CARSON CITY, Nev. -- At its height, Nevada was ground zero for the Great Recession. Unemployment topped 14 percent, the highest in the nation. The state led in per-capita bankruptcy filings. And one in every 10 homes faced foreclosure.
But while Nevada's jobless and foreclosure rates still rank high relative to other states, the raw numbers have plummeted. Lawmakers who agonized about public employee layoffs and an overburdened unemployment insurance fund a few years ago are now fretting about a shortage of teachers and want to implement new taxes worth hundreds of millions of dollars.
And in another sign of the times, they want to pull the plug on a state program born in the height of the recession to help homeowners fend off foreclosures.
The Nevada Foreclosure Mediation Program, which was created in 2009 and brokered negotiations between more than 7,500 beleaguered borrowers and lenders at its peak year five years ago, is projected to serve one-tenth that number in the coming year. State lawmakers have recommended that the program begin winding down this summer, and that the approximately $3 million used to run it be put elsewhere.
"We've turned the corner on this one," said Assemblyman Randy Kirner, R-Reno. "It's time to move away from here and do something better with our money."
Nevada grew at a feverish pace in the early 2000s, with a casino building boom fueling a home-building frenzy in the Las Vegas area. When the economy collapsed, the state spent five straight years as the foreclosure capital of the country.
Nevada still hovers high on the list, but its recovery is undisputed: In April, about 8 percent of homes sold in the Las Vegas area were owned by banks, down from a peak of 80 percent in May 2009. Unemployment has halved, and cranes that stood frozen for years in front of unfinished casinos are moving again on ambitious new projects on the Las Vegas Strip.
Sen. Joyce Woodhouse, D-Las Vegas, said neighborhoods look different now than when she was knocking on doors in her southern Nevada district in 2008 and 2009.
"The number of homes that were vacant, shuttered, all of the greenery around the houses was drying up -- it was a really sad state of affairs," she said. "Over time, I'm seeing as I go through neighborhoods that things are getting a little bit better."
While foreclosures have become a legislative afterthought rather than a campaign talking point, Woodhouse said many homeowners are still struggling and argues Nevada should keep the program going for another two years.
"Nevada has not rebounded as quickly as other states," she said. "You don't jump ship so soon."
Foreclosure mediation, which is run by the Nevada Supreme Court and forces lenders to the negotiating table with borrowers, helped about 40 percent of participants keep their homes at its peak in 2010. The program is projected to have a 15 percent success rate by 2017, and the cost is pegged at $840 per mediation now -- up six-fold from $135 during the peak year.
National on 05/18/2015