The greater New York area stands to lose more than $10 billion as a result of the recent subprime mortgage crisis, a new report says.

The region covering New York City, Northern New Jersey, and Long Island will be more severely impacted than other metropolitan areas in 2008, according to the study released yesterday by the U.S. Conference of Mayors.

This economic slowdown will lead to lower taxes in New York, the report says, estimating that New York State could lose as much as $686 million in property taxes, $97 million in sales tax, and $47 million in transfer taxes next year. “The foreclosure crisis is no longer just about mortgages — entire neighborhoods are being negatively affected on several levels,” Detroit’s mayor, Kwame Kilpatrick, said at the conference. “This issue is now the no. 1 economic challenge of many major American cities.” Despite the poor economic estimates for New York next year, the city has not suffered as many home foreclosures as other areas of the country. In fact, New York “actually performed … in terms of real estate values significantly better than the rest of the country in the bubble,” James Diffley, a managing director of Global Insight Regional Services, a research firm that wrote the report, said.

Housing prices in New York State have decreased 3.6% during the past year, compared with an average decline of 4.5% nationwide.

“The foreclosure situation and the subprime situation in New York City is far less than it is in the Midwest or in the California or Florida markets,” Mr. Diffley said. The reason New York will see a slowdown in economic activity, despite a relatively strong housing market, is the multiplier effect of tightening credit, Mr. Diffley explained.

The impact of the subprime liquidity crunch is having far-reaching effects across the country. Global Insight predicts a $166 billion decline in U.S. gross domestic product for next year, and expects there will be 524,000 fewer jobs created. The top 10 metro areas alone will absorb $45 billion of the losses, Global Insight said.

The report states that housing foreclosures alone will reduce American home values by an additional $519 billion in the year to come. This will bring the total loss to American homeowners to $1.2 trillion as a result of the subprime crisis.

The number of new residential construction projects will continue to decline through the second quarter of 2008, falling as much as 20% from the current level, the report says. Homes sales will drop too, perhaps by as much as 10%.

“We’ve all seen the headlines and read about how Wall Street is being impacted, but at the local level, mayors are on the front lines every day and our constituents are looking to us for solutions,” Mr. Kilpatrick said.

At the conference of mayors, participants proposed that the Mortgage Bankers Association of America create a free online database that would make it easier for local officials to find the parties responsible for maintaining foreclosed properties. Many such properties have entered a state of limbo, with no one stepping up to pay to keep them tidy.

Mayors also suggested that especially hard-hit cities provide financial counseling services to borrowers and organize advertising campaigns to inform the borrowers of them. Cities should educate young people about housing loans and outlaw predatory lending, the conference participants agreed, in order to prevent this kind of crisis from happening again.