Document Type

Working Paper

Publication Date



We explore housing foreclosure as a mechanism that links economic shocks and neighborhood change, particularly the process of racial transition. A panel data set of the 1980 and 1990 New Orleans, Louisiana Census of Population and Housing was merged with mortgage foreclosure data aggregated to the block group level. The analysis indicates that housing foreclosures added momentum to the process of racial transition and neighborhood change, net of the effects of exogenous economic shocks and other variables like median income of residents, change in the value of owner-occupied housing, or the existing racial distribution of population in the neighborhood. Foreclosure appears to have the strongest effect on racial transition in block groups where resident incomes are above the lowest levels, and there is a pre-existing and increasing black population.