USC study shows anthrax attack in Seattle would hurt housing market

A study published by the University of Southern California shows that an anthrax attack in downtown Seattle might cause a significant drop in housing prices and send foreclosures soaring.

The study was funded by the U.S. Department of Homeland Security and was published in in the journal Risk Analysis. It is the first study of its kind, showing how a terrorist attack using biological or chemical agents would affect the housing market.

The study used the release of airborne anthrax in the city center as its scenario. The results showed that an attack like this would send housing prices down 33 percent, produce 70,000 foreclosures and prompt 200,000 to leave Seattle. These results would be similar to the aftermath of Hurricane Katrina in New Orleans.

"It can be the domino that starts the chain reaction in terms of an economic downtown," Adam Rose, the study's co-author and research professor at the USC Sol Price School of Public Policy, said. "You have the possibility of a big black hole in the middle of a major city."

Without a precedent to go by, the study used the numbers from the housing crash and foreclosure crisis in 2008. With these figures in mind, the study looked at the closest thing to a chemical attack, the natural disaster Hurricane Katrina, and estimated what would happen in a terrorist attack.

"These types of biological or chemical attacks are something people have no experience with," Rose said. "They scare people because the threat can linger. Establishing effective risk communication about the initial threat and progress toward decontamination would be very helpful to help people overcome their fears. This would mute some of the decline in real estate prices."