Congresswoman Maxine Waters Lauds $160 Million in Neighborhood Stabilization Funds for Los Angeles

Congresswoman Maxine Waters (CA-35) today applauded the awarding of $160 million in Neighborhood Stabilization Program (NSP) grants to help Los Angeles fight foreclosures, home abandonment and blight and restore neighborhoods. Congresswoman Waters, who serves as Chairwoman of the Subcommittee on Housing and Community Opportunity, authored the legislation that created NSP, and has led efforts in the U.S. Congress to combat foreclosures and neighborhood decline.

After reviewing competitive grant applications, the Department of Housing and Urban Development (HUD) announced that the City of Los Angeles will receive $100 million in Neighborhood Stabilization Program (NSP) funds.  Los Angeles Neighborhood Housing Services, a non-profit lender and community developer working in L.A. communities, was awarded an additional $60 million.  Funding for the program came from the economic stimulus package – the American Recovery and Reinvestment Act (ARRA) of 2009.

"As a representative for South Los Angeles and as Chairwoman of the Housing Subcommittee I have long worked to prevent foreclosures, keep people in their homes, and make neighborhoods safe for families and businesses," said Congresswoman Waters. "Los Angeles received the largest grant award of any city in the United States and the second largest grant overall, clearly a testament not only to my work and the work of other advocates and officials, but also to the scale of the foreclosure crisis in L.A."

In the Los Angeles area, 1 in every 222 housing units received a foreclosure filing in December of 2009 and 21,369 homes have been foreclosed upon.  Home prices in Los Angeles are down about 30 percent from their peak in a large number of neighborhoods.

Congresswoman Waters introduced the Neighborhood Stabilization Act nearly two years ago.  The Congresswoman staunchly advocated for the legislation, and was able to authorize the program and secure $4 billion in NSP funds under the Housing and Economic Recovery Act of 2008.  The Congresswoman fought for an additional $2 billion for the program to be included in the stimulus package that Congress and President Obama put together and passed in February 2009. 

Most recently, the Congresswoman led a group of Congressional Black Caucus lawmakers in securing an additional $1 billion in NSP funds under the Wall Street Reform and Consumer Protection Act of 2009, which passed the House of Representatives in December 2009. 

Nationwide, about 3 million foreclosure notices were sent out in 2009, according to research from the firm RealtyTrac.  Additionally, according to First American CoreLogic, about 1 in 4 homeowners, or about 10.7 million households, were "underwater" in the third quarter of 2009, owing more on their mortgages than what their homes were worth. Over the next five years, the Center for Responsible Lending predicts these negative trends will result in 13 million new foreclosures.

"Foreclosures are a tragedy not only for the families facing the loss of a house, but also for entire neighborhoods.  Foreclosed and abandoned housing encourages vandalism and crime and pushes down neighboring property values.  This funding represents a crucial opportunity to stop this cycle," said Congresswoman Waters.

The $160 million announcement for Los Angeles is part of HUD's $2 billion release of NSP funds to many cities and organizations throughout the country. "HUD Secretary Shaun Donovan is to be commended for his strong and consistent support of our nation's homeowners and urban communities. I look forward to working with him as we continue to guide our nation out of this housing and economic crisis."

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