Foreclosures cost LA $80 billion, study says
On the same day real estate data indicated that California’s home to the second-highest foreclosure rate in the country, two nonprofits estimated the financial toll of that status on cities and neighborhoods.
Bahar Tolou, a research analyst with RE-Fund California, says the foreclosure crisis has cost Los Angeles almost $80 billion.
"This is the decline in home value of foreclosed homes, but not just that, it’s the decline in home values in all of those properties nearby in the neighborhood," she said. "This is the half a billion dollar cost to property tax revenue. This is the revenue that supports services for everyone. That means that class size grows, fire stations close, and libraries close."
The study indicates the typical foreclosure costs local governments almost $20,000 in increased safety inspections, trash removal, and police and fire calls.
The study was commissioned by the Alliance of Californians for Community Empowerment and the California Reinvestment Coalitio, both nonprofits that advocate for low income communities.
Another study by RealtyTrac released Thursday says California had the country’s second highest foreclosure rate in August.