Negative-Equity Homes In Elk Grove: Time For Elk Grove Government Executives To Cut Wages -Their Own First

As reported in Sunday's Sacramento Bee, a vast number of homes in the greater metropolitan area have negative equity, meaning the val...




As reported in Sunday's Sacramento Bee, a vast number of homes in the greater metropolitan area have negative equity, meaning the value of the house is substantially less than the outstanding loan balance.

As the Bee's illustration demonstrates, Elk Grove is suffering from a high number of mortgage holders who owe more than the current value. Citywide, anywhere from 30-50% of homeowners are underwater.

While real estate agents, politicians and chamber of commerce types have long been saying and hoping against hope that a recovery is just around the corner, when up to 50% of homeowners are underwater, recovery will come only when the real estate market hits rock bottom. The local bottom, in our estimation, is at least three years out.

With this in mind, just what can we expect from our local government agencies? What services will be cut, who will be laid off, whose pay will be cut?

Some people reading this site have suggested top executives in the City of Elk Grove, Cosumnes Community Service District and Elk Grove Unified School District take mandatory pay cuts. We agree.

With the falling real estate values and falling property taxes revenues and of course the corresponding slump in sales tax revenues, these government agencies will see their incomes decline. With these declines, service cuts will certainly follow.

Before we get to that point, we would like to make a sincere suggestion to the highest paid local officials - take a voluntary 10% pay cut now. This will show taxpayers you realize the severity of the situation and will give you credibility when the difficult cuts become reality.

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