Working Paper

Which Way to Recovery? Housing Market Outcomes and the Neighborhood Stabilization Program

Abstract: To help communities recover from the foreclosure crisis, Congress enacted a set of policies known as the Neighborhood Stabilization Program (NSP). NSP's objective was to mitigate the impact of foreclosures on neighboring properties, through reducing the stock of distressed properties and removing sources of visual blight. This paper presents evidence on production outcomes achieved through the second round of NSP funding (NSP2), and discusses the housing market context under which the program operated from 2010 to 2013. Two key findings emerge. First, local grantees undertook quite different approaches to NSP2. The type and scale of activity, expenditures per property and spatial concentration vary widely across grantees. Second, census tracts that received NSP2 investment had poor economic and housing market conditions prior to the program, but generally saw improved housing markets during the program's implementation period, as did non-NSP2 tracts in the same counties. Based on these findings, we outline topics and suggested approaches for additional research.

Keywords: Urban redevelopment; mortgages; housing markets; federal housing policy; fiscal federalism;

JEL Classification: H50; H70; R10; R30; R50;

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Bibliographic Information

Provider: Board of Governors of the Federal Reserve System (U.S.)

Part of Series: Finance and Economics Discussion Series

Publication Date: 2015-01-03

Number: 2015-4

Pages: 42 pages