Priming the Pump: Public Investment, Private Mortgage Investment, and Violent Crime

Recent neighborhood crime research suggests that increased mortgage investment in local communities can help reduce street crime by defending against physical decline and improving perceptions of the neighborhood, which make informal social control more likely. Unfortunately, the neighborhoods that could benefit the most from this relationship are the least likely to get private mortgage investment, as mortgages tend to flow towards neighborhoods that are already stable. In this paper, we examine whether public investment, which can be targeted at disadvantaged neighborhoods, can play a similar role as private investment in influencing neighborhood outcomes. Specifically, we examine whether Seattle's Neighborhood Matching Fund program, a municipal initiative that provides matching funds to local organizations planning neighborhood improvement projects, is associated with reductions in crime, both directly, through community-building and physical improvements, and indirectly, by encouraging increased private mortgage investment.