The Social Impact of Home Rehabilitation in Low-Income Neighborhoods The Social Impact of Home Rehabilitation in Low-Income Neighborhoods

By Erin Michelle Graves and Elizabeth Shuey

While economists and others have studied the impact of abandoned foreclosed homes on nearby home prices and crime, very few scholars have attempted to understand the impact of abandonment and rehabilitation on neighborhood social conditions. The foreclosure crisis of 2005-2010 led to a concentration of abandoned foreclosed homes in disadvantaged neighborhoods and these neighborhoods became the targets of a policy intervention, the Neighborhood Stabilization Program. This study employs a mixed-method longitudinal approach to investigate the impact of this foreclosed home rehabilitation policy on neighborhood social conditions and physical conditions in a highly disadvantaged neighborhood. We compared this to a quasi-control group of similar abandoned, foreclosed neighborhood homes not selected for the program. Results indicated that the rehabilitation of a foreclosed home had marginally significant negative impact on social conditions and no impact on the physical conditions of nearby homes. There were no differences between the program properties and the control properties, except that the control properties were rehabilitated more quickly. To further explore the quantitative findings, we divide the qualitative results into four major themes emerging from the data: indifference to foreclosures, threats to the neighborhood, call for community cohesion, and the importance of homeownership. These results indicate that the affected residents believe that neighborhood stabilization efforts would have benefitted more from programs that aimed to improve homeownership opportunities and increase neighborhood levels of social cohesion and social capital.