March 7, 2011
How will the foreclosure crisis affect low-income urban children?
Over the past few years, banks have foreclosed on thousands of properties in cities across the United States. Many of these foreclosures involve multi-unit properties often occupied by low-income families. In 2009, 57% of the foreclosure filings in New York City and 28% of the filings in Chicago were for multi-unit properties. In many cities, the foreclosed rental properties tend to cluster in low-income, predominantly black neighborhoods. Recent studies by the Urban Institute and by the Furman Center for Real Estate and Urban Policy suggest that the foreclosure crisis, especially for rental properties, is likely to disproportionately affect children.
One of the most important ways that the foreclosure crisis may affect children is through increased rates of school mobility. Changing residence often implies changing schools, and when students move to a new school, they are forced to adjust to new teachers and to develop new friendships. The Furman study examined the impact of residential mobility on academic development, finding that students who moved to a new school often lost access to their existing friendship network. Another study by education professor Russell Rumberger, linked high school dropout rates to school mobility, finding that students who moved frequently had a 50% greater probability of not graduating.
School administrators and local officials are beginning to recognize the value of reducing school mobility, and have started developing solutions. In Flint, Michigan, where one school in the district recently experienced a 75% turnover of its students in a single year, school and state administrators decided to take action. In 2008, the state’s Department of Human Services (DHS) began a pilot program in which landlords were paid rent on behalf of families, with the goal of minimizing mobility by stabilizing housing. Initial reports from DHS suggest that the program increased student achievement among participants. Students in the program attended school during 96% of instructional time, compared to 89% in a control group. In addition, 75% of the students in the program tested at grade level, compared to 35% in the control group. Researchers have also found that the trauma of foreclosure-related reasons could have long-term effects on a child’s well-being and complicate his or her transition to a new school.
Public policies and the children affected by foreclosure
The foreclosure crisis in the United States has affected cities severely—the New York Times recently reported that, with declining property tax bases, many city governments are struggling to provide services to their residents. Scholars differ on how limited resources should be allocated. Bowdler and her colleagues emphasize stabilizing foreclosures and rebuilding affordable rental housing to minimize the financial devastation among families. In a similar vein, Mark Swartz and Rachel Blake of the Lawyers’ Committee for Better Housing suggest that maintaining affordable rental units should be a priority, arguing that the crisis will worsen the shortage of affordable housing. Education professors Danne Davis and Minsun Shin argue that more resources should be targeted specifically toward children, particularly to prevent academic losses. In any scenario, it seems likely that no population will experience a greater burden than low-income children.