Confronting the “Second Wave of the Tsunami”: Stabilizing Communities in the Wake of Foreclosures
In July 2008, the Federal Reserve Bank of San Francisco convened a symposium in Los Angeles on the topic of stabilizing communities in the wake of foreclosures. The goal of the conference was to identify strategies that could help to mitigate the negative spillover effects of foreclosures on families and neighborhoods. Frank Ford, a veteran community developer from Cleveland, caught everyone’s attention when he referred to the rise in real estate owned properties (REOs) as the “second wave of the tsunami.” With maps of Cleveland literally covered with dots of REOs, Ford graphically showed that communities no longer have to contend solely with the loss of assets and home ownership associated with foreclosure, but that they must now also confront the crime, neighborhood disinvestment, and loss of revenue associated with concentrations of vacant and abandoned properties. There was a collective recognition in the room that the current foreclosure crisis threatens to undo years, if not decades, of community investment.
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