The contemporary foreclosure crisis and US crime rates

Foreclosure rates in America reached unprecedented levels during the last half of the 2000s, and many observers have speculated that elevated crime rates were one of the probable negative collateral consequences of this trend. We examine this issue with a comprehensive county-level analysis of the role of foreclosure in shaping contemporary crime patterns, highlighting the possibility of theoretically informed non-linear and conditional relationships. Multivariate regression models that account for the well-documented spatial autocorrelation of crime rates and the possible endogeneity of foreclosure reveal a positive association between rates of foreclosure and property crime that accelerates significantly once foreclosure rates attain historically high levels. Multiplicative models indicate that this pattern holds for burglary across diverse county conditions, but the observed non-linear effect of foreclosure on robbery rates is limited primarily to areas that also exhibit relatively high levels of resource deprivation and limited new housing construction.

► We model the relationship between county-level foreclosure and crime.
► Analysis considers endogeneity of foreclosure and spatial dependence of crime.
► Results indicate functional form in study of foreclosure and crime is important.
► Positive effect of foreclosure on crime observed mainly at high foreclosure levels.
► The effect of foreclosure on robbery is conditioned by levels of structural disadvantage.