Foreclosures and Metropolitan Spatial Structure: Establishing the Connection

Abstract

This article explores the link between foreclosures and costs of commuting. For metropolitan spatial form, the important question on spatial location of foreclosures is whether their concentration in suburbia stems from higher risk lending during the subprime boom alone or whether costs of commuting added additional risk because of their stress on household budgets. The analysis attempts to single out the impact of proximity to the central business districts and transit and employment accessibility in accumulation of distressed properties in Maryland, and the Washington and Baltimore metropolitan areas separately. The analysis shows that even after accounting for subprime lending and employment, distance to the central business district impacted levels of distressed properties, particularly in the Washington region. There were more foreclosures farther from the urban core and in areas with relatively lesser access to employment.

Keywords:

• foreclosure
• spatial
• housing
• urban environment
• default
• mortgages
• cost of commuting

Notes

^1. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

^2. Available at http://www.lpsvcs.com/NewsRoom/IndustryData/Documents/2011%20-01%20January%20Mortgage%20Monitor/LPS_Mortgage_Monitor_January_2011.pdf

^3. Maryland Homeownership Preservation Task Force, November 29, 2007, available at http://www.dhcd.state.md.us/Website/documents/TaskForceReportFinal.pdf

^4. The NSP3 program was the third allocation of the Neighborhood Stabilization Program grants to communities in need.

^5. U.S. Department of Labor.

^6. http://beta.bls.gov/maps/cew/MD

^7. The description of SMZs is available from the author upon request.

^8. Employment in the other category includes farming, mining, forestry, fishing and agricultural support, construction, health and social services, arts, entertainment and recreation, accommodations, food services, and other services including rental.