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Measuring Ripple Effects
of Foreclosure
Kathy Pettit, The Urban InstituteCommunity Indicators Consortium
ConferenceOctober 2, 2009
2
National NeighborhoodIndicators Partnership
(NNIP)
Collaborative effort since 1995 Urban Institute and local partners in 32 U.S. cities
Partners operate information systems Recurrently updated neighborhood-level data Multiple topics and data sources
Trusted institutions Mostly outside of government Rely on collaboration with other sectors and residents
Shared mission: Democratizing information
The Impacts of Foreclosures on Families and Communities: A Primer
July 2009
G. Thomas Kingsley, Robin E. Smith, David Price
http://www.urban.org
Impacts on Families
Displacement and Homelessness
Family Finances: Credit Repair
Family Finances: Wealth Loss
Adult Physical and Mental Health
Family Dissolution
Ability to recover will vary for different families
Impacts on Vulnerable Groups Elderly
Fixed income; limited time to re-grow wealth More difficulty adjusting to change Challenge of finding accessible & affordable home
Renters May face eviction with little notice Loss of security deposit & new moving expenses Unaware of federal/local protections
Children Instability & family stress affects development Changing schools mid-year affects academics
Impacts on Neighborhoods
Disruption of community’s social fabric
Increased vacant/abandoned buildings
Increased crime and disorder
Property value decline and contagion effects
New burdens on local governments
Impacts on Families
Identifying Elderly At Risk of Losing Homes
2,214(18%)
4,646(33%)
12,494
Analysis by Pittsburgh Neighborhood and Community Information System
12,494 people named as defendants in foreclosure proceedings between 2006 and Nov. 2007
4,646 matches with Allegheny County Department of Human Service clients
2,214 of customers actively accessing resources
903 elderly identified (599 as active Area Agency on Aging consumers and 305 from voter records)
599(5%)
305(2%) +
Half of D.C.’s foreclosed homes and distressed sales were renter-occupied.
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003
2004
2005
2006
2007
2008
2009E
stim
ated
Num
ber
of H
ouse
hold
s Li
ving
in R
enta
l Pro
pert
ies
in th
e F
orec
losu
re In
vent
ory
Apartments: 5+ Units (Upper-Bound)
Apartments: 5+ Units (Lower-Bound)
Apartments: Less than 5 Units
Single-Family Homes and Condominiums
Children and Foreclosures
Baltimore, New York City, Washington, D.C. Sponsored by Foundation for Open Society Phase 1: Point-in-time
How Many? Who (race, tenure, ELL)? What Neighborhoods? What Schools?
Phase 2: Post-foreclosure Where do the families go? How does it affect their academics
(absenteeism, test scores, drop-out rates)
1,400 D.C. students lived in a home in foreclosure, concentrated in a few areas. Public Students in Parcels Public Students in Parcels with Foreclosure Notice, SY 2008-2009with Foreclosure Notice, SY 2008-2009
H Street /Kingman Park
Deanwood /Lincoln Heights
Trinidad
Brightwood /16th Street Heights /
Petworth
Location of Students' Residences, 2008-2009 School Year
Number of Public Students in Parcel1
5
10
Ward Boundaries
1 to 4 students5 to 9 students10 or more students
H Street /Kingman Park
Deanwood /Lincoln Heights
Trinidad
Brightwood /16th Street Heights /
Petworth
Location of Students' Residences, 2008-2009 School Year
Number of Public Students in Parcel1
5
10
Ward Boundaries
1 to 4 students5 to 9 students10 or more students
Public Students in Parcels Public Students in Parcels with Foreclosure Notice, SY 2008-2009with Foreclosure Notice, SY 2008-2009
Impactson Neighborhoods
Source: University of MemphisCenter for Community Building and Neighborhood Action (CBANA)
Foreclosure, Vacancy, & Abandonment
$4,000-$5,999 17%(499)
$6,000-$7,99917%(495)
$8,000-$10,000 21%(620)
$1-$999 9%
(262)
$1000-$1,999 15%(435)
$2,000-$3,999 21%(630)
N=2,941
Source: Cuyahoga County Auditor transfer data from NEO CANDO, Center on Urban Poverty and Community Development, Mandel School of Applied Social Sciences, Case Western Reserve University.http://neocado.case.edu
Prices of Distressed Properties Leaving REO, 2005-08
Source: NEO CANDO, Case Western University N=2,941
Top Sellers of REO Properties, Cuyahoga County, 2007-2008
Seller
Number of REO
properties sold,
$10,000 or less
Percent of total REO properties
sold
REO properties sold by seller, all
prices
Percent of REO
properties sold for
$10,000 or less by seller
Deutsche Bank National Trust 486 18.59% 1089 44.63%
Wells Fargo 304 11.63% 771 39.43%
Fannie Mae 239 9.14% 982 24.34%
U.S. Bank National Association 194 7.42% 519 37.38%
LaSalle Bank National Association 162 6.20% 322 50.31%
Bank of New York 112 4.28% 404 27.72%
JP Morgan Chase Bank 103 3.94% 298 34.56%
HSBC Bank 75 2.87% 163 46.01%
Homecoming Financial Network 73 2.79% 173 42.20%
Wachovia Bank 56 2.14% 150 37.33%
Total (top sellers) 1804 69.00% 4871 62.46%
Total REO properties sold 2614 7799
Source: Cuyahoga County Auditor transfer data from NEO CANDO, Center on Urban Poverty and Community Development, Mandel School of Applied Social Sciences, Case Western Reserve University.
http://neocando.case.edu
Judge Raymond Pianka orders Wells Fargo Bank to bring foreclosed properties up to code in Cleveland
Implications for policy and practice
Need to pair stories with indicators to highlight people and neighborhoods hurt by post-foreclosure fallout
Requires new partnerships to measure and to respond to continuing effects of foreclosures Schools / Prevention counselors Prevention counselors /social service networks Police /code enforcement
Resources
http://www.foreclosure-response.org
NNIP Foreclosures – cross-site and local
http://www2.urban.org/nnip/foreclosures.html
Kathy Pettit: [email protected]