Cities Search for Neighborhood Stabilization Tools

Cities struck by the foreclosure crisis are implementing a number of measures to help prevent foreclosures and stabilize neighborhoods already racked by vacancies.

The article features an interview with L.A. City Councilmember Richard Alarcón, whose council district has been especially impacted by foreclosures. In the interview, Councilmember Alarcón details the variety of programs and policies being tested and implemented to help struggling homeowners and dilapidated neighborhoods.

"Since January 2007 we have had over 2,000 homes foreclosed. From July through September of 2008, we had 629 foreclosures. Through the Valley as a whole, we've had an average of 1,000 foreclosures a month over the last 2.5 months. Obviously the unemployment rate is extremely high. The 12 percent measure that the experts have given us is really more like 20 percent in our district."

"We are also working with Neighborhood Legal Aid in Pacoima and ONE L.A. to design a pilot project that would try to get leverage over the banks to provide a discount up to 60 percent. Then the city would come in with a soft second. If the banks come in with a 60 percent discount we could then guarantee the second. We need to renegotiate the loans so that they are in real value terms."

"We have $25 billion in our portfolio now. We should divest from banks that are unwilling to provide first time homebuyer loans and are unwilling to put their banks into working class communities. Pacoima only has one bank and dozens of check cashing operations."

Thanks to James Brasuell

Full Story: L.A. Councilman Alarcón Boosts Foreclosure Mitigation Programs

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