California Officials Try to Avoid Second Housing Hit

Wall Street Journal (10/07/08) P. A8; Rundle, Rhonda L.
Officials in California's San Bernardino and Riverside counties are searching for ways to prevent the recently passed economic stabilization bill from taking the same toll on communities as the savings-and-loan crisis two decades ago, when distressed homes flooded the market, depressed prices and transformed owner-occupied neighborhoods into rental communities. In Moreno Valley, for instance, homes worth as much as $150,000 prior to the crisis plunged to $75,000 due to rising inventory. Rep. Gary Miller, R-Calif., has proposed a bill that would allow businesses and local governments to establish regional public-private partnerships to purchase distressed properties from the Treasury to maintain their value and prevent them from being snapped up by speculators. The Treasury would hold a stake in the properties, though it remains to be seen how the partnerships would be structured.