Merced Sun-Star
Planners offer forum for high-speed rail...Scott Jason
Residents will be able to offer their thoughts on the proposed high-speed rail system during a public meeting March 18.
The rail system's planners are beginning to work on the report that will chronicle the project's effects.
The meeting, which will focus on the Merced-to- Bakersfield leg, will be from 3 p.m. to 7 p.m. at the Merced Community Senior Center, 755 W. 15th St.
Besides attending the meeting, residents can offer comments three other ways:
submit them through www.cahighspeedrail.ca.gov;
e-mail them with the subject line "San Jose to Merced HST" to comments@hsr.ca.gov; or
mail them to Dan Leavitt, Deputy Director, ATTN. San Jose to Merced, California High-Speed Rail Authority, 925 L St., Suite 1425, Sacramento, CA 95814.
Comments can be sent through close of business April 10.
Rain or not, Merced Irrigation District cuts water to growers
Growers will get about the same as last year but that may change...CAROL REITER
Despite recent rains, and a forecast for more rain in the Valley and snow in the mountains, the Merced Irrigation District voted Tuesday to cut water allotments to growers.
Hicham Eltal, assistant general manager for water resources for MID, gave a report to the MID board about the critical water shortage the district again faces this year.
Eltal showed two long-range weather forecasts for the months of March and April, and the two forecasts were completely different from each other. One showed colder and wetter months, the other warmer and drier.
"As far as I can tell, it's 50/50," Eltal said.
But the snowpack in the watershed that feeds the Merced River is at only 68 percent of normal, and that led Eltal to ask the board to face a worst-case scenario.
"The reservoir is 100,000 acre-feet behind last year," Eltal told the board. An acre-foot of water is around 326,000 gallons of water or a year's supply for an average family in the Valley.
Because of the scanty snowpack and the low reservoir, Eltal asked the board to again OK a reduction to growers of 2.5 acre-feet of water per net irrigated acreage. That was the amount allotted to growers last year.
But Suzy Hultgren, an MID board member, said she thought the water should be on gross acreage, not net irrigated acreage.
The difference is that some acreage that growers own might be fallow, or used to store equipment or hay. The growers would get water for the total acreage they own, not just the acres irrigated. Hultgren said this distinction was important because some of the land may go back into production.
"If I'm storing hay on it this year, that doesn't mean I can't plant it next year," she explained.
The board passed a motion to restrict the acre-feet to 2.5 per acre. But that isn't written in stone.
"We can always loosen -- it's hard to tighten," said Tim Pellissier, board president, adding that a lot of rainfall and snow in the mountains could ease restrictions to growers.
The board also discussed the fact that a water rate increase protest packet had been sent to all growers in the mail. Growers who oppose a water rate increase should send back the ballot, which is a protest ballot only. The hearing on the water rate increase will be held April 21, and there's a locked ballot box at the main office of MID, 744 W. 20th St. in Merced.
No date for turning on the irrigation water was discussed because recent rains have alleviated most growers' need for water in early March.
Modesto Bee
High-speed rail's first leg: Bakersfield-Merced...last updated: March 03, 2009 01:44:06 PM
VISALIA, Calif. — Officials of the California High-Speed Rail Authority say a flat, straight stretch through the San Joaquin Valley connecting Merced and Bakersfield will likely be the first completed.
Regional Manager Thomas Tracy told the Visalia City Council Monday that the 800-mile project will be built in eight phases. The first segment, due by 2015, would stretch from Bakersfield to Merced on an initial run from Anaheim to San Francisco.
"The Bay Area to Anaheim will be the backbone of the system," said Bryn Forhan, who is working with the authority on outreach and communcation.
At its full 220 mph speed, the normally three-hour car trip from Merced to Bakersfield would take 45 minutes.
California voters approved $10 billion in bond financing for the project, and $8 billion more is in the federal stimulus bill.
The train eventually would travel from San Francisco to Los Angeles in 2 hours, 40 minutes. Subsequent routes will link with Sacramento.
Fresno Bee
ESA Protections Restored by President Obama...National Audubon Society, Press Release 
Statement of Betsy Loyless, Senior Vice President, National Audubon Society WASHINGTON, March 3 /PRNewswire-USNewswire/ "Much needed change is becoming reality at the Interior Department. For years, the previous administration undermined science and stoked a culture of corruption at Interior. President Obama today helped restore sound science and good judgment with the stroke of a pen."
"Global warming and habitat destruction are pushing more and more species toward the brink of extinction. The President's actions will help ensure America's wildlife has a fighting chance."
During remarks at the Department of the Interior today, President Obama announced he was signing a memorandum to "help restore the scientific process to its rightful place at the heart of the Endangered Species Act."
The memorandum, which the White House sent out this afternoon, reverses a move made by the Bush administration in December.
Audubon decried the Bush rule as most significant, detrimental change to the Endangered Species Act in years. Last December, Audubon urged then President-elect Obama to take this action.
The Bush rule eliminated the requirement for consultation with federal biologists on projects that could affect imperiled animals and plants. The plan allowed action agencies (e.g. the Department of Transportation) to decide for themselves whether projects they permit or license might harm endangered species.
During the public comment period, Audubon submitted a 12-page analysis examining the federal government's own data and specific examples from around the nation, leading Audubon to conclude the proposal was "based on false assumptions, unsupported by data, and was otherwise fatally flawed."
The strongest federal safeguard against the extinction of bird species in the United States is the ESA. Enacted in 1973, the ESA has helped save some of America's most critically imperiled birds and wildlife, including species like the bald eagle, the peregrine falcon, the gray wolf, the grizzly bear, and the whooping crane.
Sacramento Bee
High court ruling limits environmentalists' challenges to logging...Michael Doyle
WASHINGTON – A closely divided Supreme Court on Tuesday limited environmentalists' ability to challenge Forest Service rules in a case that arose from a controversial Sequoia National Forest salvage logging project.
The so-called Burnt Ridge project in the California forest has long since been resolved. The court's 5-4 ruling Tuesday, though, could affect hundreds of other forests nationwide with restrictive guidelines on who has the power to sue.
"The Burnt Ridge project is now off the table," Justice Antonin Scalia noted from the bench. "The parties settled, the timber sale is not going to happen, and the (environmentalists) can no longer claim that they are at risk of injury from it."
The 15,000-member Earth Island Institute had joined others, including the much-smaller Sequoia ForestKeeper, with 100 or so members, to challenge Forest Service plans for logging on Burnt Ridge.
The 238-acre region burned during a large forest fire in the summer of 2002.
Environmentalists sued, and the Forest Service agreed to withdraw the Burnt Ridge project.
