ICIC: Inner City Economic Forum weblog

Forum Conference Call 4/22/08

How has the inner city foreclosure crisis affected the urban economy?

On April 22, 2008, the Initiative for a Competitive Inner City (ICIC)'s Inner City Economic Forum hosted a conference call on "Inner City Foreclosures and Urban Economic Development,"  featuring Teresa Lynch, Director of Research at ICIC and Dr. George McCarthy, Senior Program Officer of the Economic Development unit at the Ford Foundation. Also on the call were almost one hundred representatives from cities, community development organization, banks, real estate developers and research organizations.

The call had two objectives: first, to provide information about foreclosure and REO rates in inner and central cities and outline the likely the policy responses and their effects on urban areas.  The second was to gather information from cities and community organizations about the on-the ground-situation: local foreclosure and REO trends; the effects of REOs on economic development in affected neighborhoods; and local policy responses and their effectiveness. 

Let us know your perspective, experience and feedback, particularly on the following topics:

• Local policy and programmatic responses and their effectiveness
• Information gaps that you are facing
• The effects of foreclosures and REOs on economic development in affected neighborhoods

ICIC Research Report on Inner City Foreclosures

Did you know that foreclosure rates in inner city neighborhoods are two times higher than in the rest of the U.S?

Recent research by ICIC on foreclosure and REO rates in America’s inner cities indicate that U.S. inner cities have been disproportionally impacted by the current foreclosure crisis.  Read the full ICIC Report on "Foreclosures and the Inner City: The Current Mortgage Crisis and its Inner City Implications"  here.

In addition to the direct impact on housing markets and resident wealth, ICIC is also concerned about potential long-term economic development issues being created by this crisis.  From ICIC’s research, we know that many inner cities have relied on the construction, housing, and real estate cluster (CHRE) to fuel job growth over the past decade.  In the forty-five inner cities that experienced job growth between 1998 and 2005, CHRE accounted for almost 20% of new employment.  Of the fifty-five inner cities that experienced new job loss during that period, CHRE actually added jobs in twenty-one.  As a result, a large number of inner cities could be facing daunting economic challenges as they concurrently experience unprecedented foreclosure and REO rates; loss in wealth from housing price depreciation; and large-scale erosion of their employment base.  These economies could be vulnerable to long-term decline if policies and practices to address this situation are not identified or developed quickly.

Do you have any comments or questions on the ICIC research report? Any further analysis or data that you would suggest?