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Lancaster, California, a city of 145,000 people about 60 miles north of Los Angeles, is among the hardest hit in the nation by the housing bust. Home prices have fallen from an average of $320,000 in 2007 to $122,000 today. More than 5,000 homes in the city are in some stage of the foreclosure process.
History shows those empty houses are magnates for crime, drug dealing and other nefarious activities. Which is why Lancaster is cracking down on gangs and applying for $5 million in federal stimulus funds to buy up and resell abandoned homes at reduced prices so families can live in them. “The trick is keeping the neighborhoods filled with homeowners,” says Lancaster Mayor R. Rex Parris.
In January Parris pushed through a city ordinance requiring that pit bulls and other vicious dogs be neutered. Why pick on pit bulls? Gangs had been breeding them in abandoned homes and using them to terrorize residents.
The city has taken other steps to fight crime: Picking up truant kids so they don’t end up with gangs. Lancaster recruited more citizens for neighborhood watch programs after finding people are more comfortable reporting a crime or suspicious activity to a neighbor than to the police. The city also came up with the money to hire more sheriffs. Law enforcement officials are also sending out warning letters to kids suspected of running with a bad crowd. Says Parris: “We’ve become totally intolerant of any kind of gang acitivity.”
It’s working. Despite all those empty homes, Lancaster saw a 25% decrease in crime in the first half of this year, exactly the opposite of what you’d expect.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.