Released: July 22, 2008

Mortgage crisis reverses tide of urban renewal

Source: Lori Montgomery, Washington Post (Free Registration)

On Reservoir Hill, just north of downtown Baltimore, one of this city’s most hopeful revitalization projects is falling apart. Over the past two years, 95 properties have fallen into foreclosure. On one dismal street, three blocks of apartment buildings and rowhouses—many freshly renovated—stand vacant, their doors and windows boarded over to ward off thieves.

Eighteen months ago, Reservoir Hill was a prime example of the progress that cities across the country have made reclaiming blighted neighborhoods as a nationwide housing boom helped lure homeowners and chase away crime. Now the mortgage crisis threatens to reverse those gains as foreclosures multiply, house prices plunge and vacancies rise.

The plight of the cities has become the focus of intense negotiations over a far-reaching housing bill pending in Congress. In exchange for their support for a Bush administration plan to rescue ailing mortgage finance giants Fannie Mae and Freddie Mac, Democratic leaders are demanding $4 billion in emergency aid to stabilize hard-hit communities by purchasing vacant and foreclosed properties. 

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