Another Broken Myth: Foreclosures and Crime Rates

Remember when real estate foreclosures were decimating neighborhoods in Cleveland, eroding neighborhoods in Boston, creating ghost towns in Chicago?

No? Then maybe you remember the foreclosure-driven crime wave that hit Washington D.C.; Atlanta, Georgia; and Charlotte, North Carolina; prompting New York State ACORN President Pat Boone to explain, "It is common sense that foreclosure and crime go together."

Still drawing a blank? Then surely you recall how 2008 Democratic presidential candidates Barack Obama and Hillary Clinton both proposed a $30 billion fund to combat crime and blight in high-foreclosure areas. Republican candidate John McCain considered rising foreclosure rates so hazardous to civil order that he proposed having the Treasury Department buy up all the bad home loans in America.

Sen. Chris Dodd (D-Massachusetts Connecticut) spelled out the connection between foreclosure and crime with admirable specificity last year:

It isn't just the foreclosed property that causes the problem. There's the next door neighbor, the community that also suffers. For every one foreclosure in a square block, one-eighth square mile, there is a decline in value almost immediately of 1 percent of every other home in that square block. There's an increase of crime of 2 percent almost immediately in that area.

You don't recall any of this because none of it happened. If the foreclosure-driven crime trends that journalists and politicians have been predicting since 2006 had actually come to pass, our streets would by now be impassible wastelands where Toecutter and Bubba Zanetti prey upon the citizens with impunity.

Yet crime statistics continue to head downward throughout the country -- even or especially in those areas marked out as foreclosure clusters. Camden, New Jersey, supposedly America's most crime-ridden city, has seen a 14 percent crime reduction in 2009.

Prince William County, Virginia, which has the highest rate of foreclosures in Old Dominion, nevertheless saw its violent crime rate fall by 36.8 percent between 2008 and 2009. Foreclosure-plagued Oakland, California has seen a 3 percent annual drop.

Still, the perception that foreclosures are linked to the deterioration of law-abiding areas is not necessarily susceptible to statistics. Many intelligent people say they have a sense that crime is getting worse as more residences end up unoccupied. Again, my own experience contradicts this: I live in a not-so-nice part of Los Angeles County and spend plenty of time in less-nice areas (in California nothing ever goes below nice), yet I am absolutely certain I hear less gunfire and fewer police helicopters this year than I did in 2006.

So I try to keep up on an area-by-area basis with the great sub-prime crime wave. Today I spoke with Lance Eber, the statistics guy for the Merced, California police department. Merced is famously known as California's "ground zero" for foreclosures. If any place were to experience an increase in crime, this should be it. According to Eber, on a year-to-date basis, 2009 violent crime (including homicide, rape, robbery, assault, burglary and larceny) is 14 percent below its 2008 level. What about victimless offenses that you might expect to see goosed by the presence of unoccupied buildings, such as prostitution, drug use, and vagrancy? "Those are continuing problems," says Eber, "but we have not seen any increases in those."

Am I missing something? If you click on the Charlotte link above you'll see that with a sufficient amount of gnat-straining and to-be-sure-ing you can create the impression of a foreclosure-driven crime increase even with the statistics against you. Could I just be misreading the crime numbers from nationwide-foreclosure-leading Florida, for example? If anybody has evidence of a foreclosure/crime correlation in the current recession, I'm eager to see it.

Because in a way, I agree with the ACORN president. It does seem to be common sense that high foreclosures would lead to an increase in crime. It's just that there is no evidence to back up the common sense.

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  • Kyle Jordan||

    Good myth busting Cavanaugh. But you're no where near as hot as Kari doing it...

  • Gilbert Martin||

    Hmph - reminds of that creaky old liberal theory about poverty being the "root cause of crime".

    They could never prove that one either.

  • TP||

    Camden, New Jersey, supposedly America's most crime-ridden city, has seen a 14 percent crime reduction in 2009.

    That's a joke, right?

  • ¢||

    The foreclosure crimewave is all underage sodomy, interstate dildo shopping, and smoking less than fifteen feet from entrances. It may not show up in the numbers, but I can feel it when I fly.

  • Kroneborge||

    maybe they conser brown lawns to be a crime.

