Thursday, March 17, 2011
The Home Defenders League, a community activist organization in California, released a report this week with the provocative title of “Home Wreckers: How Wall Street Foreclosures are Devastating Communities.” You can find the report here.
The report concludes that the true cost of foreclosures in California will be $650 billion to $1 trillion. It estimates a $632 billion to $1 trillion loss in property values; $3.8 billion in lost property tax revenue; and $17.4 billion in foreclosure-related costs to be borne by local government.
I'm working on an op-ed for the Huffington Post regarding the property tax piece. It is a variation on an argument you've probably heard from me before. It makes no sense that we are embracing a policy that forces borrowers and lenders (and, by extension, taxing authorities) to internalize temporarily depressed property values, particularly given the long-term costs of doing so.
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