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Foreclosures and local government budgets

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  • Ihlanfeldt, Keith
  • Mayock, Tom

Abstract

Foreclosures have been shown to have a negative financial impact on borrowers, lenders, and neighbors. It has also been argued that they have important negative effects on the budgets of local governments, but the only econometric evidence on this is provided by Alm, Buschman and Sjoquist (2014) foreclosures in this journal. They limit their analysis to the revenue side of the budget and find important effects. As a complement to their work, we argue and demonstrate using a unique 15-year panel of Florida counties that foreclosures also have important effects on local governments' expenditures.

Suggested Citation

  • Ihlanfeldt, Keith & Mayock, Tom, 2015. "Foreclosures and local government budgets," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 135-147.
  • Handle: RePEc:eee:regeco:v:53:y:2015:i:c:p:135-147
    DOI: 10.1016/j.regsciurbeco.2015.05.007
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    References listed on IDEAS

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    1. Daniel J. Wilson, 2012. "Fiscal Spending Jobs Multipliers: Evidence from the 2009 American Recovery and Reinvestment Act," American Economic Journal: Economic Policy, American Economic Association, vol. 4(3), pages 251-282, August.
    2. Alm, James & Buschman, Robert D. & Sjoquist, David L., 2014. "Foreclosures and local government revenues from the property tax: The case of Georgia school districts," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 1-11.
    3. W. Scott Frame, 2010. "Estimating the effect of mortgage foreclosures on nearby property values: a critical review of the literature," Economic Review, Federal Reserve Bank of Atlanta.
    4. Kristopher S. Gerardi & Eric Rosenblatt & Paul S. Willen & Vincent W. Yao, 2012. "Foreclosure externalities: some new evidence," Public Policy Discussion Paper 12-5, Federal Reserve Bank of Boston.
    5. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, January.
    6. Ihlanfeldt, Keith R. & Willardsen, Kevin, 2014. "The millage rate offset and property tax revenue stability," Regional Science and Urban Economics, Elsevier, vol. 46(C), pages 167-176.
    7. John Y. Campbell & Stefano Giglio & Parag Pathak, 2011. "Forced Sales and House Prices," American Economic Review, American Economic Association, vol. 101(5), pages 2108-2131, August.
    8. Skidmore, Mark & Scorsone, Eric, 2011. "Causes and consequences of fiscal stress in Michigan cities," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 360-371, July.
    9. Ross, Justin M. & Yan, Wenli, 2013. "Fiscal Illusion From Property Reassessment? An Empirical Test of the Residual View," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(1), pages 7-32, March.
    10. David M. Drukker, 2003. "Testing for serial correlation in linear panel-data models," Stata Journal, StataCorp LP, vol. 3(2), pages 168-177, June.
    11. Matteo Iacoviello, 2011. "Housing wealth and consumption," International Finance Discussion Papers 1027, Board of Governors of the Federal Reserve System (U.S.).
    12. Alicia H. Munnell & Jean-Pierre Aubry & Josh Hurwitz & Mark Cafarelli, 2013. "Gauging the Burden of Public Pensions on Cities," Issues in Brief ibslp35, Center for Retirement Research.
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    Cited by:

    1. Solé-Ollé, Albert & Viladecans-Marsal, Elisabet, 2017. "Housing booms and busts and local fiscal policy," ZEW Discussion Papers 17-001, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    2. repec:pos:journl:31-1 is not listed on IDEAS
    3. repec:eee:regeco:v:68:y:2018:i:c:p:277-290 is not listed on IDEAS
    4. James Alm & J. Sebastian Leguizamon, 2018. "The Housing Crisis, Foreclosures, and Local Tax Revenues," Working Papers 1803, Tulane University, Department of Economics.

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    Keywords

    Local government budgets; Foreclosures;

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