WASHINGTON — More federal aid for the mortgage foreclosure crisis should be sent directly to embattled cities rather than funneled through state bureaucracies, Las Vegas Mayor Oscar Goodman told a House committee on Thursday.
Goodman recommended community development block grants as the means to send federal funds to Las Vegas and other cities hit hard by the crisis.
Sending money to state governments before the cities could cause harmful delays, he said.
“We’ve had a history with that kind of filtering with homeland security funds. …We don’t believe the funds reach us quickly enough, and this is a matter that has to be addressed immediately,” Goodman said.
Ninety percent of foreclosures in Nevada occur in Clark County, Goodman said, and the county’s foreclosure rate is “at least” one for every 20 homes.
The national average is one foreclosure for every 555 homes.
More than 4,000 homeowners in Clark County owe their lenders more than the value of their property.
About 6,000 people move to Las Vegas each month.
As recently as 2004, Goodman said, people who wanted to buy homes in Las Vegas were taking lottery numbers and standing in line, sometimes sleeping there overnight.
When Rep. Dean Heller, R-Nev., a committee member, asked Goodman whether stronger oversight might have prevented the crisis, Goodman said, “I don’t think anybody saw it coming,”
“I think it’s a very tenuous time in our history as a country, and certainly in our community,” he said. “We rode the crest, so to speak, and this is the first time we’re looking at hard times.”
But Goodman said he is optimistic Las Vegas homes will regain their value in about two years.
“I don’t want to have a cloud of pessimism over how we look at our future in Las Vegas. We’re usually the first ones to come back from a recession based on the nature of our economy,” Goodman said.
Goodman was one of three mayors and a governor who appeared before the committee to discuss bills in Congress on the housing crisis.
Boston Mayor Thomas Menino enthusiastically endorsed Goodman’s suggestion on community development block grants, saying “the focus on states is misplaced.”
Washington, D.C., Mayor Adrian Fenty said he also preferred community development block grants, which allocate 70 percent of funds to local government and 30 percent to states.
But Gov. Martin O’Malley, D-Md., a former mayor of Baltimore, advocated a formula that would target counties as well as cities most severely affected by the mortgage foreclosure crisis.
“If you restrict this to (community development block grants), you might have dollars going to places that are not necessarily impacted as greatly as others are,” O’Malley said.
Heller, whose district includes northern and rural Nevada and a portion of Clark County, said the mortgage foreclosure crisis is not confined to Southern Nevada.
The foreclosure rate for Nevada is one for every 154 homes, Heller said, and in Washoe County, 14 percent of homes for sale in December were owned by banks.
“I truly do believe that there is a government role in solving this particular problem; I’m just not sure what it is,” Heller said.
Contact Stephens Washington Bureau reporter Tony Batt at tbatt@ stephensmedia.com or 202-783-1760.