The Impact of the Housing Crisis on Children

The total number of home foreclosures across the country in 2009 reached 2.8 million; a 21 percent increase from 2008. This crisis has impacted families, communities and the economy; however the specific impact on children has largely not been researched.

A recent report by The Urban Institute titled, Smallest Victims of the Foreclosure Crisis: Children in the District of Columbia, addresses the impact of the housing crisis on children in the nation’s capital. This report is one in a three-part series of The National Neighborhood Indicators Partnership (NNIP) to explore how the foreclosure crisis is affecting school-age children in New York, Baltimore, and Washington DC. The report describes the D.C. housing market including trends in foreclosures; includes information regarding households with public school students going through foreclosure; and addresses the implications for the schools and agencies providing housing and services.

While the report states that there has not been an extensive amount of research to date on the effect of foreclosure on children, they do site research stating that:

• Residential moves caused by economic instability are disruptive and disorienting for children because their parents are occupied with financial concerns and finding a new home.
• Disruptive or numerous residential moves are linked to children’s academic problems, such as grade retention, school completion, and a lack of interpersonal skills.
• Several studies have found that residential mobility is mostly detrimental to children when the move is reactive instead of strategic, or if the move was caused by some factor of turbulence within the household, such as a loss of a job or change in family composition.

Understanding the ways that the housing crisis has impacted children is critical for creating policy that addresses the complex needs of families during the recession. This report offers important information about the way that foreclosures have impacted children in D.C. and the ways that systems might respond to the ever growing needs created by the housing crisis. For policymakers across the country this brief presents some compelling ideas that might also relate to their communities.

For more on reducing home foreclosures.