Every single foreclosure in hard-hit areas can decrease the surrounding houses’ property values by up to 30 percent , according to the IMF, creating a downward property value spiral that has created Detroit’s infamous $1 homes.

Sharp property value reductions lead to billions of dollars of losses in household savings for families who have not missed a single mortgage payment. The foreclosures also reduce the local government’s tax revenues and jack up the city’s foreclosure-related expenditures. One study estimated that every single foreclosure costs the government $2,058 in lost property tax revenue and as much as $34,000 per foreclosure in costs like eviction procedures. Multiply these government losses by millions of foreclosures since 2008, and it’s not hard to see why many local governments are teetering on the brink of bankruptcy.