The foreclosures that swept the country during the latest
recession have had a devastating impact on many families. However, the negative effects of this crisis
didn’t stop there—communities were also greatly impacted by foreclosure rates. Although surprisingly few studies have been
completed on the topic, there is evidence supporting the fact that foreclosures
have a deep and lasting negative impact on communities, as well. Here is what the research found:
- An increase in theft—when homes are abandoned and banks fail to resell them in a timely fashion, it creates the perfect situation for thieves to take advantage. Everything from the copper wiring to the appliances within a home (such as air conditioners, water heaters, refrigerators, stoves, and toilets) becomes up for grabs when there isn’t a watchful eye on the property.
- An increase in vandalism and vagrancy—foreclosed homes are primary targets for vandals and vagrants, resulting in additional costs needed to restore or repair the home for potential homeowners.
- Local governments suffer—when there are multiple homes in a particular ward that are foreclosures, property values lower and there is a smaller tax base to support the local government. According to the Center for Responsible Lending, “Over 44 million homes in the United States will experience property devaluation as a result of foreclosures in their neighborhoods. Forty-two counties in the United States can expect to see their property tax base erode by more than $1 billion.”
- Youth experience stress—according to the Center for Responsible Lending, “it is estimated that over 1.95 million youth are affected by foreclosure.” Not only do foreclosures directly affect the stress level and stability of the children who lose their home, they also directly affect the children left in the neighborhood who experience their neighborhood’s value decreasing. A smaller tax base affects everything from neighborhood school budgets to playground maintenance and safety.
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