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

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: Federal housing policy, Fiscal federalism, Housing and real estate, Mortgages and credit, Urban redevelopment

JEL Classification: H5, H7, R1, R3, R5

Suggested Citation: Suggested Citation

Schuetz, Jenny and Spader, Jonathan and Buell, Jennifer and Burnett, Kimberly and Buron, Larry and Cortes, Alvaro and DiDomenico, Michael and Jefferson, Anna and Redfearn, Christian L. and Whitlow, Stephen, Which Way to Recovery? Housing Market Outcomes and the Neighborhood Stabilization Program (December 3, 2014). FEDS Working Paper No. 2015-004, http://dx.doi.org/10.17016/FEDS.2015.004, Available at SSRN: https://ssrn.com/abstract=2561527 or http://dx.doi.org/10.2139/ssrn.2561527