Stimulating Phoenix: City Looks for Bailout
Phoenix stuggles with revenue after the bottom falls out of the housing market.
Feb. 15, 2009 — -- After years of benefiting from the housing market boom, Phoenix, one of the national capitals of urban sprawl, suddenly finds itself threatened by slow sales, bad mortgages and a rash of foreclosures.
After signing the economic stimulus bill in Denver early this week, President Barack Obama is scheduled to head to the Arizona metropolis Wednesday to try to make the case for the legislation to the American people.
The Sunbelt region has been one of the hardest-hit in the real estate bust. One in every 182 houses in Arizona received a foreclosure notice last month.
The president is expected to propose anywhere from $50-$100 billion to help stem the tide of foreclosures.
Obama is expected to ask banks and borrowers to absorb some of the losses.
Resident Julian Kinsale said his home's value has dropped more than 50 percent in just two years. Kinsale said it's critical that Obama take a long, hard look at the economic disaster sweeping his hometown.
"If there is a natural disaster the president goes. We are facing a ground zero, and I think it is a good thing for the president to come and see with his own two eyes and see what they are experiencing in Phoenix," he said.
Before the bottom fell out for Arizona's capital city, the area's population nearly doubled, filling municipal coffers for projects such as a light rail system.
The economy skyrocketed, based almost solely on the real estate market, which drew tourists, retirees and businesses seeking inexpensive spaces.
"Builders began to believe that they could build almost anything and there would be someone there to buy it," said Robert Mittelstaedt, dean of Arizona State University's business school. "I call it builders gone wild. So now we have 50,000 to 60,000 empty homes in the Phoenix metropolitan area."
Subdivisions built as the perfect family neighborhoods now have blocks of empty house and barren streets.
The tough market has made it difficult for homeowners like Leroy Ford to sell their homes. Ford, who recently lost his job, is trying to offload his four-bedroom home for $80,000.
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