SJ Quinney College of Law, University of Utah
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Abstract

The Foreclosure Crisis wreaked havoc on the finances of American households in a manner and to a degree not seen in almost a century. While most areas of the country are well on the road to recovery, the Crisis caused fundamental damage to the housing markets of some communities resulting in home-value declines that bear little hope of a meaningful recovery in the near future. Homeowners in these Hardest Hit Communities have suffered a serious economic loss on what is likely their principal asset, due in most cases to circumstances completely beyond their own control.

The best long-term approach to remedying this situation may very well reside in a comprehensive package of carefully crafted policies aimed specifically at fixing housing markets in the Hardest Hit Communities—for example, geographically targeted home purchase tax credits along with public sector investments in housing rehabilitation, strategic demolition, and neighborhood stabilization programs. The federal government spends billions of dollars annually in tax incentives to bolster the American housing market, many of which are principally of value to high-income taxpayers who have relatively little need for them. The redirection of these dollars to those in the Hardest Hit Communities in order to restore confidence in their housing markets would be a more effective and equitable approach to accomplish the government’s stated objective of promoting home ownership. But the likelihood of generating the political will to marshal a comprehensive solution and oversee its implementation in a way that meaningfully impacts home values within the ownership tenure of most of those who bought homes in the Hardest Hit Communities prior to or in the midst of the Foreclosure Crisis is increasingly unlikely as time passes.

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Housing Law Commons

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