  • hmm||

    I think the concept is tied to the flight to the suburbs and the ghetto(in the lower economic class sense) moving into the areas of those fleeing. People just carried the theory over to foreclosures thinking the same would happen. I've seen economists make the same mistake. You can show a decent (not great) correlation between the flight out of the cities and an increase in crime as home values dropped and the lower economic classes shifted to fill the gap over a fairly long time frame. People confuse this shift with foreclosure, but the two shifts are totally different.

    You also have to remember some studies don't account for where the foreclosures take place. In normal times far more foreclosures take place in lower economic populations where crime is already present. So it's possible a foreclosure might exacerbate crime already present. (crack houses) This exacerbation won't occur unless crime is already present. A million dollar home, or even just a normal midwestern suburban home, being foreclosed on is going to exacerbate a crime rate of 0 or next to 0.

    It seems like the data make for an interesting set of curves and really interesting if you could prove some break points. But I haven't seen anyone go that far.

  • Boston||

    Sen. Chris Dodd (D-Massachusetts)

    ?

  • Tim Cavanaugh||

    Thanks. Fixed.

  • ||

    The real tragedy of foreclosure is that the wrong sort of people can afford to move into nice liberal neighborhoods.

  • TP||

    Shhhhhhhhhhhhhhhhhh!

  • ||

    prompting New York State ACORN President Pat Boone to explain, "It is common sense that foreclosure and crime go together."

    Ya know, when anybody from ACORN says "________ and crime go together", I get nervous.

    So I try to keep up on an area-by-area basis with the great sub-prime crime wave.

    You need to be checking lower Manhattan and metro DC.

  • ||

    When I can't pay off my loans, that just makes me want to rape.

  • AisA||

    FTW

  • ||

    Screw you, caption man, Blair Witch Project kicked ass. The first time you see it, at least.

  • Joe_D||

    Every time I hear people talk about how important it is to keep home prices artificially high, I want to shoot someone.

  • oncogenesis||

    Why no link to the Toecutter?

  • Tim Cavanaugh||

    Because everybody knows who Toecutter is!

  • jester||

    I understood that the foreclosed homes were rented out as porn-film sets. So they actually never really were vacant.

  • Spartacus||

    Because in a way, I agree with the ACORN president. It does seem to be common sense that high foreclosures would lead to an increase in crime. It's just that there is no evidence to back up the common sense.

    It's common sense that the sun orbits around the earth.

  • hmm||

    Found one of them online. I have two more in PDF that I can't find already hosted. If I can find the two others I have I will find a way to host or email to those who want them.
    The Impact of Single-family Mortgage Foreclosures on Neighborhood Crime

  • hmm||

  • robc||

    Even after controlling for all of these factors, the key variable of interest, foreclosure
    rate, remains a statistically significant determinant of violent crime. The results for
    property crime are not statistically significant. Because property crime figures are higher
    than violent crime figures, the variable is also not significant in the total crime regression.

  • hmm||

    I don't get the bold? Like I said, it's not the foreclosures correlating to crime. It's the use of past models correlating the increase in crime as economic classes migrate. People assume foreclosure and migration are the same thing.

    (the "Fucking internets owning me" is my inability to link)

  • hmm||

    There is another paper that does a better job and breaks it all down about as far as you can break it down. I can't find it online and not sure where I stored it.

  • robc||

    Tim asked for an article showing crime/foreclosure correlation. You provided an article. It showed no correlation, as the bold point shows.

  • robc||

    Seeing your above post, if that was your point (details in this one), then they should have been mentioned in the link post. I thought you were answering Tim's question and that research doesnt.

  • ||

    It's just common sense that if you have fewer people living in a given area because they moved out, the smaller number of people would commit more crimes.

    Common sense, that is, if you work for ACORN.

  • Morris||

    Something else that never happened: remember the Road to Serfdom? There are no Swedish serfs. Stick that up your fat libertarian ass, Cavanaugh.

  • hmm||

    There are Swedish meat balls and a Swedish swim team.

  • Nipplemancer||

    and Swedish Fish

  • anonymous||

    It's a process.

  • ||

    What part of Hollywood are you calling "not-so-nice?" Maybe around Western & Sunset, I suppose, but the vast majority of the neighborhood fits squarely in the nice category.

