The Housing Landscape in Los Angeles: Studying Financial Resiliency of Neighborhoods in the Aftermath of the Foreclosure Crisis

Urban Planning Thesis

Ranjani Neelakanta

Stacey Sutton, advisor

The burst of the housing bubble in 2007 led to high concentrations of foreclosures across the nation, disrupting the housing market at both the individual and neighborhood level. The neighborhood level effects are only beginning to be understood now, with some neighborhoods recovering while others still struggle to retain their character. The variations of long-term effects amongst neighborhoods that were significantly affected by foreclosures questions whether certain attributes of neighborhoods provide greater neighborhood stability, or financial resiliency, in times of economic downturn. This study analyzed the financial resiliency of neighborhoods in the aftermath of the foreclosure crisis in the city of Los Angeles, where the diverse makeup of neighborhoods allows a wide array of housing characteristics to be evaluated. This research aimed to understand two phenomena as a result of the foreclosure crisis: whether certain physical and social attributes of housing play a role in determining a neighborhoods ability to be financially resilient and if current housing policies in Los Angeles city are appropriate for providing neighborhood resilience in distressed neighborhoods. Using GIS spatial analysis, visual documentation and interviews with Neighborhood Council members, the analysis revealed that neighborhoods behaving financially resilient tend to have greater stock of renter-occupied housing, lower percentages of single-family detached homes, and higher levels of housing-type diversity. They are also located in lower income, more racially diverse areas. However, housing policies that induce this type of housing production may not have the desired effect if the community forces work against them. In order for such housing policies to be successful, these community dynamics need to be taken into account and incorporated into housing policies so that future housing growth will lead to more financially resilient neighborhoods.