UC Berkeley Report: Some Bay Area Cities Haven't Recovered From Housing Crisis

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    NEWSLETTERS

    UC Berkeley: Underwater America Report, Haas Institute

    A new report released by the University of California, Berkeley shows that many Bay Area cities and neighborhoods are still reeling from the effects of the housing crisis.

    The first-of-its-kind report, entitled "Underwater America: How the So-Called Housing Recovery is Bypassing Many Communities," spotlights the widespread problem of underwater mortgages - or homeowners stuck paying more than their homes are now worth.

    Among the list of 100 American cities with populations over 100,000 with the highest percentages of underwater homeowners are the Bay Area communities of Vallejo, Fairfield, Antioch and Richmond, according to the report.

    The report also found underwater homeowners were more likely to be low-income or minorities.

    "People talk about there having been a recovery in housing prices, and it's true, housing prices are on the rise in a lot of places, but in these places and especially in places of color the recovery has passed them by," said Saqib Bhatti, one of the report's co-authors and a fellow at the Nathan Cummings Foundation in New York.

    Cities like Richmond, Antioch and Vallejo "have large populations of people of color and relatively low-income compared to other parts of the Bay Area," Bhatti said.

    In Vallejo, 36 percent of homeowners are underwater on their mortgages, making it the 25th hardest hit American city with at least 100,000 residents, according to the report.

    About 29 percent of homeowners in Antioch and 28 percent in Richmond are underwater, the report shows.

    The report's findings were released at a news conference on Thursday in Richmond, where city leaders have proposed Richmond CARES (Community Action to Restore Equity and Stability), a plan to seize underwater mortgages from lenders using the municipal power of eminent
    domain.

    Mayor Gayle McLaughlin has often cited the disproportionate number of Richmond homeowners hard hit by the housing crisis as the impetus for the controversial plan.

    "I think the report makes it clear that Richmond and other similar cities are still struggling big-time with the housing crisis," McLaughlin said in an email.

    "This data confirms what we have been saying all along," she said.

    Bhatti said Richmond's plan is exactly the type of action he and the other authors of the UC Berkeley report are encouraging.

    "We've seen very clearly that federal solutions today have been woefully inadequate and if you want to ensure there's a real housing recovery...we need to make sure city officials use all means at their disposal, including programs similar to Richmond CARES, to provide that relief,' he said.

    The city has not yet attempted to seize any of the several hundred homeowners it has identified as being underwater but McLaughlin said the city is still working toward on the plan.

    City leaders hope to partner with other cities across the state and the country to form a Joint Powers Association that would give them more legal authority against the lenders holding the mortgages, McLaughlin said.