This segment from NPR looks at the city of Cleveland and examines how foreclosures have devastated the city and many of its neighborhoods.
"Since 2000, Cuyahoga County, which encompasses Cleveland, has recorded 80,000 foreclosures - the most per capita in the country. Nearly 19 percent of those foreclosures occurred last year, according to city statistics."
"The roots of Cleveland's ballooning foreclosure crisis took hold in the 1990s, according to county Treasurer Jim Rokakis. He says he began noticing an alarming increase in the number of home loans that had no visible means of support. Many borrowers were speculators who took advantage of offers touting no money down and cash back at closing."
"Often, a single speculator would buy up multiple homes, hoping to cash in at the close, Rokakis says. He cites one speculator who bought up at least five homes in Cleveland."
"'And until the bubble burst in sometime around October of 2006, it was a wondrous operation,' he says."
Comments
An argument destroyed
I think the Cleveland situation pretty much destroys the argument that the foreclosure crisis is the result of overly expensive housing caused by land use regulation; Cleveland is one of the cheaper housing markets, and the working-class neighborhoods decimated by foreclosures (such as Slavic Village) are cheap even by Cleveland standards.
Cleveland, Sprawl, and the Housing Bubble
Very good point. It also demolishes the claim that the housing bubble was caused by policies to limit sprawl, since Cleveland has had a massive movement to the suburbs even though the population of the metropolitan area has not grown.
Charles Siegel