The Foreclosure Crisis and Children: A Three-City Study

Report by Kathryn L.S. Pettit, Jennifer Comey
January 2012

Urban Institute   (NNIP Coordinator)

This National Neighborhood Indicators Partnership cross-site study describes how foreclosures affected children in Baltimore, New York City, and Washington, D.C. between 2003 and 2008. The number of children living in foreclosed homes rose sharply over the time period and the majority of students affected were African-American. Foreclosure prompted more residential mobility and school switching compared to other students in all three cities. Whether foreclosure resulted in students switching to schools of lower quality compared to other school switchers was mixed across the three cities. Students moving homes due to foreclosure experience similar changes in neighborhood quality as other movers.

Recommendations for School Officials

  • Public school officials and principals in jurisdictions where schools have strong neighborhood enrollments should be aware of the surrounding foreclosure trends so they can (1) prepare their school counselors and homeless liaisons to conduct targeted outreach to students and their families at the schools, (2) be prepared to provide social services counseling, and (3) refer families to housing counseling services.
  • Because foreclosure can result in increased churning of students, administrators and teachers should be given additional resources to cope with the added challenges.
  • School districts should allow students to remain enrolled in their original school for the duration of the school year even if a foreclosure happens midyear and students move outside of the school boundary area. This will help maintain consistency for the students and their families, as well as reduce instability in the classroom.
  • Foreclosure may result in doubling up and homelessness. Principals and school administrators should identify students eligible for benefits under the McKinney-Vento Homeless Assistance Act and provide them with the appropriate services, such as the right to stay in the origin school for the duration of the school year, as well as transportation subsidies to get the students to and from school.


Recommendations for Housing Counselors

  • Housing counselors should inform families going through foreclosure about the potential negative impacts on their children of switching schools midyear, and provide information about available school support services, as well as the school policies regarding midyear residential moves.
  • Counselors should connect displaced families with housing search and rapid rehousing assistance.
  • To protect renters, counselors should provide outreach and counseling that specifically address the rights of renters in foreclosed properties (many counseling programs focus on helping homeowners alone).
  • In areas with Latino families, counseling services and outreach materials should be available in Spanish.
  • Counselors can partner with highly affected schools to do financial education outreach to parents.


Recommendations for Municipalities
Municipalities can stem the negative effects of foreclosure, even for families that do not have children.

  • Strengthen local renter protections so that renters in good standing are able to remain in their apartment even if the building is foreclosed and ensure that the property is adequately maintained (e.g., utilities stay on, grass is cut, and upkeep of the property continues).
  • Create a "real-time" data-sharing system that gives housing and school counselors the location of buildings (homeowner and multiunit rental) that receive a first notice of foreclosure. Housing counselors, as in Washington, D.C., can then visit the buildings to inform renters of their rights and opportunities for counseling, and municipalities can send information to homeowners informing them of their rights.