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Wednesday, Jun. 17, 2009

Recession hit harder in Fresno, Modesto, Stockton metro areas

Merced not in report only because it's not in top 100.

WASHINGTON -- The great recession has slammed Stockton, Fresno and Modesto harder than most other metropolitan areas in the country, according to the latest grim accounting.

The three San Joaquin Valley cities rank among the bottom 10 "weakest performing" metro regions nationwide, a Brookings Institution study released Wednesday concludes.

Plunging house prices, soaring unemployment and viral foreclosures are all choking the region more than other parts of the country.

"All metropolitan areas are feeling the effects of this recession, but the distress is not shared equally," report co-author Alan Berube noted.

In March, for instance, Modesto's unemployment rate reached 17.5 percent and Fresno's hit 17 percent, while in the high-tech haven of Provo, Utah, it hovered at 5.1 percent.

Stockton house prices fell 30.6 percent since January 2008. In Houston, they have rebounded by 4.7 percent.

Stockton, Modesto and Fresno ranked 93rd, 94th and 95th respectively in the rankings compiled by Brookings' Metropolitan Policy Program.

The lowest city was Detroit, savaged by the loss of manufacturing jobs.

Merced County was not mentioned in the report since it is not in the top 100 metro areas.

The Valley cities are long accustomed to poor showings in similar economic scorecards, and the general picture has been painted many times before.

Berube cautioned, though, that the latest economic downturn further impedes perennial turnaround hopes.

The Valley's lawmakers are responding both symbolically and legislatively to the crisis that's summed up in the new 21-page Brookings report.

They are all acutely ware of the political dangers posed by sustained voter frustration.

On Friday, for instance, the House Financial Services Committee will hold a hearing on the Valley's dire economic circumstances.

Lawmakers will consider, though not vote on, proposals including one by Reps. Dennis Cardoza, D-Merced, and Jim Costa, D-Fresno, that would establish the Valley as an "economic disaster" area eligible for special federal aid.

"We are one step closer to seeing the relief we deserve in the Valley," Cardoza declared in announcing the upcoming hearing.

In a slightly different rhetorical vein, Rep. Devin Nunes, R-Visalia, says he will be bringing more congressional attention to the irrigation water shortages that have aggravated the Valley's farm economy.

Starting this week, Nunes plans to offer water-related amendments on House spending bills; he conceded the amendments will lose, but he believes they will still serve a purpose.

"We need to draw a clear congressional record of those people who want to cut off water to the Valley," Nunes said, adding his belief that congressional Democratic leaders "want the Valley killed."

In Stockton, Fresno and Modesto, analysts noted the unemployment rates jumped more than 5.9 percent.

In Stockton, more than 14 homes in 1,000 are owned by the lenders, and in Modesto more than 13 homes in 1,000 are owned by lenders. The so-called "real-estate owned" proportion in Fresno is about 6.5 homes per 1,000.