Study says foreclosures have cost Minneapolis public schools $150 million
A new report concludes that the housing crisis has cost Minneapolis public schools $150 million dollars in lost state funding, thanks to thousands of kids leaving town after their parents' houses went into foreclosure.
The study, conducted by Neighborhoods Organizing for Change, an advocacy group which began with a good number of carryover members from now-defunct ACORN, found that there were over 13,000 foreclosures in Minneapolis since 2006. Those foreclosures cost the city, with an estimated loss of 4,000 students in the Minneapolis public school system. The figure is based on research indicating that fifty-eight percent of foreclosed families left Minneapolis and had to enroll in a different school district.
Not surprisingly, the study points the finger of blame at banks, specifically Wells Fargo and US Bank.
The report points out that Wells Fargo, the largest bank in the Twin Cities, has appeared on both ends of the foreclosure crisis. First the study documents Wells Fargo's history of issuing subprime loans, the very devices that led to many foreclosures in the first place. Then, on the rebound, Wells Fargo has foreclosed on some 300 homes in Minneapolis.
Neighborhoods Organizing for Change is calling for several reforms, including a new state law to force banks to file an affidavit explaining why it couldn't restructure the loan of a foreclosed home.
A spokeswoman from Minneapolis Public Schools told City Pages they were studying the report and couldn't immediately comment.
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