McNerney Calls On the U.S. Department of Housing and Urban Development to Keep Sacramento Office Open

WASHINGTON, D.C. – May 17, 2013 – (RealEstateRama) — Congressman Jerry McNerney (D-Stockton), joined by Congresswoman Doris Matsui, Congressman John Garamendi, and Congressman Ami Bera, called on the U.S. Department of Housing and Urban Development (HUD) to keep its Sacramento office open in response to HUD’s announcement of its plans to close that branch. The Sacramento office currently serves the epicenter of the housing crisis. The region continues to have one of the highest rates of foreclosures and underwater homeowners in the Nation.

“The answer to a problem like the foreclosure crisis in the Central Valley is not to walk away from it. To do so would be to refuse to throw a drowning man a life jacket. We’ve been on the frontlines of the foreclosure crisis and calling on the administration to provide the help we need to keep people in their homes. Closing the Sacramento office will deal a huge blow on some of the most affected communities in our country,” said Congressman McNerney.

Today, HUD announced that it intends to close the Sacramento office, citing budgetary and cost-cutting reasons. HUD is closing 16 offices nationwide and three in California alone: Sacramento, Fresno and San Diego. Fifteen jobs will be lost at the Sacramento office because of the closing.

Despite some positive signs nationwide in our housing market, Stockton and all of the San Joaquin Valley continue to be at the forefront of the housing crisis. Since the housing crisis began in 2008, Stockton has continually been one of the top five cities in foreclosures nationally – and often ranked number one. During January of this year, one in every 277 housing units was subject to a default notice. Today, more than 50 percent of the city’s residents owe more than their homes are worth, and property values have plummeted by nearly the same percentage over the last few years. In 2007, the median home value in Stockton was $364,700; by 2010, that number was cut in half. This was the second largest decline among all major cities.

Additionally, in Stanislaus and San Joaquin counties, at least 60 percent of mortgages are underwater. News sources indicate that in San Joaquin County, 62.4 percent of borrowers owe more than their homes are worth. In San Joaquin County, 49.6 percent — 62,937 homes — have negative equity. An additional 5.3 percent — 6,694 homes — are near negative. Across the state of California, the rate for underwater homeowners is ten percent higher than the national average – 33 percent to the national rate of 23 percent.

“This is a clear example of the administration’s lack of attention to the continued crisis in California’s housing market. To date, Secretary Donovan has not even visited Stockton or San Joaquin County to witness the very real effects and heartbreak caused by foreclosures or work with community leaders to try and find solutions. To close a vital hub that serves a community in such need without any firsthand knowledge is unacceptable,” said McNerney. “California has been disproportionately affected by the housing crisis. Closing three offices in a state that has been one of the hardest-hit by this ongoing issue will have disastrous consequences.”

“Strengthening our housing market is a critical component in bettering our community and spurring economic growth. We need healthy, robust neighborhoods that all of our families are invested in. We have a fighting spirit here, and I know that if we provide these hard-working families with the support they need, we can get our local economy back on track,” said Congressman McNerney. “I thank my colleagues from California for their continued partnership on this issue that continues to threaten our region, and all of California.”

The text of the letter is below and can be seen here.

The Honorable Shaun Donovan
Secretary
U.S. Department of Housing and Urban Development
451 7th Street S.W.
Washington, DC 20410

Dear Secretary Donovan,

It has come to our attention that the Department of Housing and Urban Development (HUD) will be closing and consolidating a number of field offices around the country. Two of the offices being considered for closure are located in Sacramento and Fresno. We write to you to ask you to reconsider this decision.

California’s Central Valley has, unfortunately, led the Nation in foreclosures and many of us have had serious concerns in the past about HUD’s commitment to serving the region. Cities such as Sacramento, Stockton, and Fresno saw home values plummet and many homeowners saw the American Dream of homeownership vanish. While our communities have begun to see modest reductions in the number of foreclosures, HUD’s assistance will be imperative to ensure affordable homeownership opportunities exist, sustainable community practices are implemented, and that the public housing sector remains viable. HUD’s presence in these regions is needed to ensure that its headquarters and regional offices are aware of the challenges our communities face.

HUD’s presence in the Central Valley has provided critical assistance by helping public housing authorities, local government agencies and nonprofit organizations understand the department’s programs and policies, thus allowing for better service to the organizations that serve our constituents. Although larger HUD offices exist in San Francisco and Los Angeles, the offices slated for closure are positioned to assist with needs specific to our communities which have struggled with significantly high foreclosure rates over the last five years. We know budget constraints force tough decisions, but we firmly believe HUD’s offices in Sacramento and Fresno have benefited our communities and will continue to do so.

Again, we request that you consider all possible alternatives that would maintain a HUD presence in the Central Valley. We look forward to a response regarding this important issue.

Sincerely,