Residential Foreclosures in the City of Buffalo, 1990-2000 - Federal ...

neighborhoods is cause for concern. On the one hand, they are likely to provide some of
the region’s best homeownership opportunities for low- and moderate-income minorities.
On the other hand, the spatial concentration of foreclosures in these neighborhoods is
likely to result in socioeconomic decline.
Increasing the rate of homeownership continues to be a noteworthy policy
objective. Unfortunately, the ultimate outcome of a home loan may be a foreclosed
property. The recent rise in foreclosures in the city of Buffalo may in part reflect the risks
associated with homeownership—particularly as an investment in a declining market—
and the difficulties faced by financial institutions and the government in providing
housing and financial products suitable for low-income homeownership in urban
neighborhoods. To date, few studies weighed the benefits of raising homeownership rates
in central cities against the costs of foreclosures. Quite often, homeownership and
foreclosure rates are observed in aggregate, and the policy effect is not evaluated at the
local level. Yet, needless to say, a residential foreclosure is more than an economic
statistic; it is also a home located in a neighborhood. If that neighborhood is urban, the
foreclosed home is more likely to fall into disrepair, become vacant, and be demolished.
This simple truth calls for a harder look at the relationship between homeownership and
foreclosure. By providing a thorough examination of the characteristics of foreclosures,
this study takes a step in that direction.
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