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: kpettit@urban.org