Sunday, February 7, 2010

Foreclosures and ghost suburbs

Foreclosures lead to crime?

Lately I have been corresponding with Brent Teasdale, from Georgia State University and his research partner Lynn Clark from the University of Akron. They are scholars looking at the financial crash and its impact on neighborhood crime, especially the home foreclosures.

They are among the first to study this in detail. From what I can see they are among the most thoughtful. In a forthcoming article Brent and Lynn ask:

How do we create sustainable neighborhoods in the midst of the urban (and, by 2009, suburban) foreclosure crisis, where old neighborhoods that were viable are now decimated with boarded up homes, where residents are faced with declining property values, vacant lots, fewer long term residents, and an increasing presence of absentee investors or landlords?

Great question! Here's another: What if the recovery stalls, or worsens? That’s what Severin Sorensen suggests in his new book Economic Misery and Crime Waves.

What happens then? Is there evidence one way or another? Thanks to Brent and Lynn, there is!

They talk about "ghost subdivisions", places where the new economy creates unsold and unoccupied tracts of new housing.

Ghost subdivisions are new housing developments that have not been sold or occupied by residents. In such places CPTED is crucial.

For example, in Atlanta legal changes were required for the issuance of occupancy permits to new homes. Certificate of occupancy permits were not issued prior to appliances being placed in new residences. When appliances were installed prior to actual occupancy, the permit signified to potential criminals the presence of the appliances in homes that did not have guardianship. This led to residential burglaries in new developments and the theft of these appliances.

Brent and Lynn also examine what happens when neighborhood foreclosures crosses what in SafeGrowth we call the neighborhood threshold, also known as the tipping point?

When a home goes into foreclosure, especially if it is vacant, home values can decline. This can lead to poor upkeep and decreased informal social control, in CPTED terms diminished territorial reinforcement. Because of a high potential for the buyer to be an absentee property investor or landlord, there is increased risk of criminal activity as the area suffers visible signs of physical decay.

They tell us why mom and pop corner stores, so important in neighborhood life, cannot survive the new economy:

Triggering the demise of mom and pop stores

Economic competition from big box stores (where residents drive to shop) means that smaller stores must have lower prices. But lower prices in a smaller consumer base (usually within walking distance of those smaller stores) results in a reduced profit margin.

This is especially a problem when residents find their housing values declining due to foreclosures, general aging of the housing stock, increased tax burden for schools and services, or a slowing of the urban/suburban economy. In these circumstances the success of a sustainable and safe neighborhood is put at risk.

Brent and Lynn’s full article will appear in the March issue of CPTED Perspective, the International CPTED Association newsletter.

3 Replies so far - Add your comment

Severin Sorensen, CPP said...

Gregory, salient post. In addition to vacancies creating additional crime opportunities, is the vandalism done to the vacant housing units themselves that further deteriorate neighborhoods and create blight. Within my book that you referenced, Economic Misery and Crime Waves, [Thanks], I outlined how a home in Atlanta valued at $320,000 went into foreclosure when the homeowners stopped paying the payments, as the underlying housing prices meant the property was underwater. Subsequently, the family was evicted, and the vacant housing unit was vandalized, stripping all copper piping, copper wire, appliances, etc., leaving only torn up sheet rock and flooring in the unit. The physical structure, merely a shell of where a home once stood is now for sale for less than $30,000. Surely this is a modern tragedy with many victims that is being repeated over and over again in this difficult economy.

Severin Sorensen
Sikyur LLC

GSaville said...

Severin, that is a fascinating, and tragic, story. It makes me wonder: the neighborhood is now in disarray, so the community lost; the bank gained virtually nothing back from their loss, so they lost; and the owners have lost their home, so they lost. Can mortgage companies and banks actually still delude themselves into believing the credit and mortgage system works for anyone?

The question now is this: If you are right (and your well-researched book convincingly suggests you are) that this is a modern tragedy with many victims that is being repeated over and over again in this difficult economy...then HOW many victims and HOW many times will it be repeated until someone wakes up?

Or until major portions of our entire residential fabric is lost beyond hope?

Betz said...

Walking the area makes sense, but not without a walk or short drive at night, say 9pm or later. Responsible families DO NOT have school age children (middle or high school) aimlessly wandering about in groups. It might not be the worst idea to approach such a group and ask for dirctions just to observe if they are rude or courteous, welcoming or fearful.