Reevaluating Foreclosure Effects on Crime During the “Great Recession”

Abstract

High rates of foreclosures during the “Great Recession” raised concerns about the potential harmful effects of the housing crisis not just on the economy, but also on levels of crime. Grounded primarily in theories of social disorganization and incivility, a growing body of empirical research has been directed at exploring whether the foreclosure crisis stimulated higher crime rates in America than would otherwise have been experienced. Many studies have now reported a significant association between rates of foreclosure and crime during the recession, but we are skeptical of whether this represents a causal effect because it is unclear whether the traditional regression approaches applied in most of the extent research account sufficiently for preexisting differences present in areas that experienced varying levels of foreclosure. We advance the literature on foreclosure and crime by employing a propensity score matching (PSM) technique to better account for such differences, evaluating whether U.S. counties that received larger “doses” of foreclosure during the recent recession experienced higher levels of property crime than comparable counties in which rates of foreclosure remained relatively low. Our analysis shows that, once prerecession differences between counties with high versus medium-to-low foreclosure rates are removed, there is no evidence of a significant association between rates of foreclosure and crime.