New Jersey is faced with the second highest rate of foreclosure in the entire country and is moving in the opposite direction as the rest of the country when it comes to foreclosures, according to RealtyTrac – and for the city of Newark, new data points to an epic crisis.
“Newark Homewrecker”, a new report issued by New Jersey Communities United, finds that foreclosures in Newark are costing the city, taxpayers and homeowners millions of dollars.
Findings of the report include:
- The typical foreclosure costs local governments more than $19,000 for increased costs of safety inspections, police and fire calls, trash removal, and maintenance. In Newark these costs are estimated to be more than $56 million.
- More than 9,000 Newark homeowners owe on average $70,000 more on their mortgages than what their homes are worth. Together that adds up to $630 million in underwater debt that is strangling the Newark economy. If banks wrote down those mortgages, it could pump $66 million into the local economy in Newark and create nearly 1000 new jobs each year.
- Newark homeowners have lost an estimated $1.9 billion in home values as a direct result of the 6,810 foreclosures for 2008-2012.
- While property values have declined, Newark’s average property tax has increased 42% over four years.
“Foreclosures hurt homeowners and their families, decrease the value of neighboring properties and ultimately drain the revenue streams cities and counties need to pay for infrastructure, education and first responders among many other critical public services,” said Newark City Councilman Darrin Sharif. “This is the most important issue facing our city today and I’m anxious to review the research and consider our options at the local level to tackle what Governor Christie has put on the back burner.”
“For years, Governor Christie failed to release more than $300 million dollars in Hardest Hit funds that could save families from the streets,” said Trina Scordo, executive director of New Jersey Communities United. “His administration started releasing some of those funds only after public scrutiny – and even now the distribution of that money is a trickle compared to the flood of foreclosures in the pipeline for 2013.”
“My Ward has the highest amount of foreclosed housing in Newark, which is why I helped launch the Newark Essex County Foreclosure Task Force in 2007 to combat this crisis,” said Newark West Ward Councilman Ronald C. Rice. “But banks have to be willing to be part of the solution, work with residents and adhere to federal mandates in the spirit of humanity.”
Other cities around the country – including Chicago, Berkeley, and New York's Suffolk County - are exploring policies that include the use of eminent domain and enforcing vacant property fines against the Wall Street banks that have pushed families out of their homes and assumed ownership. The hearing in April will detail the estimated cost of the foreclosure crisis on Newark as well as the potential for revenue generation that could come as the result of enforcing local abandon property ordinances.
Anti-foreclosure activists anticipate a large turn-out at the April 18th hearing which will include testimony from experts, advocates and Newark residents who have lost their homes to foreclosure or are currently in the process.