Even so, a federal judge imposed a nationwide injunction that blocked the Forest Service from applying its exemptions for any small logging project.
In the short term, the court's ruling in Summers v. Earth Island Institute means that the Forest Service again can apply Bush administration exemptions limiting public hearings and appeals on salvage logging projects of fewer than 250 acres and forest-thinning projects of fewer than 1,000 acres.
More generally, the ruling will make it harder for environmentalists – and others – to have the so-called "standing" to sue. Standing means that someone must have a concrete and particular harm before he can get his day in court.
Sacramento's subprime loan crisis may be ending, analyst says...Jim Wasserman
A significant new indicator hints that as Sacramento was among the nation's first housing markets to stumble and fall, it may now be among the first to point the way out.
Tuesday, a leading state economist said the subprime loan crisis that triggered the housing and economic downturn – while destroying dreams of homeownership in thousands of Sacramento-area households – has largely run its course in the region.
"In Sacramento County we're through 80 percent of the subprime resets," said Leslie Appleton-Young, chief economist of the California Association of Realtors.
That's the highest percentage for a housing market in California, which has been particularly devastated by subprime borrowing and the foreclosures it spawned. Analysts say it's too soon to talk about a housing recovery based on the subprime reset statistic, but "it means that day of stabilization is closer," said Andrew LePage, analyst for housing market tracker MDA DataQuick. His firm, too, believes California will have weathered the worst of its massive subprime losses by the end of this year.
California is through 67 percent of its subprime resets, the CAR report indicated.
Subprime loans became a dominant mortgage product at the height of the housing boom to make expensive homes affordable to people with troubled credit histories. The loans were sold with low initial "teaser" rates that reset after two or three years to higher, often unaffordable monthly payments. Thousands of households, assured that they could refinance in two years, instead defaulted when falling values blocked that option.
Appleton-Young made the report to several hundred area real estate agents gathered Tuesday in Sacramento, saying the numbers signal that when it comes to subprime mortgages, the bad news is mostly out of the way. The optimism stems from the idea that most of those whose mortgages have reset already have been foreclosed upon, already are in the process, or continue to make their payments.
But she warned that the region still faces longer-term threats of resetting "Alt A" loans, a category between subprime and prime loans, and risky pick-a-payment loans that can grow larger even as they are paid off.
Thousands of those loans are expected to cause problems for Sacramento-area borrowers in 2010, experts say. Rising joblessness, too, is adding to stresses on mortgages.
Jeff Michael, director of the Business Forecasting Center at University of the Pacific, agreed Tuesday that waning subprime resets signal that "we've gone further through the cycle" than other regions.
"If we can get the jobs market to settle down a little, conditions will be in place to find a bottom in the housing market," he said.
Appleton-Young's address to the Sacramento Association of Realtors came on the eve of the Obama administration's unveiling of new details of its $275 billion housing rescue plan. The plan aims to help up to 9 million U.S. households avert foreclosure with refinancings and lower monthly payments. Among the specifics being announced today are guidelines that banks and lenders must use when modifying loans for borrowers.
But many have criticized the plan for being too restrictive in hard-hit states like California.
Tuesday, home valuation service Zillow.com estimated that only about 18 percent of Sacramento-area borrowers will qualify to refinance under the Obama plan. The majority will be left out, Zillow spokeswoman Alison Paoli said in a statement. The reasons range from not facing any mortgage stresses to owing much more than their homes are worth.
The Obama plan limits refinancings to those who owe about 5 percent more than their homes are worth. But tens of thousands of California homeowners owe up to 30 percent or 40 percent more than their homes are worth.
Appleton-Young, in her annual real estate forecast, cited prospects for a "really tough" economy throughout 2009.
But she said the capital is a bright spot for rising home sales, and one of the state's friendliest markets for first-time buyers and investors who pay cash. More than 70 percent of its renters can now afford the county's median price of $169,666 for a resale home in January, the economist said. The median, where half cost more and half less, is down by 53 percent from the market's peak in late 2005, the economist reported.
The steep decline is attributable to approximately 20,000 foreclosures in Sacramento County in 2007 and 2008, many of them related to subprime lending.
Appleton-Young predicted that sales of existing homes will rise 8 percent in California this year, propelled by the still-large numbers of distress sales in inland California markets that include the Central Valley and Inland Empire. She said statewide median prices are likely to fall as much as 25 percent this year, while "firming up in stressed markets" like Sacramento.
As prices fall statewide it's created a major opportunity for first time buyers, said Appleton-Young. "They will be above 40 percent the next two years in California," she said.
New study: California has out of whack home price/income ratio...Pia Lopez, The Swarm
The foreclosure crisis is a California crisis -- along with a few other states. A new study out of the University of Virginia, "Foreclosures in States and Metropolitan areas: Patterns, Forecasts, and Pricing Toxic Assets," shows that clearly:
      In 2008, California had only 10 percent of the
      nation's housing units, but it had 34 percent
      of foreclosures.
California was vulnerable to foreclosures because it had, by far, the highest ratio of housing value to median income in the country. The median value of owner-occupied housing in 2007 was 8.3 times the median family income ($535,700/$64,563). The next highest was Nevada at 5.1. 
In 2000, the median housing value in California was 4 times the median family income. That's still high (the ratio should be about 3).
The worst is still to come: The study estimates that "66 percent of potential housing value losses in 2008 and subsequent years may be in California, with another 21 percent in Florida, Nevada and Arizona, for a total of 87 percent of national declines." 
The big question: As the economy recovers, will developers build and price houses for the income profile of the state? Or will they continue to build houses that require people to spend more than a third of their monthly income on housing? 
Stockton Record
S.J. board: County too parched for too long
Water conservation ordinance in works...Zachary K. Johnson
STOCKTON - Even though rain clouds filled the sky Tuesday morning, it was gloomier inside the County Courthouse as officials declared a drought in San Joaquin County after hearing recent storms have not made up for previous dry years.
Largely symbolic, the declaration doesn't trigger any response, but the Board of Supervisors also told staff to come back with an aggressive water-conservation ordinance, which would make possible mandatory water reductions of 15 percent or more, depending on the level of drought.
Only a small percentage of water used in San Joaquin County passes through the 32 water districts with 6,000 service connections in unincorporated county. Supervisors also gave the nod to phasing in water meters and coordinating with other water providers to get the word out on how to save water during a drought.
Recent storms brought some water, but precipitation levels and water piling up in the Sierra snowpack and local reservoirs are still below normal, said Mel Lytle, water resources coordinator for the county. "It will take a miracle March and April to bring us out of this drought," he said.
