Property Tax collections plummet in Bay Area – Foreclosure is the reason

The foreclosure epidemic is wrecking havoc on US housing markets, especially California where the San Francisco Bay Area of 9 counties is located. Tens of thousands residential properties are foreclosed; deserted; walked-away from and are lying uncared for, bringing a shame for the country. Apart from this, there is another woe– reduction in property tax income, to sustain the city and county administration to fund schools and other infrastructure.

As of date, nearly thirty thousand California homes are lying under the foreclosure process of various stages. When the home owners get evicted from their beloved homes, the property tax collection comes to an end, until a new owner gets that home. The budget allocations for welfare activities like education are made from the tax revenue accrued in a county or city and if there are short-falls in the revenue, it directly reflects in budget cuts, laying off or reducing staff strength for want of funds and so on.

According to available statistics, in the East Bay area mortgage lending banks hold – as repossessed but vacant properties over 10,000 in number and only a small portion of them are sold. News is a further 20,000 properties are in the pipeline to get added up during this year.

However, Gus Kramer, Contra Costa County Assessor, maintains that there is no question government services at all levels are going to suffer because of this and it is just one of the trappings of the county we are in.

The actual position is –  Concord City has shed a quarter of its workforce; a quarter of annual budget has been shelved by Antioch; and further taxes have been levied by Hayward in order to avert redundancies. Schools that are depending upon a combination of State income sources will be the most-hit.

While preparing the current budget, the foreclosure trend was not exactly measured, as admitted by a representative of the Department of Finance, California. The projection now is the State property taxes will fall short by 4.1 percent during the current period and by another 3.1 percent next year.

Property prices in the Bay Area in April 2010 worked out just $370,000 as against the peak of $665,000 in 2007.

Posted by Amitesh Kumar on May 31 2010. Filed under Foreclosures, Short Sales. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry