Housing Downturn Hits City Hall

A new report from the National Leagues of Cities shows that the housing market decline is hampering many cities' ability to pay for basic services.

2 minute read

October 18, 2007, 1:00 PM PDT

By Michael Dudley


"Across the country, local governments are feeling a financial strain driven largely by the nation's real estate downturn. City finance officers predict slowing revenue even as they remain under pressure to keep spending, especially in areas like health care and pensions, according to an annual survey by the National League of Cities.

To handle budget deficits they now expect, many cities are increasing fees for services, and some are considering raising property taxes, said the report, to be released Thursday.

In interviews, some city and county budget officials said the direct effects of the housing downturn could have a lag time of several years when it comes to local government revenue, whose level depends on property reassessments. Some pointed to factors particular to their cities - a loss of state aid, perhaps, or legislation limiting local property tax collections - as more dire.

The report from the National League of Cities was based on responses from finance officers in 359 cities, all with populations of 10,000 or more, from April to June. It found that 7 in 10 believed their cities were better able to meet fiscal needs during 2007 than in 2006, but that many were quite pessimistic about the years ahead. In the Midwest, the picture was already grim: almost half reported that their cities were less able to meet their financial needs this year than last.

Some local and state governments built up large surpluses in recent years, which, they hope, will cushion them now. Next month, the United States Conference of Mayors meets in Detroit to look at the real estate downturn and its effects on residents and municipal budgets."

Thursday, October 18, 2007 in The New York Times

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Get top-rated, practical training

Aerial view of single-family homes with swimming pools in San Diego, California.

San Diego to Rescind Multi-Unit ADU Rule

The city wants to close a loophole that allowed developers to build apartment buildings on single-family lots as ADUs.

March 9, 2025 - Axios

Canadian flag in foreground with blurred Canadian Parliament building in background in Ottawa, Ontario, Canada.

Has President Trump Met His Match?

Doug Ford, the no-nonsense premier of Canada's most populous province, Ontario, is taking on Trump where it hurts — making American energy more expensive.

March 11, 2025 - Toronto Star

Close-up of green ULEZ sign in London, UK.

Study: London ULEZ Rapidly Cleaning up Air Pollution

Expanding the city’s ultra low-emission zone has resulted in dramatic drops in particle emissions in inner and outer London.

March 10, 2025 - Smart Cities World

Burned car and home in Los Angeles after 2019 wildfire.

The Unseen Aftermath: Wildfires’ Lasting Health and Emotional Burden

Wildfires in Los Angeles not only pose immediate physical health risks but also lead to long-term respiratory problems and mental health struggles, underscoring the need for a coordinated public health response to mitigate their lasting effects.

3 hours ago - UCLA Health

View of Central Park lake with people sitting on lakeside rocks and NYC high-rises in background.

Public Parks as Climate Resilience Tools

Designed with green infrastructure, parks can mitigate flooding, reduce urban heat, and enhance climate resilience, offering cost-effective solutions to environmental challenges while benefiting communities.

5 hours ago - Grist

Cyclists and a red T train on the Longfellow Bridge in Boston, MA at sunset.

What the Proposed Federal Budget Means for Transit, Rail

The proposed FY 2025 budget keeps spending for public transit and passenger rail essentially the same as in 2024.

7 hours ago - American Public Transportation Association

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.