It's the beginning of the third year of drought, and already the groundwater level in eastern San Joaquin County is at the same level as it was at the end of a five-year drought that occurred from 1987 to 1992. "This is a big area of concern," Lytle said.
San Joaquin County is not alone in its water concerns. On Friday, Gov. Arnold Schwarzenegger declared a state drought emergency.
On Tuesday, the board directed its staff to work with other water providers in the county to pool resources in public outreach efforts and coordinate regional water conservation.
As it now stands, the county's conservation rules fall short of those other water agencies.
Proposed changes to the county ordinance would establish four tiers of water conservation, depending on drought conditions:
» Stage 1: Follow regular conservation measures prohibiting wasteful use during normal years.
» Stage 2: Reduce water use, voluntarily, by 10 percent in below-normal years.
» Stage 3: Reduce water use by 15 percent in serious drought years or pay surcharges.
» Stage 4: The board can declare mandatory reductions of 30 percent or more during critical water shortages.
Staff will return with a revised ordinance at a later meeting. Tuesday's declaration of drought would have called for Stage 3 measures, Public Works Deputy Director Steve Winkler said.
It will not require further action for the county to start phasing in meters at its water districts. Most county water is drawn from wells.
Growth seen fueling home construction
Pacific forecast: Excess housing to shrink in 2010...Bruce Spence
STOCKTON - Home building has slowed to a crawl these days, but in the not-too-distant future, builders are going to have to start jumping again to keep up with population growth.
That was the reading of Jeffrey Michael, director of University of the Pacific's Business Forecasting Center, at a Tuesday morning forum at Pacific about current housing challenges and future needs.
"This decade is a topsy-turvy decade," he said.
He outlined a housing boom and bust that started in 2000 from a median home price of $130,000 in San Joaquin County to a high of more than $437,000 in mid-2006 and then driven by foreclosure prices back down - so far - to $179,000.
"Home prices are back in the normal range now in relation to income," Michael said.
He also outlined how home construction plummeted in the housing downturn from a high of about 6,500 houses in 2004 to a projected 800 this year and dropping to 500 in 2010.
Yet excess housing in this foreclosure period will be bought up next year, and expected population growth will renew the demand to at least 5,300 new homes a year to keep up, he said. Michael cited state Department of Finance projections for San Joaquin County's population to climb from more than 741,000 next year to 1.2 million over the following 20 years.
He predicted that the county will certainly see a renewed period of rapid home construction from 2015 to 2020.
But John Beckman, CEO of the Building Industry Association of the Delta, said that rising regulatory fees, when added to land purchase, entitlement, development, construction and administrative overhead costs, have made it so costly to build in the current housing market that home construction doesn't make financial sense for builders.
"Home building is not being done in this county, and I can't predict when it will start to occur again," he said.
When cities find themselves strapped for money, builders are an easy place to get money, he said.
"We're at the mercy of local government," which can say, if a builder wants to build, he has to pay the fees, Beckman said.
If local governments want home construction again, they're going to have to change policies, he said.
Michael said it will be a challenge for builders to meet the need for new homes unless building costs drop or housing prices climb again by at least 25 percent. Housing impact fees for home developments have more than doubled since a decade ago, he said, rising from $23,000 per house in 1998 to $53,000 in the county.
Fees, which haven't dropped with home prices, will be an impediment to home construction, he said.
"Current fees are high - about one-third of a home's price - (and) exceed the median yearly household income in the county and equal 30 years' worth of a home's property taxes," Michael said.
He said it probably would take at least until 2015 for home builders to gear up again to produce 5,000-plus new homes a year in San Joaquin County.
Rani Isaac, a California Research Bureau economist who makes quarterly foreclosure reports to the state Legislature, told the group of about 60 people who attended the forum that the first question she always gets is: "When will this end?"
"I expect 2009 to be a little worse - not much," she said. "I'd like to say this will be dropping, but it won't be for a while."
From 2007 through 2012, she forecast, 1.4 million California homes will be lost to foreclosures and short sales, far more than initially feared.
"The (foreclosure) moratoriums, from what I can see, have just delayed the inevitable," she said.
Housing prices won't be stabilizing, either, until employment stabilizes, she added.
"It's very hard to find good news," Isaac said.
Retired schoolteacher Mickey McGuire of Tracy thought he may have found a hint of some.
He liked hearing Michael say that home prices were at least in line with area incomes again.
McGuire, who is a landlord and interested in investment opportunities, said it was looking as if this might be a good time to buy.
"If you want to hang in there," Michael told McGuire after the forum, "I think it's a good time to go out and buy some property."
San Francisco Chronicle
Fishermen brace for new ban on ocean salmon...Peter Fimrite
SANTA ROSA -- The bad news about fishing was couched in numbers and graphs, study results and scientific jargon, but there was no mistaking the message: Californians won't be eating much local salmon this year.
That was the gist of a day-long meeting in Santa Rosa Tuesday at which state Department of Fish and Game biologists told fishermen, conservationists and others that surveys and studies show the state's salmon fishery in near-complete ruin.
Biologists estimated only 66,000 adult salmon returned to the Sacramento River to spawn last fall - only the second time in 16 years that the number of fall-run chinook failed to meet the Pacific Fishery Management Council's goal of 122,000 to 180,000 adult fish.
In 2007, a similar count was so dismal that federal regulators banned ocean fishing in California and most of Oregon last spring and summer, the first total closure in California history. Experts are predicting barely enough spawning fish next fall to meet the 122,000 goal - and that's only if ocean fishing is banned this year.
It is crushing news for a fishing industry that was in trouble even before the nation went into recession.
Fort Bragg fisherman Bill Forkner argued Tuesday that salmon hatcheries were supposed to ensure that fishing would continue in exchange for the dams that state and federal governments put up on the Sacramento and San Joaquin river systems.
"Fishermen are ecologists. We want things right, and we don't want to catch the last fish," said Forkner, 54. "But we also want a chance to make a living at what we've done all our lives. They knew the wild fish wouldn't survive when they put up the dams, but they promised us that we would have something to fish."
Chinook that spawn in the fall, traditionally the largest salmon run of the year, are the same ones that are fished out of the ocean during the spring and summer.
The fabled fall run has been in steady decline since 2005, according to data released Tuesday, despite the addition of hundreds of millions of hatchery-raised chinook, including 32 million last year.
There are no reliable studies showing how many of the surviving fish in the ocean and rivers are from hatcheries. But a study last year of fish caught by sport fishermen found that 71 percent of them were raised in hatcheries. Regardless of the influence of hatcheries, very few chinook of any kind are surviving.
