Housing crisis isn’t over yet

The number of foreclosure filings across Ohio dropped last year to less than half the number at the peak of the housing crisis in 2009. Still, far too many Ohio families are losing their homes to foreclosure each year.

While most counties had fewer foreclosure filings in 2015 than in 2014, the Mahoning Valley had more. Initial foreclosure filings in Trumbull County increased 6 percent from 2014 levels to 926 in 2015.

This is partly for a very good reason. Trumbull County government is aggressively recovering and cleaning up abandoned properties, in partnership with the Trumbull County Land Bank and Trumbull Neighborhood Partnership. One tool in the toolbox for communities hit hard by foreclosures and blight is to do “tax foreclosures” on properties whose owners / lenders are no longer paying their taxes. Many of these properties are owned by absent lenders who left the property to deteriorate and become a nuisance.

However, at least two-thirds of Trumbull County’s 900 foreclosure filings represent the beginning stages of families about to lose their homes. Statewide, foreclosure levels are still two and a half times the level prior to subprime lending taking hold in the mid-1990s.

Research shows that foreclosure leads to economic insecurity and hardship. Losing a home saps financial stability, credit scores and household net worth and boosts the likelihood of filing for bankruptcy. For some, foreclosure is also the first step on a long path towards homelessness. The intense stress of losing a home can also bring about ill health, domestic violence, suicide and increased calls to crisis hotlines.

As residents of Trumbull County well know, the community and surrounding neighbors suffer too. A high density of foreclosures hurts property values and boosts crime, attracting squatters, vandals and drug users.

Prolonged periods of vacancy result in property deterioration and increased risk of fire. Local governments in hard-hit communities like Trumbull County often face serious fiscal stress — spending more on policing and fire suppression at abandoned properties, providing temporary assistance for displaced residents and maintaining abandoned properties — while property tax revenues are plunging due to greater numbers of property tax delinquencies and lower property values.

The high rate of foreclosures in Trumbull County over the past 20 years — almost 21,000 since the mid-1990s–have created community-wide problems that require community solutions. Many local governments are burdened with related costs they increasingly cannot afford because of falling tax revenues. Statewide, there have been over a million foreclosure filings over the past two decades.

Though more federal support is certainly required, a comprehensive statewide approach is also needed to ameliorate hardship, commensurate to the severity of the crisis. The state of Ohio can reduce foreclosures and the damage left in the wake of the foreclosure crisis by boosting state investment in housing counseling, legal aid and affordable, quality housing. The state can also help by restoring local government funding — cut drastically by the Kasich administration — and by supporting local efforts to reduce blight.

Additional state investment can help build on the amazing work being done by Trumbull Neighborhood Partnership, an innovative leader looked to as an example in other parts of the state. Not only are they renovating vacant homes, demolishing severely dilapidated properties and greening vacant side lots, they are also operating a court-ordered community service program that engages people in work to address blight as a sentencing alternative. Even better, they are now launching a new program that will train and employ low-income residents in renovation work, as well as salvaging valuable materials from homes slated for demolition, and installing landscaping infrastructure to beautify vacant properties post demolition.

The housing crisis is starting to ease, but it is not over.  We need to resume efforts to prevent foreclosure.  At the same time, we need to strengthen state and local policy and programs to restore our neighborhoods so the next generation can build wealth and thrive with the stability that safe housing provides.

Amanda Woodrum is a researcher at Policy Matters Ohio, a non-profit policy research institute.