Stockton California Files For Bankruptcy
The housing boom and subsequent crash not only hurt individual citizens, it tore apart the financial planning of many US cities. Now because of a poor economy and a bet the city of Stockton, California made on development in the mid-2000′s, city officials have been forced to file for bankruptcy.
The move makes Stockton the largest city to ever file for bankruptcy. A river port and agricultural city of nearly 300,000 people, the city which is located 90 miles east of San Francisco tried to reinvent itself by building a new sports complex and arena. Officials also began building new housing tracts, a promenade and a fancy hotel. Unfortunately after the housing crisis the city couldn’t attract new residents and it couldn’t afford to pay the hefty credit bills coming due for its gamble.
As noted by the Los Angeles Times the cities posh new homes are now located just blocks from violent neighborhoods and the rate of foreclosure in the city is the second-highest in the country.
The city’s council voted 6-1 to file for bankruptcy after examining all of their options, the filing is expected to be completed on Wednesday.
A sign of things to come became apparent in 2011 when the city cut 25% of its police force and then saw a record 58 homicides and 31 in 2012 to date. The city was also forced to remove 30% of its fire department and cut jobs for 40% of its city staff. City officials also tried to save some money by cutting down in employee benefits.
As Stockton officials prepare for bankruptcy the city now has an unemployment rate of 15% and the second-highest violent crime rate in the country. The city has also lost City Hall and several parking lots which are now being run by Walls Fargo.