Freefall
by digby
Forbes has released its list of ‘Top 10 U.S. Cities In Freefall’, and California has the dubious distinction of appearing thrice. The greater Los Angeles, Riverside and Sacramento areas all made the list, only Florida had more cities represented. In compiling the list, Forbes used six metrics, including the percent the median home price has fallen since its individual peak, how many people were moving in and out of these metros, and percent change in unemployment. Of California’s woes, Forbes writes:Riverside, Los Angeles and Sacramento are suffering because of the knocks they took after their inflated housing markets began to plummet. Unemployment in the City of Angels has nearly tripled in three years, to 12%. Riverside’s unemployment has also ballooned, to 15%. Meanwhile Sacramento saw a 75% drop in new building permits. These are troubling signs for Cali metros, but not surprising. The end of the state’s home-price climb triggered more than just a housing slump. “In California, so many jobs were concentrated in construction,” says Michael Fratantoni, vice president of research at the Mortgage Bankers Association, the professional association for real estate financiers. “Jobs building single family homes wound up not being sustainable, and there were a lot of job losses.”
Hence:
Mayor Antonio Villaraigosa said Tuesday that Los Angeles will lay off more than 700 workers in the coming months and eliminate thousands of jobs as the nation’s second-largest city struggles to close a $500 million budget gap. In addition to reducing the public work force, the Democratic mayor warned the recession-battered city to prepare for cuts in road repairs, tree trimming and library hours. “This is not a budget that reflects why I ran for office,” the mayor said in his annual address to the City Council. The speech began what is shaping up as a tense budget season at City Hall. The mayor’s spending plan for the fiscal year that begins July 1 must be approved by the council, which has chafed at some of his proposals. “We’ll have to make some difficult choices and it won’t be easy,” City Council President Eric Garcetti said in a statement. Working with the council, the mayor wants to slash roughly 3,500 positions through job cuts, early retirements and the elimination of vacant posts.
It’s not over here — by a long shot.
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