their estimates of the potential losses to the financial system from mortgage lending to US $500 billion. This has effectively put an end to the ability of households to use their homes as ATMs to finance their consumption spending. It is little wonder then that US consumer sentiment has plummeted to multiyear lows.

Sadly, the immediate outlook for US home prices is grim. At present an estimated excess inventory of around 1 million unsold homes is weighing heavily on the housing market. Compounding this situation of excess supply is the fact that private sector mortgage lending has all but dried up in the wake of large sub-prime mortgage losses.

Worse still, a rapidly increasing rate of foreclosures is substantially adding to supply on an already glutted market. And there is every prospect that the foreclosure rate will continue to increase as declining home prices boost the number of households with negative equity in their homes to around one third of all households by the end of the year.

…

To be sure, policy measures have been introduced to stimulate the economy in the form of a US$170 billion tax reduction package and Federal Reserve interest rate cuts totaling 3 1/4 percentage points. However, with the very real prospect of the US economy sliding deeper into recession, one might ask whether enough has been done to cushion the economy from America’s largest housing market and credit market bust since the Great Depression.

No matter how you slice it – this quote puts things into perspective. It’s a dog-chasing-tail scenario and for us to call things based on the change in one side of it, is anything but responsible:

“A very real danger of rapidly declining home prices for the US economy is that it raises the real risk of creating an adverse feedback-loop. For as declining housing prices reduce consumer wealth and add to the financial system’s losses, they push the economy further into recession. Yet as the economy slides deeper into recession, it exacerbates the downward spiral in housing prices.”

Tags: ron, paul, federal, reserve, credit, crisis, recession, tax, rebate, checks

It’s a crushing feeling when you find the value of your house is less than what you paid for it. Even if you never took out a home equity loan, made payments as usual, and have a very valid reason to sell like a death in the family, loss of a job, etc.

Mortgage delinquencies will continue to rise over the next six to 12 months as home prices decline and economic conditions remain difficult, according to one forecast released Monday.

The Core Mortgage Risk Monitor (CMRM), an index of foreclosure risk compiled by real estate data analyzer First American CoreLogic, increased 16% compared with the same period last year.

CoreLogic analyzes house price trends, foreclosure rates, economic health factors and fraud propensity to predict the chances that future mortgage delinquencies will occur.

The index, which has increased over the last four quarterly reporting periods, is now 47% higher than it was in the first quarter of 2002 when the last recession was winding down.

Nationwide, the markets with highest levels of delinquency risk also had double-digit declines in home prices and weakening labor markets.

“House price depreciation factors are now outweighing economic stress factors,” said Mark Fleming, CoreLogic’s chief economist.

…

“High house price markets are now high risk markets,” said Fleming.

Falling home prices have created a vicious cycle: Lower prices lead to more defaults, resulting in excess inventory, which causes demand to fall, bringing home prices even lower, leading to more defaults.

This downward cycle puts pressure on the broader economy, with declining home prices impacting personal wealth and consumer confidence.

Tags: real, estate, home, prices, foreclosure, mortgage, default

The median price for a single-family home in the U.S. dropped 7.7 percent in the first quarter, the biggest decline in at least 29 years, as values tumbled in two-thirds of U.S. cities, the National Association of Realtors said.

The median, the point at which half the homes sold for more and half for less, was $196,300, down from $212,600 a year ago, the largest decline in records going back to 1979. Sales of single-family houses and condominiums fell 22 percent to 4.95 million at an annualized pace, the slowest in a decade, the Chicago-based group said in separate reports today.

Home prices are falling as foreclosed properties reduce the value of nearby real estate, said Lawrence Yun, the realtor group’s chief economist. U.S. foreclosure filings more than doubled in the first quarter from a year earlier, Irvine, California-based RealtyTrac Inc., a seller of foreclosure data, said in a study released April 29.

“Foreclosures throw more supply on the market and accelerate the price declines that have already taken place,” said Michael Darda, chief economist at MKM Partners in Greenwich, Connecticut.

Homeowners who live near a house repossessed by a lender will see their property values drop an average of $5,000, according to the Center for Responsible Lending. Nationally, foreclosures will result in $202 billion of lost real estate value, the Durham, North Carolina-based group said.

Price Declines

There were 4.06 million U.S. homes for sale at the end of March, 40,000 more than the prior month, the Realtors association said in an April 22 report. At the current sales pace, that represented 9.9 months’ worth, up from 9.6 months’ worth at the end of February.

“Prices have fallen in neighborhoods with a wide prevalence of subprime loans, because more foreclosed properties are being sold at discounted prices,” Yun said in today’s report.

The median price for a single-family home fell in 100 of 149 metropolitan areas studied by the Realtors group. The biggest declines were in Sacramento, the capital of California, which had a 29 percent drop, followed by the metropolitan area around Riverside and San Bernardino, with a decline of 28 percent.

The Biggest Losers

Lansing, Michigan, had a 27 percent drop in prices, and San Diego tumbled 23 percent, according to the report.

Home sales fell in 46 states and the District of Columbia in the quarter. Three states had increases and one, New Hampshire, did not have data available, the trade group said.

Maryland had the biggest U.S. sales decline, at 39 percent. The District of Columbia tumbled 35 percent, Utah fell 34 percent, and California dropped 33 percent, according to the report.

[full article]

Tags: foreclosure, real, estate, price, decline, crash

I wonder if $50,000 is enough to do the trick though.

Youngstown, Ohio, has seen its population shrink by more than half over the past 40 years, leaving behind huge swaths of empty homes, streets and neighborhoods.

Now, in a radical move, the city – which has suffered since the steel industry left town and jobs dried up – is bulldozing abandoned buildings, tearing up blighted streets and converting entire blocks into open green spaces. More than 1,000 structures have been demolished so far.

Under the initiative, dubbed Plan 2010, city officials are also monitoring thinly-populated blocks. When only one or two occupied homes remain, the city offers incentives – up to $50,000 in grants – for those home owners to move, so that the entire area can be razed. The city will save by cutting back on services like garbage pick-ups and street lighting in deserted areas.

…

“We’re one of the first cities of significant size in the United States to embrace shrinkage,” said Williams.

It’s an odd way to pioneer. “The American narrative always includes growth,” said Hunter Morrison, Director of the Center for Urban and Regional Studies at Youngstown State University, which works closely with the city on plan 2010′s implementation. “No one wants to talk about shrinkage. That’s too threatening to politicians, civic boosters and Chambers of Commerce.”

The demolitions can yield stark contrasts. In many neighborhoods, blocks have more empty lots than buildings.

…

Ideally, all this energy surrounding 2010 will help turn the city around. It does have a lot going for it, including Youngstown State University, which attracts creative-class types like artists and writers and other intellectuals, as well as museums and an excellent public library.

The cheap residential and commercial real estate can be a draw. Start-up companies thrive on low overhead, and employees can easily find housing just minutes from work.

At the very least, the 2010 plan has changed residents’ perspective, said Hunter Morrison. “It’s getting us to think about where we’re going into the future, rather than where we’ve been in the past.”

[full article]

Tags: jingle, mail, mortgage, housing, foreclosure, debt