The Impact of Foreclosures on Neighborhood Disorder Before and During the Housing Crisis: Testing the Spiral of Decay

Objectives: The objectives of this study were to examine whether an increasing number of foreclosures in a neighborhood subsequently increase disorder and whether the temporal relationship between foreclosures and disorder is different before and during the housing crisis. Methods: We employ longitudinal data to examine the impact of foreclosure on crime in Glendale, Arizona, a city at the epicenter of the nation's foreclosure problem. We rely on three data sources: (1) foreclosure data, (2) Computer-Aided Dispatch/Police Records Management System data, and (3) U.S. Census and census estimate data. Results: Our findings suggest that foreclosures do have a short-term, four-month effect on overall disorder and social disorder; however, that relationship only holds during the months preceding the housing crisis. During the housing crisis, there is no effect of foreclosures on disorder. Conclusions: Our results suggest that instead of the long-standing negative impact that foreclosures have on disorder in communities, their negative effect is short lived and limited. Thus, foreclosures during the housing crisis do not signal disorder and decay as expected. A number of communities across the country have enacted prevention, enforcement, and reuse policies and programs aimed at foreclosure for the purpose of reducing disorder and subsequent crime; our results suggest that some of these policies and programs require substantial resources and might not have their desired impact.