A new model of neighborhood change: Reconsidering the role of white flight

Abstract

New Orleans, a highly segregated city with low homeownership, experienced a tremendous number of housing foreclosures between 1985 and 1990. This study highlights the process and impact of foreclosure in the urban housing market, which contributes to an understanding of their impact on the spatial structure of the city. Two aspects of foreclosure are examined: the differential impacts of foreclosure on low-income and African-American householders and changes in socioeconomic conditions (neighborhood change and the spatial structure of the city) resulting from foreclosure.Conventional wisdom holds that urban neighborhood transformation is driven largely by white flight. The data presented in this article suggest a counterhypothesis. Middle-income professional whites employed in businesses impacted by recession who had recently bought housing with high loan-to-value ratios were forced to sell or have their houses foreclosed upon. The depressed market, in turn, made such housing affordable to middle-class blacks interested in homeownership. Thus, black economic opportunity, rather than white flight, dramatically transformed the racial composition of many New Orleans East neighborhoods.

Neighborhood effects of concentrated mortgage foreclosures

“…For instance, the higher the housing density surrounding foreclosed properties, the smaller the geographic area that is likely to be affected. (Lauria 1998;Lauria 1999 and2000) find that foreclosures accelerated racial transition in New Orleans by depressing housing prices and creating opportunities for lower-income black households to move into formerly white-occupied homes. They also find that higher foreclosure rates were associated with higher vacancy rates and lower proportions of owner-occupied housing.…”

What makes community reinvestment act agreements work? A study of lender responses

“…Kain (1968) was perhaps the first to point to economic considerations, arguing that the suburbanization of employment, particularly employment requiring lower levels of technical skill, combined with discrimination in housing to isolate blacks in locations with little or no job growth (the "spatial mismatch" hypothesis). Murray (1984), Frey (1980), Lauria (1998), and Bradford and Kelejian (1972), among others, have made similar arguments.…”

Housing Disinvestment and Crime in a Phoenix Suburb: Exploring the Differential Effects of Investors and Owner-Occupants

“…However, as investors may be less likely to resist the foreclosure process compared with owner-occupants, FOIs may act as more of a catalyst for residential transition as tenants move out and new occupants move in. This may not only disrupt social ties among residents but also change a community's demographic and socioeconomic characteristics (Baxter and Mickey 2000;Gerardi and Willen 2009;Lauria 1998;Li and Morrow-Jones 2010), generating social disorganization and weakening its social control. In addition, abandoned FOIs may increase crime not only directly through physical disorder (Kelling and Coles 1996;Skogan 1990) and criminal opportunities (Cui and Walsh 2015;Krivo and Peterson 1996;Spelman 1993) but also indirectly by encouraging other residents to fear for their safety and move (Skogan 1990).…”