State and federal scientists believe that warmer ocean conditions have reduced the food supply for the fish. Record exports of water from the Sacramento-San Joaquin River Delta coincided with major declines in chinook, a factor that environmentalists and fishing representatives believe is the major culprit.
Studies are being done on stream flow, water oxygen levels, temperature, gravel, toxic substances, food, predation and chemical contamination in an attempt to isolate problems in the Sacramento River system.
The answers can't come soon enough for those whose livelihoods depend on it.
"It is taking them a real long time to figure out what the problems are," said Don Platt, a 49-year-old fisherman from Fort Bragg. "In the meantime, we're not fishing and a whole lot of fishermen are going out of business."
The Pacific Fishery Management Council will discuss another possible salmon fishing ban during its annual meeting that begins Sunday in Seattle. The National Marine Fisheries Service is expected to make a final decision on fishing quotas by May 1, when California's salmon fishing season normally begins.
Los Angeles Times
Obama overrides Bush rule on Endangered Species Act
Technically, federal agencies still have the option of consulting experts on construction projects' effect on threatened wildlife, but the president is requiring it to be exercised in every case...Jim Tankersley
Reporting from Washington — President Obama on Tuesday overrode the Bush administration on a key step in applying the Endangered Species Act, restoring a requirement that federal agencies consult with experts before launching construction projects that could affect the well-being of threatened species.
Environmentalists said reinstating the requirement blocks the Army Corps of Engineers, the U.S. Forest Service and others from "nibbling away" at crucial wildlife habitat. Business and industry groups, on the other hand, warned that Obama's action could hamper road-building and other projects that would help jump-start the economy.
Bush's rule change, finalized in December, allowed federal agencies to determine on their own if projects would jeopardize endangered species, instead of consulting with expert biologists, as had been required for the last three decades. It gave agencies the option of calling on experts from the Fish and Wildlife Service and the National Marine Fisheries Service.
Obama made such consultation mandatory. He announced the change during a celebration of the 160th anniversary of the Interior Department, telling cheering employees it would "restore the scientific process to its rightful place at the heart of the Endangered Species Act." Technically, the president did not overturn the Bush rule, which would require a lengthy process. Instead, he issued a memorandum instructing agencies to exercise the consultation option in every instance, until the Interior and Commerce departments can reconsider the Bush rule change.
"This is very good news for endangered species," said Andrew Wetzler of the Natural Resources Defense Council. "The regulations that President Bush issued were clearly illegal, and they were bad policy to boot."
Michael J. Bean, director of wildlife programs for the Environmental Defense Fund, said the forced consultation with expert biologists would temper the ambitions of the Army Corps of Engineers, the Forest Service, the Bureau of Reclamation and other agencies that "have historically had pretty strong mission drives, which have maybe overwhelmed concerns about species."
Consultations have resulted in a variety of measures to preserve species that could be imperiled by government projects, including steps to protect the endangered San Clemente Island loggerhead shrike from the effects of a nearby Navy ship-to-shore live-fire range.
An Interior decision earlier in Bush's presidency allowed the Forest Service and Bureau of Land Management to skip the consultations when setting certain fire management policies. A 2008 government review found that both agencies frequently failed to consider key aspects of the policies' effects on species.
Industry lobbyists said Obama's decision to mandate the consultations would add "red tape" to infrastructure projects funded by the economic stimulus bill. "This directive throws the brakes on projects," said William L. Kovacs, the U.S. Chamber of Commerce's vice president of environment, technology and regulatory affairs.
Even clean energy plans, such as wind farms, could be slowed down, said Michael D. Olsen, a former Bush Interior official who now lobbies for energy interests at Bracewell and Giuliani. "It's not just projects that folks would term non-green," he said. "It's the green projects too."
Environmentalists scoffed at those warnings. "This kind of scientific consultation was how the Endangered Species Act worked for 30 years," said Athan Manuel, director of lands protection for the Sierra Club. "So I think that's sour grapes."
Full text of President Obama's memo on endangered species...Top Of The Ticket...Blogs
Why wait for the Federal Register?
President Obama visited the Interior Department today to celebrate the 60th anniversary of its first Interior secretary. He got a warm reception from employees. He reminisced about his first visits to national parks as an 11-year-old, which, btw, was the same time Obama's vice president, Joe Biden, was first entering the Senate as a very young man.
"That [park trip] was an experience I will never forget," the new president said. "It's an experience I want for my daughters and all our daughters and sons."
Obama also announced key changes in implementing the endangered species law. He said his memo would "help restore the scientific process to its rightful place at the heart of the Endangered Species Act." (The full memo text is below; paragraphs added.) More undoing of last-minute changes by the previous administration.
The White House, March 3, 2009
SUBJECT: The Endangered Species Act
The Endangered Species Act (ESA), 16 U.S.C. 1531 et seq., reflects one of the Nation's profound commitments. Pursuant to that Act, the Federal Government has long required a process of broad interagency consultation to ensure the application of scientific and technical expertise to decisions that may affect threatened or endangered species.
Under that interagency process, executive departments and agencies (agencies) contemplating an action that may affect endangered or threatened species have long been required, except in certain limited circumstances, to consult with, and in some circumstances obtain the prior written concurrence of, the Fish and Wildlife Service (FWS) and/or the National Marine Fisheries Service (NMFS) -- the expert agencies that have the primary responsibility to ensure that the ESA is implemented in accordance with the law.
On December 16, 2008, the Departments of the Interior and Commerce issued a joint regulation that modified these longstanding requirements. See 73 Fed. Reg. 76272. This new regulation expands the circumstances in which an agency may determine not to consult with, or obtain the written concurrence of, the FWS or NMFS prior to undertaking an action that may affect threatened or endangered species. But under the new regulation, agencies may continue the previous practice of consulting with, and obtaining the written concurrence of, the FWS and NMFS as a matter of discretion.
I hereby request the Secretaries of the Interior and Commerce to review the regulation issued on December 16, 2008, and to determine whether to undertake new rulemaking procedures with respect to consultative and concurrence processes that will promote the purposes of the ESA. Until such review is completed, I request the heads of all agencies to exercise their discretion, under the new regulation, to follow the prior longstanding consultation and concurrence practices involving the FWS and NMFS.
This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person. Agencies shall carry out the provisions of this memorandum to the extent permitted by law and consistent with statutory authorities. The Secretary of the Interior is hereby authorized and directed to publish this memorandum in the Federal Register.
