The contagion effect of foreclosed properties

Harding, John P.; Rosenblatt, Eric; Yao, Vincent

doi:10.1016/j.jue.2009.07.003

Cited by 384 publications

(278 citation statements)

References 14 publications

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“…It also implies that more less-advantaged neighborhoods will exceed the thresholds at which foreclosures start to create more crime nearby (Ellen, Lacoe, and Sharygin 2011). This lends further testimony to the mounting evidence concenring the unfairly distributed toll imposed by the United States' latest dalliance with weakly regulated financial markets (Immergluck and Smith 2006a, b;Kingsley, Price and Smith 2009;Harding, Rosenblatt and Yao 2009;Cui 2010;Goodstein and Lee 2010;Katz, Wallace and Hedburg 2011).…”

Section: Discussionmentioning

confidence: 87%

“…In some weak-market cases, vacant properties may be stripped of their resalable components, yielding a structure so badly damaged that there is no financially feasible recourse but to abandon it (Galster, Cutsinger and Malega, 2008). More foreclosed properties, in turn, will likely increase the number of crimes nearby (Ellen, Lacoe, and Sharygin 2011;Immergluck and Smith 2006b;Harding, Rosenblatt and Yao 2009;Cui 2010;Goodstein and Lee 2010;Katz, Wallace and Hedburg 2011). Falling disposable incomes of individual households coupled with falling population densities may lead to the closing and/or moving "downmarket" of the local retail sector serving the effected neighborhood.…”

Section: The Urban Geography Of Disparate Impacts: a Conceptual Framementioning

confidence: 99%

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The Disparate Neighborhood Impacts of the Great Recession: Evidence from Chicago

2013

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We advance scholarship about how macroeconomic forces differentially manifest themselves across local spaces by developing a holistic conceptual framework and empirical analyses involving multilevel change modeling. Unlike prior work, we examine differential rates of change in neighborhood indicators. We illustrate our approach with Chicago data measuring the crime, housing, and economic domains of neighborhood qualityof-life over the 2000-2009 period. We find that the local dynamic manifestations of macroeconomic cycles were far more nuanced than have been previously observed. Neighborhood indicators moved along distinct trajectories, sometimes but not necessarily tracking each other or the overall business cycle, and they changed with varied intensities. The Great Recession of 2006-2009 had disparate negative impacts on lower-income and minority-occupied neighborhoods' local job opportunities, home prices, and home foreclosures, though this was not true for credit or crime indicators. Credit indicators performed geographically much differently than in the prior Chicago recession.

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Section: Discussionmentioning

confidence: 87%

Section: The Urban Geography Of Disparate Impacts: a Conceptual Framementioning

confidence: 99%

The Disparate Neighborhood Impacts of the Great Recession: Evidence from Chicago

2013

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“…Most notably, a growing number of papers study the impact of foreclosures on neighboring home values (Immergluck and Smith, 2006a;Schuetz, Been, and Ellen, 2008;Harding, Rosenblatt, and Yao, 2009;Haughwout, Mayer, and Tracy, 2009;Lin, Rosenblatt, and Yao, 2009;Rogers and Winter, 2009;Hartley, 2010;Wassmer, 2010;Campbell, Giglio and Pathak;Gerardi, Rosenblatt, Willen, and Yao, 2012). The papers vary in their methods but several use statistical techniques to demonstrate that foreclosures actually lead to reductions in with such reductions.…”

Section: The Impact Of Foreclosures On Other Community Outcomesmentioning

confidence: 99%

Do foreclosures cause crime?

Ellen

Lacoe

Sharygin

2013

Journal of Urban Economics

198

153

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The mortgage foreclosure crisis has generated increasing concerns about the effects of foreclosed properties on their surrounding neighborhoods, and on criminal activity in particular. There are a number of potential ways in which a foreclosed property might increase the payoffs to committing crime and decrease the likelihood of being caught, including reduced maintenance, residential turnover, and vacancy. Using point-specific, longitudinal crime, foreclosure, and other property data from New York City, this paper determines whether foreclosed properties affect criminal activity on the surrounding blockface -an individual street segment including properties on both sides of the street. We find that additional foreclosures on a blockface lead to additional total crimes, violent crimes and public order crimes. These effects appear to be largest when foreclosure activity is measured by the number of foreclosed properties that are on their way to an auction or have reverted to bank ownership. We find that effects are largest in neighborhoods with moderate or high levels of crime, and on blockfaces with concentrated foreclosure activity.

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“…As illustration, Immergluck and Smith (2006a) found in Chicago that every additional foreclosure within an eighth of a mile reduced a home's value by 0.9%; in low-and moderate-income neighborhoods the marginal impact was twice as large: 1.8%. Harding, Rosenblatt and Yao (2009) analyzed patterns in 13 states and 7 metro areas and estimated a 1.0% negative impact on housing sales prices resulting from each additional foreclosure within 300 feet, and roughly half that amount for foreclosures within 300-500 feet. If these estimates are even approximately correct, they imply that American neighborhoods have lost hundreds of billions of dollars in home equity purely from the negative externalities associated with home foreclosures over the last several years (Kingsley, Smith and Price 2009).…”

Section: Introductionmentioning

confidence: 99%

Home Foreclosures and Neighborhood Crime Dynamics

2013

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We advance scholarship related to home foreclosures and neighborhood crime by employing Granger causality tests and multilevel growth modeling with annual data from Chicago neighborhoods over the 1998-2009 period. We find that completed foreclosures temporally lead property crime and not vice versa. More completed foreclosures during a year both increase the level of property crime and slow its decline subsequently. This relationship is strongest in higher-income, predominantly renter-occupied neighborhoods, contrary to the conventional wisdom. We did not find unambiguous, unidirectional causation in the case of violent crime and when filed foreclosures were analyzed.

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The contagion effect of foreclosed properties

Cited by 384 publications

References 14 publications

The Disparate Neighborhood Impacts of the Great Recession: Evidence from Chicago

The Disparate Neighborhood Impacts of the Great Recession: Evidence from Chicago

Do foreclosures cause crime?

Home Foreclosures and Neighborhood Crime Dynamics

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