Are suburban and urban environments like two poles? If one becomes poorer, does the other get richer? In any case, this Atlantic Monthly article speaks about the inevitable effect of abandoned, foreclosed, and hastily rented suburban homes that were built in the last real estate boom. In short, there is beginning to be anecdotal evidence that crime, vandalism, and traditionally "urban" problems are occurring in these areas. I know for a fact that in Philadelphia as areas in South, Northeast, and West Philly gentrify, African-American families are leaving the city limits faster than young urban professionals and hipsters can fill up the abandoned homes.
Similarly, abandoned homes in suburban areas are having problems getting filled. Some of them are for lack of buyers (a couple thousand-home development at the tail end of bubble can be like that), but in other cases banks are foreclosing on their mortagers and then not taking the title of the house in order to avoid paying taxes on a propert they know they can't sell. Why foreclose in the first place? Accounting, I think. By doing the foreclosure the finances are shored up on paper and the bad loan closed out.
But the effect is that homes in slumping markets are abandoned, and will in all likelihood remain that way.
Posted by matt at April 3, 2008 5:14 PM | TrackBack