Are banks responsible for a 22% drop in local real estate values? Last Thursday, the Alliance of Californians for Community Empowerment and the California Reinvestment Coalition released a report stating that the meltdown in the housing industry and the huge number of foreclosures has resulted in a nearly $80B drop in Los Angeles home value since 2008.
According to a story in the Daily Breeze:
The report’s central finding is that property values have declined by $78.8 billion since 2008. The number is based on estimates that foreclosed homes decline in value by 22 percent and the value of homes within one-eighth of a mile of a foreclosed home dip 0.9 percent.
The report found increased foreclosures are costing the city of Los Angeles in lost property tax revenue and increased costs for securing and maintaining foreclosed properties. The report estimated each foreclosure costs the city about $19,229 for increased police and fire calls, trash removal and other maintenance. The city has expended about $1.2 billion on these costs since 2008, the study found.
“This report quantifies what people in California have been feeling for years – banks’ practices are financially devastating to our neighborhoods and cities,” said Peggy Mears of the Alliance of Californians for Community Empowerment.