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

Executive Summary
The U.S. residential housing market has experienced a rising foreclosure rate since 1980,
despite the nation’s unprecedented economic growth over the past two decades. In the
context of this rising trend, the city of Buffalo experienced a dramatic rise in residential
foreclosures between 1990 and 2000. In 2000, there were nearly 800 foreclosures,
representing a nearly fourfold increase from a decade earlier.
The forces contributing to the national rise in foreclosures may be having a
disparate impact on central cities, particularly those in slow-growth areas such as upstate
New York. Although foreclosure actions were up throughout the Buffalo-Niagara metro
area, they were about twice as likely to occur in the city than in the suburbs. However,
this finding should come as no surprise. In cities like Buffalo, homeownership typically
entails a match between a region’s lowest income borrowers and its most precarious real
estate markets. Such circumstances raise concerns over the added risk of financial harm
to vulnerable segments of the population, but even more troubling is the threat to the
often struggling neighborhoods in which those people reside. Residential foreclosures in
the central-city context frequently lead to extended vacancies, property deterioration, and
an accelerated decline in surrounding home values.
In response to concerns over such issues, the Federal Reserve Bank of New
York’s Buffalo Branch investigated residential foreclosure trends in Buffalo from 1990 to
2000. Our primary objective was to describe the context in which foreclosures took place
over that period. To that end, we examined the recent rise in the number of foreclosures,
analyzed the characteristics of the neighborhoods in which foreclosures occurred, and
broadly identified the nature of foreclosed loans. We analyzed Buffalo as a whole and
examined how the characteristics of foreclosure vary among the city’s communities.
Our major findings follow.
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