It’s long been known that living in an unstable housing situation puts kids at higher risk of all sorts of negative outcomes. They are more likely to have problems in school, health problems, social problems….the list goes on and on. So given the huge number of home foreclosures over the past few years, it seems important to consider the impact this housing crisis is having on kids nationwide and in Wisconsin. A new report from First Focus, “The Ongoing Impact of Foreclosures on Children,” does that.

The report uses foreclosure estimates originally compiled by the Center on Responsible Lending using a couple of different proprietary data sets. The foreclosure numbers were then combined with U.S. Census Bureau data on average number of children per household living in owner-occupied housing with an outstanding mortgage, and assumptions related to the percentage of rental homes with delinquent mortgages and the average number of children living in those households.Overall, the report estimates that 8 million children nationwide will be directly affected by the mortgage crisis. That’s about 1 out of every 10 American children. Of those 8 million kids, 2.3 million have already lost the home their family owned; 3 million are at risk of losing their family-owned home; and another 3 million have lost or are at risk of losing their rented home.

Obviously, the foreclosure crisis has affected some states more profoundly than others. Percentage-wise, Nevada’s children are experiencing the greatest impact of foreclosures on owner-occupied homes; 19% of the children in that state are being affected by owner-occupied foreclosure. But for sheer numbers, California is feeling the impact the most; foreclosures of owner-occupied homes are projected to affect over 1 million California kids.

Wisconsin falls about in the middle of the pack. First Focus estimates that 78,000 Wisconsin children—enough to fill Lambeau Field in Green Bay —will be impacted by foreclosure on their family-owned home.

Foreclosure harms children in a variety of ways. Families facing foreclosure are much more likely than other families to move, which causes considerable financial and psychological stress. The report specifically examines the effects of mid-year school disruptions. For every forced move, a child’s math and reading scores drop by the same amount as if they had missed a month of school. In addition to the well-documented impact on health and education outcomes, the stress of foreclosure affects the way parents interact with their kids.

First Focus includes several policy recommendations in a companion paper, including these:

• Improving access to refinancing, including revisions to the Home Affordable Refinance Program (HARP) and fast-tracking national mortgage settlement payouts.
• Making the 2009 tenant protection measures permanent. • Funding the National Housing Trust Fund.
• Allocating adequate funding to maintain Section 8 rental assistance levels.
• Fully funding programs that provide resources for educating homeless children and youth. The report also recommends adequate funding for other programs that families facing a housing crisis rely on, such as Temporary Assistance for Needy Families (TANF), Chidlren’s Health Insurance Program (CHIP), and Supplemental Nutrition Assistance Program.

–Bob Jacobson