Since 2006 Americans have seen the number of foreclosures rise, and the economic damage has been overwhelming, but foreclosures are not just a financial problem. Recognizing the severity of the crisis, the government has put forth several initiatives, some providing aid to banks, their balance sheets deluged with billions in foreclosure inventory, and other plans attempted to help struggling homeowners remain in their homes. However, little has been to actually alleviate the problem, and foreclosures continue at a record pace.
Not only did the government’s efforts fail to provide relief, they served to anger many who felt wronged by such plans. “Kick the deadbeats out,” some have suggested. “I didn’t use my home as an ATM, and I pay my bills.” The anger, often directed at those facing foreclosure was for many, I believe, frustration with the government and big banks for their complicity in allowing the problem to reach a crisis level, and for their failures to properly address it. But the problem goes beyond who is at fault and ultimately reaches each of us.
Regardless of whom we feel to be culpable, and whether or not we empathize with the actual victims of foreclosure, the result of having millions of additional vacant homes could create social and economic problems of immense proportions, the effects of which may be felt for decades. Each foreclosure has a direct impact on local home values, and each abandoned home creates an environment for crime and blight. Municipalities, their budgets already strained by the recession, will struggle to provide adequate fire and police protection. Funding for local schools will suffer, local businesses will fail, and the character of some neighborhoods will be forever changed.
While many of the foreclosures may be purchased by investors, they’re frequently bought at bargain-basement prices and will either be offered as rental units or sold for quick profits. In either case, the character of the neighborhood may ultimately be altered.
Of course there are exceptions—some neighborhoods will see no adverse effects—but the number of locations that will be or have already been dramatically altered is sufficient to have a long-term social impact, the results of which may not surface for several years. We need to solve the foreclosure crisis; and as much as possible we need to keep neighborhoods intact. Failure to address the problem will cost much more in the end.
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