(signed) -- Andrew Malcolm
Drought? I'll drink to that...Patt Morrison
It's raining. The snowpack in the Sierra Nevada is at 80% of normal, not including today's storms. And Arnold Schwarzenegger has declared a statewide drought emergency.
Those things aren't necessarily contradictory. But the playing of water politics that muddies the real drought message.
Say "drought emergency" and you could get federal money. Say "drought" and Republicans think it's time to lift endangered species protections and build more dams. Say "drought" and you don't have to understand the nuances and history of California water.
Drought has changed California more than earthquakes; drought in the 19th century killed off the cattle culture. Drought, and the defiance of it, dictate where the water goes and where it doesn't. It draws political lines between farmers and city people, between developers and environmentalists.
Southern California officials have been bragging about how L.A. is making do with about the same water it had 20 years and millions of people ago. Absolutely true, but a good bit of those savings have been passive, through low-flush toilets and low-flow shower heads. We still use a lot more water outside our houses than we do inside, for grassy lawns and mossy gardens that are as unsuited to this climate as giraffes in the Yukon.
When the words "drought emergency" gets uttered, the words "cuts" and "rationing" have followed closely behind. My colleague Bettina Boxall wrote about the political stratagems behind drought.http://www.latimes.com/news/local/la-me-drought3-2009mar03,0,7581459.story
We've gamed California water for years. Los Angeles civic leaders -- including the first publisher of this newspaper -- finagled and frightened Angelenos into believing the city would dry up and blow away without an aqueduct, and voters approved bond measures to build it, and suck the water out of the Owens Valley.
Since then, we've turned many of our rivers into flood control channels; we wastefully flush away enough water to keep thousands of families clean and laundered, and rather than figuring out how to capture the water we have, some politicians would rather play drought politics.
So of course we're hearing about mandatory cutbacks. I am a big believer in water-saving; millions of Californians are. But while mandatory cutbacks of 10 or 20 percent sound politically bold and brave, they do nothing to acknowledge the people who are already careful with water -- nor do they really punish the profligate, who won't feel a pinch at all by cutting back 10 or 20 percent.
Before such mandatory cuts can be credible and feasible, all public officials have to take into account that there are a lot of ways to save at every point in the water system -- and not just at the bathroom sink. By the way, if you're not already turning off the water while you stand there brushing your teeth -- start now. Even thought it's raining.
As projects grind to a halt, home sites turn to wasteland
The dual weight of the credit crunch and the housing crisis prompt developers to abandon plans...Roger Vincent
By day, it's far too quiet at the site of a planned housing and retail development on a former Navy base in Oakland.
At night, neighbors can hear the thieves come out.
They rip out copper wire, haul away pipes and take anything else they can steal from dozens of buildings on the site, abandoned after Irvine developer SunCal Cos. fell victim to the economy.
It's a scene not uncommon throughout California, as residential construction grinds to a halt under the dual weight of the credit crunch and the housing crisis: a rusty chain the only barrier between the community and a half-built structure in Hollywood; a bare dirt lot in Pasadena; old stoves amid the trash at the site in Oakland.
"I hear hacking and see scary bonfires in the middle of the night," said Don Johnson, a retired Coast Guard employee who lives near the defunct Oak Knoll Naval Medical Center in Oakland.
Nearly 250 residential developments with a combined total of 9,389 houses and condominiums have been halted in California, according to research firm Hanley Wood Market Intelligence. The units, worth close to $3.5 billion, were in various stages of development.
Now, many are in bankruptcy or have been foreclosed by lenders. Developers have halted sales on an additional 370 new-home developments -- about 30,000 units worth $11.9 billion.
"It's a sad state of affairs," said Greg Doyle, regional director of Hanley Wood.
LandSource Communities Development, the parent company of the developer building the 21,000-home Newhall Ranch community near Santa Clarita, filed for Chapter 11 in June.
In Hollywood, a chain secures a seven-story building still sheathed in yellow insulation panels and surrounded by steel scaffolding.
The Madrone condominium and retail complex at Hollywood Boulevard and La Brea Avenue had been scheduled for completion this spring.
But the developer, John Laing Homes, stopped answering its phones weeks ago and on Feb. 19 filed for Chapter 11 bankruptcy protection.
Across the street, Tony Boon worried about the effect on Pink Pepper, a Thai restaurant he manages. He had hoped that residents, shoppers and employees at the complex would stop in for meals. Now his customers gaze out on the stagnant site.
"It should have been a beautiful building, but it's just kind of an eyesore," he said.
Similar sites abound.
On the edge of Old Pasadena, the Pasadena Athletic Club and an office building on Fair Oaks Avenue were demolished to prepare for a six-story hotel, condominium and retail project. Work halted last year when financing fell through, the developer's attorney said.
The dirt lot sits empty, surrounded by a chain link fence and green plastic netting.
In the Lincoln Heights neighborhood of Los Angeles, the contractor stopped work more than a year ago on Fuller Lofts, a $20-million transformation of a 1920s-era Fuller Paint warehouse into condos on San Fernando Road.
The developer, Livable Places, has gone out of business and blames high construction costs, tightening credit for home buyers and a glut of competition.
Walking away from partly completed projects is not unusual in a real estate downturn, said Don Walker, senior vice president of Irvine-based John Burns Real Estate Consulting. The difficulty, he said, is making sure health and safety issues are not ignored as the sites languish.
SunCal, the company that was supposed to revitalize the former Navy site in Oakland, concedes that its abandoned projects could be dangerous.
At its Oakland site, structures dating to World War II were to have been demolished by now to make way for 1,000 homes and a shopping center.
But workers walked off the job when their payments stopped, leaving behind piles of debris. A nine-story hospital the developers planned to raze was invaded by squatters.
In the Sacramento River Delta area of Contra Costa County at SunCal's planned Delta Coves housing development, blowing sand is filling in a new lagoon, and crucial water pumping systems are unmonitored.
"No one is manning those pumps," said Kevin Emigh, the county's assistant public works director. In theory, the pumps will operate without oversight, but no one will know whether they lose power or break, he said. Hard rains or rising groundwater could put the neighborhood next to Delta Coves at risk.
"More than 100 homes would flood" if the pumps didn't function, Emigh said.
Late last year, SunCal filed for Chapter 11 protection on more than 20 big real estate developments throughout the West, said Frank Faye, the developer's chief operating officer, although the company itself is not in bankruptcy.
At some of those projects, urgent problems include blowing dust and overgrown brush that could become a fire hazard. Busy public roads have been torn up and left that way, he said.
Faye and other SunCal executives blame failed investment bank Lehman Bros., saying that when Lehman declared bankruptcy, all funds to the projects were cut off.
