By Dennis Rodkin
August 8, 2007
Chicago
Magazine
The growing number of foreclosures has already wiped out
several mortgage companies and many families’ financial footholds. Now some
observers say it could turn back the clock in some inner-city neighborhoods and
moderate-income suburbs that had shown improvement over the past decade.
Although foreclosures are occurring at every income
level, they tend to be isolated cases in affluent areas. Neighboring properties
tend not to lose value just because somebody down the block got overextended
and lost the house. “But when you have four or five foreclosed properties on
[one] block, it has an effect,” says Geoff Smith,
the research director for the Woodstock Institute, a Chicago-based economic
development advocate for low- and moderate-income neighborhoods. “The
properties are boarded up, and crime starts to rise.” As a result, property
values decline.