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Weathering the Recession: The Financial Crisis and Family Wealth Changes in Low-Income Neighborhoods

Leah Hendey, Signe-Mary McKernan and Beadsie Woo

The Annie E. Casey Foundation and the Urban Institute

2012

Assets help families meet short-term needs and attain long-term goals, assisting them in weathering financial crises — job loss or unexpected bills — and realizing goals such as owning a home, financing retirement or investing in higher education or a small business. The recent financial crisis has shown both the importance of asset building and that it is by no means a risk-free proposition. This report sheds more light on how families have fared during the Great Recession, looking more closely at those living in low-income neighborhoods who may see disproportionate effects from the crisis due to targeted subprime lending, less access to traditional credit sources and higher unemployment rates. It uses the variation in household and neighborhood characteristics within and across several low-income neighborhoods that were part of the Foundation’s Making Connections initiative to identify the families most affected by the crisis and examines the relationship between household and place characteristics and changes in wealth.