SunCal has sued Lehman, hoping to persuade it to allow another investor to join the developments and restart the money spigot.
The lawsuit, filed in January, accused Lehman of "hoarding billions in cash" that could be used to address safety and maintenance problems.
A Lehman Bros. spokeswoman declined to comment on its role in Delta Coves or other SunCal projects, citing pending litigation between the two partners. But the company did file a motion to dismiss SunCal's bankruptcy suit.
Meanwhile, public officials and neighbors are losing heart -- and patience.
In Oakland, civic leaders had hoped that Oak Knoll, the project at the former Navy facility, would generate tax revenue and improve a struggling neighborhood.
"It would have changed the whole city," said Oakland City Councilman Larry Reid, who represents the area.
San Clemente, the site of another abandoned SunCal project, is suing the bonding company that insured the developer's public works projects, said City Manager George Scarborough.
Avenida Pico, one of the city's main thoroughfares, is now a partially paved street that ends in a jumble of sandbags and rutted dirt.
"Pico has been that way for two years," he complained.
Some developers facing Chapter 11 have been able to complete public works or at least secure their sites.
LandSource Communities Development, a Valencia company that prepares master-planned communities in north Los Angeles County, filed for bankruptcy protection but has moved ahead with improvements, spokeswoman Marlee Lauffer said.
Among the projects partially funded by its lender Barclays are the Magic Mountain Parkway Interchange on Interstate 5 and a new elementary school in Valencia, Lauffer said.
Others have not been so proactive.
In Anaheim, there are dusty lots in the "Platinum Triangle" near Angel Stadium where a mixed-use development of thousands of homes, stores and offices was planned.
Work on the development of more than 10,000 homes and 7 million square feet of commercial and office space stalled more than a year ago.
Chain-link fencing and cloth mark the boundary between the street and two chunks of land where Lennar Corp. has demolished buildings and built streets and other infrastructure.
Lennar is under orders from the Anaheim City Council to build a wall between the project and the street, and landscape it with trees and clinging vines. But work on the improvements has yet to start.
"It's going to be a long time before they have the economic strength to start again," Councilwoman Lorri Galloway said.
Washington Post
Obama Reverses Bush on Species Protection Measure...Juliet Eilperin
In a move that will subject a number of government projects to enhanced environmental and scientific scrutiny, President Obama is restoring a requirement that U.S. agencies consult with independent federal experts to determine whether their actions might harm threatened and endangered species.
The presidential memorandum issued yesterday, which marks yet another reversal of former president George W. Bush's environmental legacy, will revive a decades-old practice under the Endangered Species Act that calls for agencies to consult with either the Fish and Wildlife Service or the National Oceanic and Atmospheric Administration on whether their projects could affect imperiled species. On Dec. 16, the Bush administration allowed agencies to waive such reviews if they decided, on their own, that the actions would not harm vulnerable plants and animals.
Obama, who visited the Interior Department to commemorate its 160th anniversary, said he had instructed Interior and Commerce Department officials to review the Bush rules. In the meantime, according to the memorandum, officials should "follow the prior longstanding consultation and concurrence practices" that call for independent reviews. "The work of scientists and experts in my administration, including here at the Interior Department, will be respected," Obama said. "With smart, sustainable policies, we can grow our economy today and preserve the environment."
Environmentalists and scientists welcomed the move, but business officials said it could delay federally funded projects that could help revive the nation's economy: All of them agreed it would prompt a second look at several initiatives adopted by the Bush administration in its final months in office. Earthjustice lawyer Janette Brimmer, whose group had challenged the Bush rule in federal district court in California, said she expected that the new administration would reexamine two pending projects: a Bureau of Land Management plan for overseeing Oregon's forests, which was finalized on Dec. 30 and could affect protected species such as the northern spotted owl; and construction of the White Pine coal-fired power plant in Nevada. "I think the Obama administration now is going to take a step back on these projects. It needs to bring science back into the equation," Brimmer said, adding that her group will not drop its lawsuit until it can assess how the new policy is working. Francesca Grifo of the Union of Concerned Scientists, an activist group, said the switch would help guard against the potential conflicts of interest and lack of expertise that could color decision-making by any agency hoping to press ahead with a particular project. "After years of scientific scandal, the Interior Department and its partner agencies need desperately to regain credibility by making decisions with honesty, clarity and transparency," Grifo said. But William L. Kovacs, the U.S. Chamber of Commerce's vice president of environment, technology and regulatory affairs, said that reviving another layer of review "will result in even greater delays to projects -- including stimulus-backed, job-creating projects -- as agencies now grapple with the prospect of lengthy interagency consultations to determine, for instance, if a bridge project in Florida contributes to the melting of Arctic ice. This is such a departure from the spirit and the letter of the Endangered Species Act that we wonder if the law's drafters would even recognize it today." The latest policy shift follows several other administration actions revamping environmental policies, including a reexamination of fuel economy standards and offshore oil drilling; a new review of whether to grant California and other states the right to regulate greenhouse-gas emissions from vehicles; and the endorsement of a new international treaty negotiation on global mercury emissions.
House Natural Resources Committee Chairman Nick J. Rahall II (D-W.Va.), who had been seeking to overturn Bush's endangered species rule through legislation, called the announcement "one more indication that the new administration truly represents change for the better and is committed to the protection of our natural resources and our environment."
Officials said the move is unlikely to trigger broad use of the Endangered Species Act to regulate greenhouse-gas emissions. While the Bush rule specifically prohibited endangered species consultations on the basis of "global processes" such as climate change, an Interior official speaking on the condition of anonymity said that under the new policy, such a review would be triggered only if scientific evidence suggested "a causal connection" between emissions from a federal project and its effect on an imperiled species or an identifiable part of its habitat.
Obama Restoring Endangered Species Act Provision...Juliet Eilperin...44 The Obama Presidency...3-4-09
Today President Obama will restore rules requiring U.S. agencies consult with independent federal experts to determine if their actions might harm threatened and endangered species, according to an administration official who asked not to be identified, marking yet another reversal of President Bush's environmental legacy.
In December 2008, the Bush administration changed a longstanding practice under the Endangered Species Act by issuing rules that allowed agencies to move ahead with projects and programs without seeking an independent review by either the Fish and Wildlife Service or the National Oceanic and Atmospheric Administration. Environmentalists and scientists said this shift could allow agencies to press ahead with plans that could hurt already-vulnerable species across the country.
Today Obama will issue a presidential memorandum, an administration official said, that will direct departments to yet again consult with the two agencies on decisions that could affect imperiled plants and animals "while the Interior and Commerce Departments review the Bush rulemaking."
