Home Foreclosures and Community Crime: Causal or Spurious Association?*

Abstract

ObjectiveAggregate crime rates continue to decline in the United States despite the depth and breadth of the current foreclosure crisis. This trend calls into question conventional wisdom and prior research that suggest a causal, positive relationship between foreclosures and crime. The objective of this article is to consider an alternative argument, that foreclosures and crime are part‐and‐parcel of the same community‐level dynamics, and thus are not causally related.MethodsWe use random effects models to analyze community crime and foreclosure data from Chicago between 2004 and 2009.ResultsFindings reveal that crime and foreclosures are spuriously related; controlling for confounding factors such as concentrated disadvantage and the political hierarchy of communities renders the foreclosure‐crime association nonsignificant.ConclusionForeclosures and crime are each explained by antecedent community characteristics. To understand why social problems are unevenly distributed across geographic space, it is necessary to investigate why power and political influence are unevenly distributed.