Posted on Sunday, March 20, 2011
According to a community advocacy group in California, home value losses from foreclosed homes in California have cost a minimum of $632 billion, and could end up costing as much as $1 trillion.
The Alliance of Californians for Community Empowerment (ACCE) released a report on Thursday detailing the cost of the foreclosure crisis in California.
California is considered one of the “hardest-hit” states in the country, and according to the report, one in every five foreclosures in the United States is in California. Nearly a third of mortgages in California are underwater, and there have been 1.2 million foreclosures in the state since 2008.
The alliance says the loss in property tax revenue is nearing $4 billion, amounting to a $2,058 property tax loss per foreclosure. Not only that, the group estimates that foreclosure-related costs that get kicked back to the government amount to $17.4 billion, or more than $19,000 per foreclosure.
The advocacy group is doing what it can to stem the money that seems to be endlessly hemorrhaging from the state.
ACCE has teamed up with a California assemblyman who is proposing legislation that would force lenders to pay $20,000 for each home foreclosure they initiate in California.
Assemblyman Bob Blumenfield (D- San Fernando Valley) said the money would go to local schools, fire departments, and other community services, in an effort to make up for lost property taxes and other state expenses that arise from foreclosures.
According to the ACCE report, 53 percent of property taxes are allocated to school districts and community colleges. The other 47 percent is allocated to community services through special districts, cities, and counties.
The group said there was an estimated $627 million loss in property taxes in California during the 2009-2010 fiscal year.
By: Joy Leopold, DS NEWS