The move, the official said, "will restore the status quo ante and allow the Interior and Commerce Departments to determine whether a new rule should be promulgated that will again codify the longstanding consultation practice under the" Endangered Species Act.
House Natural Resources Committee Chairman Nick J. Rahall (D-W.V.), who had decried the Bush rule and had been trying to reverse it through the legislative process, hailed Obama's decision."I wholeheartedly support the president's proposal to restore the protections for endangered species that the Bush administration spent so many years trying to undermine," Rahall said in an interview. "It is one more indication that the new administration truly represents change for the better and is committed to the protection of our natural resources and our environment. I think we know who would have been the winner in this fox guarding the hen house scenario advanced by the Bush administration, and it would not be the hens."
Obama is scheduled to visit the Interior Department this afternoon, to commemorate the agency's 160th anniversary.Kieran Suckling, executive director of the Center for Biological Diversity, said the memorandum would have a tremendous impact.
"Endangered species are breathing a deep sigh of relief today," Suckling said. "The consultation process is the heart of the Endangered Species Act power. By reversing Bush's attempt to deregulate the consultation process, Obama restored oversight and balance and has given endangered species a good fighting chance of survival."
Controversy Over Yucca Mountain May Be Ending...Steve Vogel
More than two decades after Yucca Mountain in Nevada was selected to be the national nuclear waste repository, the controversial proposal may finally be put to rest by the Obama administration.
In keeping with a pledge President Obama made during the campaign, the budget released last week cuts off almost all funding for creating a permanent burial site for a large portion of the nation's radioactive nuclear waste at the site in the Nevada desert. Congress selected the location in 1987 and reaffirmed the choice in 2002. About $7.7 billion has been sunk into the project since its inception.
"Yucca Mountain is not an option, and the budget clearly reflects that," Stephanie Mueller, a spokeswoman for the Department of Energy, said yesterday.
Senate Majority Leader Harry M. Reid (D-Nev.), a staunch opponent of the Yucca project, called the Obama action "our most significant victory to date in our battle to protect Nevada from becoming the country's toxic wasteland."
Reid, who during primary season helped extract campaign promises from Obama and then-Sen. Hillary Rodham Clinton to stop Yucca Mountain, added: "President Obama recognizes that the proposed dump threatens the health and safety of Nevadans and millions of Americans. His commitment to stop this terrible project could not be clearer."
Less clear is what will happen next with the nation's growing stockpile of nuclear waste.
"That's a great question," said Geoffrey H. Fettus, an attorney with the Natural Resources Defense Council.
The budget provides no answers as to what the administration proposes to do with the approximately 57,700 tons of nuclear waste at more than 100 temporary sites around the country, or with the approximately 2,000 tons generated each year by nuclear power plants. The Yucca site was designed specifically to handle spent fuel rods from the nation's 103 nuclear generators.
"The new administration is starting the process of finding a new strategy for nuclear waste," Mueller said.
Keeping the waste at temporary sites is an option in the short term, but experts in the field say it will not serve as a long-term answer for the problem of radioactive waste, which will need to be kept safely stored for at least 1,000 years.
Others have advocated reprocessing much of the spent fuel, as is being done in France, but this too is fraught with problems, according to some experts.
Ultimately, Fettus said, the government will have to find a new site or sites for permanent storage of nuclear waste.
The Nuclear Energy Institute, which represents the nuclear industry, favors the creation of a "blue-ribbon commission to assess where we go," spokesman Steve Kerkeres said.
The Bush administration last year submitted a license application to the Nuclear Regulatory Commission and hoped to have the repository operating by 2020. The Obama administration is not withdrawing the application because of concerns about lawsuits but, nonetheless, insists the Yucca Mountain project will not go forward.
New York Times
Bid to Undo Bush Memo on Threats to Species...CORNELIA DEAN
A few weeks before he left office, President George W. Bush told federal officials that, in effect, they did not have to bother getting the advice of wildlife experts before taking actions that might harm plants or animals protected by the Endangered Species Act.
On Tuesday, President Obama said that, in effect, they did.
At a visit to the Interior Department marking its 150th anniversary, the president said he had signed a memorandum directing the Interior and Commerce Departments to review a regulation that the Bush administration issued Dec. 16.
The regulation lifted longstanding requirements that agencies contemplating actions that might affect endangered species consult with scientists from the Fish and Wildlife Service and the National Marine Fisheries Service and to take their guidance into account.
Until the review is complete, Mr. Obama’s memorandum says, agencies must return to the former practice of seeking and acting on scientific advice.
In brief remarks, the president said he had signed the memorandum to “help restore the scientific process to its rightful place” in the working of the Endangered Species Act.
“We should be looking for ways to improve it, not weaken it,” Mr. Obama said of the act, according to a pool report. The president said it was “false” to say people must choose between economic growth and environmental protection.
The announcement drew loud applause from the audience of about 500 who had gathered for the anniversary ceremony. Thousands of other employees watched by teleconference and video, the Interior Department said.
But in a statement, Bill Kovacs, the vice president for environment, technology and regulatory affairs of the U.S. Chamber of Commerce, condemned the action as an unreasonable interference with needed projects.
“While real Americans are looking for jobs, Washington bureaucrats are debating if, for instance, a bridge project in Florida contributed to the melting of Arctic ice,” Mr. Kovacs said.
Arctic ice entered this debate last year, when polar bears were listed as a threatened species under the act. Critics said that as a result, the Endangered Species Act could in theory be applied to stop anything that might contribute in even a small way to global warming.
Republicans in Congress said Mr. Obama’s action could lead to needless delays in projects financed by the stimulus package.
But Representative Nick J. Rahall II, Democrat of West Virginia and chairman of the House Resources Committee, called Mr. Obama’s memorandum “a change for the better.”
Environmental groups agreed. Kieran Suckling, executive director of the Center for Biological Diversity, called the shift “welcome news.”
Janette Brimmer, a staff lawyer with Earthjustice, a nonprofit legal group that has challenged the Bush change in court, said the memorandum was “an important first step.”
Before the Bush administration’s action, Ms. Brimmer said, when agencies were told their proposals risked harming a listed species, they could ignore the advice but risked being fined for “an illegal take” if the species was harmed.
If the agencies acted on the scientific advice by, say, modifying their plans, they could obtain “an incidental take permit,” exempting them from penalties.
A rider undoing the Bush change has been attached to the budget bill, and if it passes, the change would be undone. But Ms. Brimmer said another bill had also been proposed that would reinforce the Bush change.
Because of this uncertainty, she said, Earthjustice will continue to press its lawsuit, which is being heard in the Federal District Court for the Northern District of California.
