NEIGHBORHOOD HOUSING INVESTMENTS AND VIOLENT CRIME IN SEATTLE, 1981–2007 ∗ MAR ´ IA B. V ´ ELEZ CHRISTOPHER J. LYONS Department of Sociology University of New Mexico BLAKE BOURSAW Robert Wood Johnson Center for Health Policy University of New Mexico KEYWORDS: neighborhoods, external investments, violent crime, home mortgage lending, public social control Despite significant advances in the study of neighborhoods and crime, criminologists have paid surprisingly less attention to the extralocal forces that shape violence. To address this issue, we draw on an emerg- ing body of work that stresses the role of home mortgage lending—a resource secured via interaction with external actors—in reducing neigh- borhood violence and extend it by addressing concerns that the lending– violence relationship is spurious and confounded by simultaneity. We explore the longitudinal relationship between residential mortgage lend- ing and violence in Seattle with a pooled time series of 118 census tracts over 27 years, and we instrument our endogenous predictors (home mortgage lending and violent crime) with changes in their levels from prior periods. Employing Arellano–Bond difference models, we assess both the effect of mortgage lending on violent crime as well as the effect of violent crime levels on mortgage activity. We find that infusions of home mortgage lending yield reductions in subsequent violent crime; Additional supporting information can be found in the listing for this arti- cle in the Wiley Online Library at http://onlinelibrary.wiley.com/doi/10.1111/ crim.2012.50.issue-4/issuetoc. * We received a grant from the Robert Wood Johnson Foundation Center for Health Policy at the University of New Mexico to conduct this research. We are very grateful to Ruth Peterson, Laurie Krivo, and fellow members of the 2010 Summer Research Institute at The Ohio State University (attended by the first author), and to Eric Baumer, Rob Greenbaum, and Wayne Santoro. Direct correspondence to Mar´ ıa B. V´ elez, Department of Sociology, University of New Mexico, MSC05 3080, 1 University of New Mexico, Albuquerque, NM 87131–0001 (e-mail: mvelez@unm.edu). C  2012 American Society of Criminology doi: 10.1111/j.1745-9125.2012.00287.x CRIMINOLOGY Volume 50 Number 4 2012 1025