This paper tests the effectiveness of vacant property registration ordinances (VPROs) in reducing negative externalities from foreclosures. VPROs were widely adopted by local governments across the United States during the foreclosure crisis and facilitated the monitoring and enforcement of existing property maintenance laws. We implement a border discontinuity design combined with a triple-difference specification to overcome policy endogeneity concerns, and we find that the enactment of VPROs in Florida more than halved the negative externality from foreclosure. This finding is robust to a rich set of time-by-location fixed effects, limiting the sample to properties within 0.1 miles of a VPRO/non-VPRO border and to a number of other sample restrictions and falsification exercises. The results suggest that an important driver of the negative price effect of nearby foreclosures is a non-pecuniary externality where the failure to maintain or secure a property affects one’s neighbors.
Federal Reserve Bank of Atlanta: Foreclosure Externalities and Vacant Property Registration Ordinances
Industry Update
November 19, 2019
Source: Federal Reserve Bank of Atlanta
Additional Resource:
Foreclosure Externalities and Vacant Property Registration Ordinances (full white paper)
Related Posts
Land Bank Turns Problem Property into Freeport Asset
A once-vacant house in Freeport has been transformed from a neighborhood eyesore into a renovated home courtesy of the Northern Illinois Land Bank.
U.S. Foreclosure Rates by State – May 2026
ATTOM released the full list of foreclosure rates by state, including counties with the highest number of foreclosures, for May 2026.