Kent County foreclosures skyrocketing

Home foreclosures have increased dramatically in the past four years, hitting several Kent County communities and Grand Rapids neighborhoods particularly hard. From 2004-2007, rates of foreclosure jumped 176 percent overall in Kent County, and 179 percent in the City of Grand Rapids.

These findings come from a new report just released by Grand Valley State University’s Community Research Institute (CRI), which analyzed residential foreclosures from January 2004 through late December, 2007. The report, titled “Sold Short: Residential Foreclosures in Kent County, 2004-2007,” represents the most accurate, detailed and current data yet available on foreclosures in Grand Rapids and Kent County.

The overall number of foreclosures in Kent County jumped from 1,133 (0.6 percent of homes) in 2004 to 3,116 (1.7 percent of homes) in 2007, with the largest increase occurring in 2006. The foreclosure rate in Grand Rapids jumped from 1 percent in 2004 to 2.8 percent in 2007 — an increase of more than 1,000 foreclosures.

Although foreclosure rates increased in nearly every part of the county, the report identifies several lower-income and African American neighborhoods in Grand Rapids with very high foreclosure rates. Five neighborhoods — Baxter, Fuller Avenue, Madison Area, South East Community Association and Oakdale — had foreclosure rates more than double the city average, with as many as 7 percent of neighborhood homes foreclosed in 2007 alone.

Economically struggling villages and cities in the northern part of the county have also suffered significant foreclosure losses, with the villages of Casnovia, Kent City, Sand Lake and Sparta, and the city of Cedar Springs experiencing foreclosure rates of between 2-3 percent of homes in 2007. However, the study revealed that wealthier parts of the county are not immune. Some affluent areas, particularly East Grand Rapids and Ada Township, saw foreclosure rates rise by more than 300 percent in the past few years.

According to the report’s authors, the wave of foreclosures impacts displaced families, neighborhood blight, crime, depreciating home values and declining tax revenues to support county services.

The report represents the first research to emerge out of a recent data-sharing agreement forged between CRI and Kent County in the last few months. CRI researchers worked with staff from the Kent County Bureau of Equalization and IT/GIS departments to obtain the data and identify appropriate ways to analyze it. Non-residential foreclosures and multiple deeds that would otherwise skew the analysis were dropped.

“We got the data sharing agreement in place, and at the same time there was a lot of interest in foreclosures without a lot of good data or information out there about what was going on,” said Mary Mc Donald, director of CRI. “So, I think on both ends of the partnership there was a sense of pulling together to help get the information out to the community.”

The report does not explore why foreclosures are hitting certain areas. That, as well as a closer look at the economic and social impacts of foreclosure, are topics CRI hopes to explore further in upcoming studies. However, the study’s authors point to other research that shows the impact extends far beyond the individual homeowner. Some estimates could place the direct cost to Kent County municipalities arising from home foreclosures since 2004 in the range of tens of millions of dollars. This cost does not include losses in county and municipal revenue that occur when foreclosures drive down market values in the surrounding neighborhood.

The full report is available from the Community Research Institute Web site at www.cridata.org. For more information contact Shelby Chartkoff, senior researcher for CRI, at (616) 331-7207 or [email protected].; or Gustavo Rotondaro, associate director for CRI, at (616) 331-7591 or [email protected].

The Community Research Institute (CRI) is a partnership between the Johnson Center for Philanthropy at Grand Valley State University and the Grand Rapids Community Foundation. CRI conducts research and evaluation and develops technology to help local communities, nonprofits and foundations access critical information to support effective decision-making.