  • Tim Cavanaugh||

    Waring @ El Centro. A shithole. There have been efforts to rename the area Gower Valley or Waring Gulch or Upper Larchmont or whatever, but all have failed. My neighborhood is officially designated as a distressed area. (If you hire me, you will receive a tidy tax break for employing a resident of a targeted hiring zone!)

    In fact, I'd say everything east of Vine, and almost everything east of La Brea, falls into the not-as-nice category. (As noted, nothing in California ever really goes below the base level of nicetude.)

    The one effect of the downturn I have seen in my neighborhood is demographic. In three years it's changed from a no-English-at-all zone to a point where about a third of the units are populated by downwardly mobile Anglos. Which sets up the next crisis you'll read about in the L.A. Times: Gentrification is tearing apart East Hollywood.

  • ||

    I always thought that was Hancock Park, but I'll take your word for it. I'm at Franklin & Highland, so I'm east of La Brea, but no noticeable decline in the 'hood in the last few years.

  • Tim Cavanaugh||

    Definitely not Hancock Park, which — despite the best efforts of Realtors® with their Bullshit Realtor Designations® — nobody has been able to claim extends west of Rossmore. And at no point does Hancock Park go north of Melrose. It is true that if I walk directly south the quality of the neighborhood improves dramatically south of Melrose, but that area is called by either its old BRD®, which is "Windsor Square," or by its new BRD®, which is "Greater Larchmont" or "Upper Larchmont." (Although "Upper Larchmont" was really part of a separate effort to upscale the north-of-Melrose area where I live. That effort was failing about the time I moved in, and of course nobody talks about it anymore.)

    Easy shorthand: If you don't see families of Lubavitchers walking the sidewalks on the sabbath, you're not in Hancock Park. (A great historical irony, given that Hancock Park was originally carved out as a restricted zone.)

  • Rich||

    Appaently the foreclosees were the perps.

    It's just common sense.

  • ||

    I suspect the reason might be because only homeowners are free to be criminals. Landlords tend to watch and threaten tenants. I'm sure most criminals will ignore the angry old lady with the broom, but what matters is the margin.

    That, plus maybe crimes are less likely to be reported in the areas people move to when they lose their ill-gotten home?

  • ||

    fewer people = fewer criminals + fewer victims = fewer crimes. simple. Unless there these statistics are per capita...

  • Severin Sorensen||

    Economic misery (unemployment and loss of purchasing power) is connected to crime waves; foreclosures themselves are a symptom, not a cause of crime waves, and therefore it should be no surprise there is no causation.

    Studies show that there is a strong positive association between crime and unemployment at the individual level, a clear positive association at the cross-sectional level that gets weaker as the level of geographical aggregation increases, but quite an inconsistent relationship over time (or time series data).

    The facts are that since 1954, every sharp economic contraction has been followed by a crime wave, typically within one-year. The depth and severity of the crime wave is determined by the duration and depth of the recession.

    If you want a detailed review of the literature, check out my book, Severin L. Sorensen, CPP, "Economic Misery and Crime Waves" (2009) available at Amazon.com.

  • Tim Starr||

    Those most likely to get foreclosed-on are also most likely to commit crimes, so I would expect to see a correlation between the two, but neither one would cause the other, and foreclosures would have the effect of correcting the problem over time.

  • Kevin Simpson||

    You are a mythbuster! In fact, there's a possibility of crime in foreclosed homes due to vandalism or occupation of homes... But this is not directly linked to the rates

  • melissa||

    if you are experiencing a hard time for the foreclosures and VA loan, you can always come to this site:
    FORCLOSURES. you can have your inquiries and other questions. just visit their site.

  • Toua||

    I came across this while looking for information on Foreclosure and Crimes. I am actually doing a little study on whether or not there is any corelationship (not coeffect) of the two, possibly with vandalism and foreclosures. So far from what I have found, there has been a decline in crime. This can be due to many things though, for example, the case may be that criminals find it easier to burglarize or steal from foreclosed homes as nobody will report them (thus throwing the actual crime statistics off). I know that a lot of homeless people and/or squatters have been moving into and living (for months at a time) in foreclosed properties. Whether this has anything to do with the crime rate would be interesting to look at.

    So far what I have been finding at least for the Merced area is a decline in crime (note that homicide went up 50% where many other major crimes dropped dramatically).

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