California’s Dependence in Capital Imports for Mortgage Investment

by Leo Grebler



This article presents, for the first time, estimates of California's dependence on out-of-state funds for a highly significant type of investment, that is, investment in mortgages, so crucial to the state's progress in the provision of housing and other real estate facilities. The article identifies also the transmission belts" through which out!of!state funds have been supplied for mortgage investment in the state, and it discusses some implications of the statistical findings. Lest the reader's patience be taxed unduly, let it be said at the outset that the estimates of the proportion of total mortgage investment financed by out-of-state funds indicate major dependence on such funds to an extent not generally realized to date. This is indeed a matter of vital importance both to an understanding of the California mortgage market and to the future growth of the state. One of the reasons why the share of out-of state funds in the financing of capital formation in California has never been adequately determined is the proclivity of analysts to' look for data on the flow of funds.

California Management Review

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