Is Housing Diversity Good for Community Stability? Evidence from the Housing Crisis

This article explores the connections between the housing diversity of a community and its home foreclosures for a period before the peak in the national home foreclosure rate and its home sales for a period after the peak. We measure housing diversity as a mix of existing housing units by type and, separately, as a mix of zoned residential densities. We carefully select and analyze fourteen US metropolitan statistical areas. Using multivariate and spatial regression, we find that communities with lower housing diversity had higher rates of foreclosure. Finally, we discuss how our findings can help planners advance housing diversity.