What role does neighborhood affordability play in home foreclosures? Dan Immergluck and Kyungsoon Wang researched how location affordability -looking at housing and transportation costs together– impacted metropolitan areas in the United States during the recovery from the housing crisis. They pair examined data from 300 metropolitan areas.
“The housing boom and bust of the 2000s and the resulting foreclosure crisis had a serious negative impact on the U.S. economy and many metropolitan housing markets. After the Great Recession, the affordability crisis in the housing market persisted in many U.S. cities as housing cost burdens increased while incomes remained stagnant. Housing affordability, however, is not the only component of neighborhood affordability. The tradeoff between housing and transportation costs and the combination of these costs, referred to as location affordability, may have been important in determining neighborhood resilience and recovery during and after the housing crisis.”
Their findings suggest that urban form and types of market affect how impactful location affordability was on a city’s resiliency to foreclosures. High-density city centers were more protected from home foreclosures by neighborhood affordability than suburbs. “When we disaggregated the zip codes according to the market type, location affordability contributed to recovery in central cities in strong and weak metros and in the suburbs of boom–bust metros,” Immergluck and Wang report.
Their study, Neighborhood Affordability and Housing Market Resilience, was published in the Journal of the American Planning Association (JAPA).