Property Tax Increases Have Contributed to the Rise in Foreclosures

     David Cicilline sat down for an interview with the Providence Journal.  The interview consisted of predictable questions and predictable answers.  Here's one notable question and answer:

You’ve mentioned before that we’re seeing a new wave of foreclosures. What’s the city going to be doing in response in 2009?

We have put together a really strong set of initiatives to help mitigate the national foreclosure crisis. They range from the abandoned property penalty ordinance, to low- and zero-interest loan programs for the purchasing of properties, to counseling to help people avoid foreclosure, to a plan for use of the federal money for the Neighborhood Stabilization Plan, to work with the [community development corporations] to acquire these properties and renovate them, and to two pieces of legislation that will be introduced that require a notice be issued to tenants before foreclosures occur as a well as a mediation process to help people avoid foreclosure. … I’ll continue to advocate for as many resources as possible from the federal and state governments as we can get to do all this. 


    
Here's a good follow-up question I would have asked: You have raised taxes several times since you've been Mayor.  Since many home owners have their property taxes included in their monthly mortgage payment, your tax increases contributed to their rising housing payment.  What are your thoughts on this situation?

     The mortgage crisis is a national problem that is larger than Providence.  It was caused by a variety of problems which came together to create a credit crisis of huge proportions.  With that said, there has been a focus on how montly mortgage payments rose due to escalating interests rates, yet I've seen hardly a mention about the role cities and towns have played in raising the monthly mortgage payements for its citizens.  Due to multiple tax increases and a property reevaluation two years ago, many mortgage payments have risen hundreds of dollars per month.  That doesn't count changes in mortgage rates or insurance premiums, I'm talking about increases due solely to property tax increases.

     I'm fairly certain we will see a property tax increase of 5% this year, which will further raise monthly house payments for some home owners, and probably have a ripple effect for renters.  The City needs budget cuts, not tax increases that will further increase the number of foreclosures in Providence.

 

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  • 1/5/2009 1:23 AM Don wrote:
    I suspect the Mayor would respond by saying that since the state has reduced its overall funding to the city, the state has forced the city to take steps detrimental to the taxpayers of the city.
    Reply to this

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