Decades of hard-won community revitalization work in America's cities is being undone by the mortgage crisis, and the Federal government is at odds over how to stop the decline.
"Eighteen months ago, [Baltimore's] Reservoir Hill was a prime example of the progress that cities across the country have made reclaiming blighted neighborhoods as a nationwide housing boom helped lure homeowners and chase away crime. Now the mortgage crisis threatens to reverse those gains as foreclosures multiply, house prices plunge and vacancies rise.
The damaging effects of even a single foreclosure on a community are well-documented. Prices of surrounding homes fall, and houses become tougher to sell. But foreclosures are even more destructive when they come in clusters, as is happening now.
The plight of the cities has become the focus of intense negotiations over a far-reaching housing bill pending in Congress. In exchange for their support for a Bush administration plan to rescue ailing mortgage finance giants Fannie Mae and Freddie Mac, Democratic leaders are demanding $4 billion in emergency aid to stabilize hard-hit communities by purchasing vacant and foreclosed properties.
But the White House as recently as yesterday threatened to veto the bill unless the money is removed...The administration's opposition has infuriated a coalition of Democratic governors, big-city mayors and community activists, who say the money is their best hope for stabilizing communities where the battle against blight had so recently been won."
FULL STORY: Mortgage Crisis Reverses Tide of Urban Renewal

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