How is the subprime mortgage crisis affecting neighborhoods?
Subprime loans tend to be geographically concentrated, often in low-poverty, minority neighborhoods rather than in the poorest and most distressed areas. These are places where African-Americans and Hispanics were becoming homeowners, establishing strong, healthy neighborhoods, and beginning to accumulate real wealth. We’re seeing large clusters of subprime loans in central-city neighborhoods and close-in, minority suburbs. But we’re also seeing them in far-out suburban neighborhoods where young families decided to put up with long commutes to get the biggest house they could afford. In clusters like these, the ripple effects that start when homes begin to foreclose can be devastating. Foreclosures and distressed sales drag down property values in the surrounding area. Whole neighborhoods can experience a downturn. When properties are left vacant by foreclosures, that can have a larger blighting effect on the neighborhood, inviting crime and vandalism. We’re beginning to see research o
