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Do foreclosures cause crime?

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Listed:
  • Ellen, Ingrid Gould
  • Lacoe, Johanna
  • Sharygin, Claudia Ayanna

Abstract

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.

Suggested Citation

  • Ellen, Ingrid Gould & Lacoe, Johanna & Sharygin, Claudia Ayanna, 2013. "Do foreclosures cause crime?," Journal of Urban Economics, Elsevier, vol. 74(C), pages 59-70.
  • Handle: RePEc:eee:juecon:v:74:y:2013:i:c:p:59-70
    DOI: 10.1016/j.jue.2012.09.003
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    References listed on IDEAS

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    Keywords

    Crime; Mortgage foreclosure;

    JEL classification:

    • R - Urban, Rural, Regional, Real Estate, and Transportation Economics

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