Housing collapse will result in new types of 'declining cities'

U.S. metropolitan areas which have suffered the steepest drops in housing prices are poised to endure long-term deterioration similar to how certain cities in the Rust Belt were permanently damaged by the decline of manufacturing.

According to a new report published by the Research Institute for Housing America, a division of the Mortgage Bankers Association, a new kind of "declining city" will emerge in the U.S. that will witness neighborhoods with high rates of vacancies and a sustained drop in population.

Indeed, certain urban and suburban areas in California, Nevada and Arizona will become like the fading old post-industrial cities in the East like Cleveland, Buffalo and Detroit.

"Some neighborhoods are going to suffer tremendously or are never going to come back or come back very, very slowly," said James R. Follain, senior fellow at the Rockefeller Institute of Government and author of the study. (more)