Imagine what the public reaction would be if a tsunami destroyed over 2,000 homes in one area, leaving 2,000 families without shelter or assets. North Minneapolis is now experiencing such a tidal wave of foreclosures, and while the houses may still be standing, the devastation families experience through foreclosure is on the scale of that experienced in a massive natural disaster. Northside neighborhoods and residents are concerned about the negative impacts on individuals, families and communities. Individuals and families lose their homes, their credit ratings and potentially face interruptions in work and education. They are often forced to leave communities in which they had developed and invested social capital in the form of relationships and trust. Neighborhoods also lose social capital and remaining residents face the loss of home values, potential increases in crime and loss of jobs. Responding to this situation requires a comprehensive approach in order to address both the individual and community levels. The response must include prevention of foreclosures as well as assistance to families and communities dealing with the aftermath of foreclosure. Our research shows that many of the fraudulent practices which led to the current crisis are being addressed by legislation and law enforcement. We do believe that additional legislation can help reduce widespread fraud from recurring when the recent inflated market conditions return. We find no connection between murder and crime rates and the foreclosure crisis. While foreclosure may lead to vacancies and provide opportunities for vandalism, crime has been dropping in North Minneapolis. The high murder rates of previous years occurred when there was no foreclosure crisis. We find that foreclosure not only forces individual households, both homeowners and tenants, out of their homes but also has the effect of reducing the overall level of home ownership in a neighborhood. This research documents how foreclosures are accelerating the pace of conversion from owner-occupied to investor-owned properties in North Minneapolis. While many foreclosed properties are already owned by investors, the percentage of these properties is increasing rapidly as mortgage companies repossess homes and are unable to quickly resell them to new homeowners.
Conducted on behalf of the Northway Community Trust. Supported by Neighborhood Planning for Community Revitalization (NPCR), a program of the Center for Urban and Regional Affairs (CURA), University of Minnesota.
Preserving Homeownership in North Minneapolis: Responding to the Impact of Foreclosures.
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