Social and Behavioral Sciences Commons^™

Stochastic Models For Strategic Resource Allocation In Nonprofit Foreclosed Housing Acquisitions, Armagan Bayram, Senay Solak, Michael P. Johnson Jr.

Michael P. Johnson

Increased rates of mortgage foreclosures in the U.S. have had devastating social and economic impacts during and after the 2008 financial crisis. As part of the response to this problem, non-profit organizations such as community development corporations (CDCs) have been trying to mitigate the negative impacts of mortgage foreclosures by acquiring and redeveloping foreclosed properties. We consider the strategic resource allocation decisions for these organizations which involve budget allocations to different neighborhoods under cost and return uncertainty. Based on interactions with a CDC, we develop stochastic integer programming based frame- works for this decision problem, and assess the practical value …