Academic journal article Social Justice

The Foreclosure Crisis and Neighborhood Sentiments: Learning from Las Vegas

Academic journal article Social Justice

The Foreclosure Crisis and Neighborhood Sentiments: Learning from Las Vegas

Article excerpt

LAS VEGAS HAS COME TO EPITOMIZE THE CRISIS OF URBAN DEVELOPMENT IN THE United States today. For nearly 20 years, Las Vegas was touted as the most dynamic region in the country. It boasted the nation's most rapid population growth and economic development fueled by tourism and housing growth. By 2007, Las Vegas became the epicenter of the housing crisis. The city now ranks high in unemployment, home foreclosures, and underfunding for social services. Residential morale, quality of life, and sense of belonging have been compromised. For social scientists, policymakers, and urban planners, understanding the complex relationship between urban distress and community attachment is the first step toward strengthening communities and improving the quality of life for urban residents.

A key component of any sustainable metropolitan area is the sense of attachment residents have to the area, the strength of their social bonds, and their feelings about their quality of life. Fostering sustainability is a challenge for any community facing rapid population turnover, and it has been especially problematic for Las Vegas during the boom years. But the economic crisis has brought new questions to our understanding of the relationship between economic disorder and its impacts. For Las Vegas, what are the effects of the dynamic boom and bust on community attachment? In what ways has the foreclosure crisis affected Las Vegas residents' sentiments about their community? And, what lessons does this hold for understanding the effects of economic collapse on the perceptions of individuals in terms of quality of life, neighborhood connections, and attachment to place? Our study shows that unlike residents in other neighborhoods, those living in neighborhoods with a more concentrated foreclosure problem report lower neighborhood quality of life, less neighborhood satisfaction, greater physical disorder, more crime, and a greater desire to leave their neighborhoods. Our results highlight the need to consider neighborhood-level effects of the foreclosure crisis on those experiencing foreclosure and on neighbors who live in foreclosure-plagued neighborhoods.

Las Vegas and the Foreclosure Crisis

Once the "go to" place because of job growth in the gaming and construction industries, Las Vegas led the desert Southwest's extraordinary population growth between 1990 and 2007 (Lang and LeFurgy 2007). Boasting one of the highest domestic net migration rates in the country during the early 2000s (Perry 2006), in-movers to Las Vegas sought employment opportunities, low cost of living, and retirement options (CensusScope 2000). Due to such rapid population growth and the economic boom, the Las Vegas housing market flourished between 1990 and 2006. With approximately 6,000 newcomers per month arriving in Las Vegas at the height of the boom, home prices reached all-time highs in 2006. The average median price of a single-family home was $349,500 in January of 2007. Just four years later, following the economic bust and housing crisis, the median price of single-family homes in January 2011 was $132,000, which represents a 33 percent decline in prices since 2008 and a 50 percent decline through 2010 (Greater Las Vegas Realtors Association 2007; 2010). This is the largest decline in any metropolitan area in the United States (Community Resources Management Division 2010). Unfortunately, the foreclosure crisis hit Las Vegas very hard.

The Las Vegas housing market led the country with the largest concentration of subprime mortgage originations (Mayer and Pence 2008). Dependent on tourism and service-based employment, many of the people who made Las Vegas their home during the boom years either relied on income with little documentation (e.g., gambling revenue, cocktail waitresses, valet drivers) or simply were not able to afford conventional mortgage loans. Subprime mortgage products were designed to provide home ownership opportunities to the most credit-vulnerable buyers, including those with no established credit history, little documentation of income, and/orthose with smaller down payments. …

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