The United States Conference of Mayors meets in Washington, D.C., this week. Top on their agenda is the economic pressures placed by the subprime mortgage market, which has left cities with scores of vacant houses and has severely impacted city budgets due to loss of property taxes.
The mayors are calling for federal aid to stem the losses and stabilize neighborhoods. The actions that are recommended are to increase loan limits for Fannie Mae and Freddit Mac loans in order to prop up the mortgage market. Cities would also like to see more Community Development Block Grants.
Cities are also placing blame and seeking compensation from lenders, who they blame for the crisis. For some perspective, Sacramento predicts a $55 million loss of revenue. Fairfax County in Virginia is looking at a $220 million deficit. The City of Cleveland has 16,800 homes in foreclosure.
It’s clear that this crisis will have repercussions for land planning and infrastructure investments. In many cities there may be a strong push toward population consolidation and a redrawing of neighborhoods and city boundaries.
Flint, Michigan is a city that has taken some bold and dramatic steps to redraw boundaries after being hit hard by a lass of manufacturing jobs. The treasurer for the county has taken back land and property to the tune of owning and controlling 11 percent of the city’s land. Instead of selling this foreclosed land to speculators, he’s working on renovating and rehabilitating the city. There’s a detailed story on this strategy, and the state laws that paved the way for these powers, on Governing.com.