Ms. Brimmer said four suits challenging the change were pending in the court, three by environmental groups and a fourth by several states, including New York, New Jersey and Connecticut.
More Than 8.3 Million U.S. Mortgages Are Under Water (Update3)...Dan Levy
More than 8.3 million U.S. mortgage holders owed more on their loans in the fourth quarter than their property was worth as the recession cut home values by $2.4 trillion last year, First American CoreLogic said.
An additional 2.2 million borrowers will be underwater if home prices decline another 5 percent, First American, a Santa Ana, California-based seller of mortgage and economic data, said in a report today. Households with negative equity or near it account for a quarter of all mortgage holders.
“We have way too much supply and not enough demand,” Sam Khater, senior economist for First American, said in an interview. “People aren’t going to purchase a home as long as prices keep falling, and someone who is worried about their job isn’t going to purchase a home either.”
Prices in 20 U.S. cities fell 18.5 percent in December from a year earlier, the fastest drop on record, according to the S&P/Case-Shiller index. Sales of previously owned homes, which account for about 90 percent of the market, fell in January to the lowest since 1997, and new-home purchases plunged to the lowest since records began in 1963, the National Association of Realtors and Commerce Department said.
The total value of residential properties in the U.S. fell to $19.1 trillion by the end of 2008, down from $21.5 trillion a year earlier, First American said. California lost more than $1.2 trillion in value last year, accounting for roughly half of the national decline in housing values.
California Leads
U.S. foreclosure filings exceeded 250,000 for the 10th straight month in January, RealtyTrac Inc. reported, and payrolls plunged by 598,000, pushing the unemployment rate to the highest since 1992, according to the Labor Department.
An average of 230,000 borrowers a month slid to negative equity in the fourth quarter of 2008, First American said. California led with 43,000, followed by Texas with 16,000, Nevada with 15,000, and Florida and Virginia each with 14,000. New negative equity borrowers may rise to 250,000 a month in the first half of the year if prices continue falling, Khater said.
President Barack Obama has proposed a $275 billion plan intended to help as many as 9 million troubled borrowers refinance or restructure their loans. About $75 billion would be used to rescue homeowners by agreeing to pay lenders for altering troubled mortgages while reducing borrowers’ interest rates as low as 2 percent.
New Guidelines
The initiative would require applicants for loan modifications to fully document their income with pay stubs and tax returns, and sign an affidavit attesting to “financial hardship,” according to documents released by the U.S. Treasury in Washington today. The second, larger part of the plan relies on government-run Fannie Mae and Freddie Mac to refinance loans.
Obama also supports revised U.S. bankruptcy rules that would let judges reduce mortgages on primary residences to fair-market value, if borrowers pay their debts under a court-ordered plan.
At least 7.6 million mortgage holders won’t qualify because they are underwater by more than the 5 percent threshold allowed in Obama’s proposals, according to an estimate by online valuation service Zillow.com.
“None of this is enough for people who are so upside down that they won’t have positive equity,” Khater said. More than 2.2 million U.S. borrowers have “severe negative equity,” or loans worth 125 percent or more of the property’s value.
Broad Geography
The geographical distribution of underwater mortgages is broadening beyond states in the U.S. West and Florida, where rapid price appreciation was fueled by subprime lending, to areas in the South and Midwest, Khater said. Cities such as Atlanta, Chicago, Dallas and Cleveland will have an increasing share of homes with negative equity if home values drop, he said.
California had the most underwater borrowers in the fourth quarter with 1.9 million, followed by Florida with 1.3 million, Texas with 497,000, Michigan with 459,000 and Ohio with 435,000, First American said.
Nevada had the highest share, at 55 percent. Michigan was second at 40 percent, followed by Arizona at 32 percent and Florida and California at 30 percent, said First American.
New York had the lowest share of underwater mortgages at 4.7 percent. Connecticut was at 9.1 percent and New Jersey was at 9.7 percent.
First American compiles its negative equity report from almost 42 million properties with mortgages and covers single- family homes, cooperatives, condominiums, town homes and attached properties up to four units. The estimates account for 85 percent of all mortgages in the U.S. and the data includes homes priced from $70,000 to $1.25 million.
CNN Money
1 in 5 mortgages 'underwater'
Report shows uptick in Americans with mortgages whose property values are less than what the borrowers owe...Julianne Pepitone
NEW YORK (CNNMoney.com) -- The dramatic decline in the housing market has hit Americans hard: 20% of people with mortgages owe more than their home is worth, according to a report released Wednesday.
More than 8.3 million U.S. mortgages were "underwater" as of December, said research firm First American CoreLogic. Three months earlier, 18% were underwater.
The phenomenon is exploding beyond bubble markets such as California, Florida, Arizona and Nevada, according to Sam Khater, senior economist for CoreLogic.
"As of December, home prices are declining in 75% of all metro markets, up from a third of those markets last March," Khater said.
Another 2.2 million homeowners are within 5% of negative territory, according to CoreLogic. These borrowers are prime candidates for refinancing under President Obama's foreclosure prevention plan.
Details on Obama's plan are expected to be released Wednesday. The administration has indicated that the plan will allow borrowers with between 80% and 105% loan-to-value ratios - near underwater and slightly underwater borrowers - to refinance their conforming loans, allowing many to lower their mortgage payments.
Anyone who is more underwater may qualify for a loan modification, where monthly mortgage payments would be reduced to 31% of gross income.
State totals: Of all the states, California has fared the worst. Homeowners in the beleaguered state lost more than $1.2 trillion in housing value last year, accounting for roughly half of the national decline.
California also led in the number of underwater borrowers: 1.9 million. It was followed by Florida (1.3 million), Texas (497,000), Michigan (459,000) and Ohio (435,000).
Those five states comprised more than 50% of the country's negative equity mortgages, the report said.
According to the CoreLogic report, home prices show little sign of stabilizing but declines in some of the worst-hit markets, such as the Central Valley of California, have recently lured buyers looking for bargains. But demand has not grown enough to boost prices, according to Khater.
"The supply must be whittled down more before prices can begin to stabilize," he said.
Outlook: As of the end of 2008, the total value of residential properties was $19.1 trillion, down $2.4 trillion from December 2007.
The report speculated that, over the next few months, the largest increase in underwater borrowers will come in states that have yet to record big home-price declines. The bubble states already have such high percentages of underwater borrowers and prices have fallen so far that only incremental increases should occur.
But the pace should quicken in states, such as New York, New Jersey, Montana and Hawaii, in which underwater borrowers still only account for fewer than 10% of all loans