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Sunday, May 11, 2008

The "poster child" for the housing bust

by Calculated Risk on 5/11/2008 01:21:00 AM

Here is a story of a city in Northern California devastated by the housing bust, from the San Francisco Chronicle: Brentwood the poster child for housing bust (hat tip rainyday)

This farming community on the eastern edge of the Bay Area absorbed an outsize portion of the region's growth during the prolonged housing and development boom, adding 40,000 residents in the past 16 years as subdivisions and strip malls overtook agricultural land. ... Now, Brentwood is suffering disproportionately from the bust.

Hundreds of families have lost their homes to foreclosure since the beginning of last year, and in a sign of more to come, at least 1 out of every 16 households has received default notices.
"Brentwood is kind of the poster child for what's going on in the housing market," said Howard Sword, the former community development director. "We were so active in the years where the subprime finance creative tools got rolled out, we were issuing like 1,400 to 1,600 building permits a year."

This year, the city has issued nine permits for single-family homes. It expects to collect $21.3 million less in permit and impact fees than it did two years ago, said Pamela Ehler, director of the finance and information systems. Brentwood's total general budget is about $40 million.

"This was a complete meltdown," she said.