Social Impacts of Foreclosure
Foreclosures in Wisconsin:
Responses and Resources for
Living Beyond the Bubble
November 5, 2009
Robin Smith
The Urban Institute
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Social Impacts of Foreclosure
This presentation
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Impacts on families
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Impacts on neighborhoods
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Challenges and priorities
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Impacts on families
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Displacement
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Housing Instability
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Financial Insecurity and Economic
Hardship
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Personal and Family Stress
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Displacement
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Where Do Households Move?
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No systematic information
Homeless system survey
Reduction in Housing Quality
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Decline in household resources
Rental housing more expensive than
comparable owned housing
Quick decisions often mean poor choices
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Housing Instability
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First Step on Unstable Housing Path
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Patterns for low-income households
Homelessness
Hard Hit Groups
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The very old
The very young
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Financial Insecurity
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Homeowners
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Devastating loss of wealth
Credit ratings shattered
One estimate, takes 10 years to recover
Renters
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Lose security and other deposits
Incur costs of housing search and moving
Move may lead to less-affordable situations
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Financial Hardship
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Financial implications gloomy but do not evoke
economic hardship for all families
Selected Hardship Measures
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Food Stamps
Social service caseloads
Personal bankruptcy
Hardship for Older Americans
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Particularly hard hit
Limited amount of time to overcome setback
Rely on housing investment to fund retirement years
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Personal and Family Stress
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Disrupted Relationships
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Family turbulence
Exacerbates negative behaviors such as child
abuse and addiction
Marital problems and domestic violence
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Mental Health
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Physical Health
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Impacts on Neighborhoods
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Social breakdown in neighborhoods
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Household turnover
Physical deterioration
Decline in property values
Increase in crime
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Challenges and priorities
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Addressing the crisis overall—need policies to:
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Prevent foreclosures of current mortgages
Help displaced families recover
Prevent similar crisis in future
What do we need to know?
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Very little documentation let alone formal evaluation
Where are families? What do they need? What works?
Recognize the many social consequences
Identify especially vulnerable populations
Acknowledge applicability of existing strategies
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