Is Gentrification Inevitable?

New Orleans    Being on the wrong side of the tracks as I tried to beat the train to get to my office in time for a live radio show, I ended up driving from street to street to beat the traffic lined up to enter a road that traversed the tracks.  Weaving in and out of the blocks through this area I know well as a lower income, working neighborhood of the city, I was surprised, as my chance to finally enter the stream of cars came up, to find myself sitting in front of two brand new houses being constructed as in-fill in vacant lots in this area.

It was like seeing a giant flashing set of neon signs on a billboard shouting GENTRIFICATION ALERT!  Is it already too late?  Is there no way to stop it?  Could this neighborhood still be “saved,” so that families would not be displaced as pressure increased?  Talking to neighborhood organizers, they were skeptical.  I was disheartened, but I understood.  New Orleans has not only been losing the fight to gentrification since Katrina but abetting it.

Talking to city staffers recently in Cincinnati, one looked me flat in the eyes, and asked what ACORN would recommend to stop gentrification there.  I nodded, said, “Sure,” and the conversation went onto other topics, but I found myself subsequently reading a number of papers by Professor Tom Slater, a globally recognized expert and critic of gentrification based in Edinburgh, and someone ACORN chapters have found supportive in our fight for “living rent” in Scotland.  His argument in a nutshell is that there is nothing natural or organic about gentrification.  Instead it is all about rent-gaps and capitalistic investment and manipulative development programs that make neighborhoods and their residents simply collateral damage and outside of their concern.

The Wall Street Journal in a recent piece tried to make the case that some cities, and they mentioned New York, Philadelphia, San Francisco, and Portland among others, are making efforts to help low-income residents remain in their neighborhoods.  They cited programs that included “down-payment assistance on homes to people with historic ties to neighborhoods, passing ordinances aimed at restricting gentrification and assisting nonprofits that are buying buildings where tenants are at risk of eviction.”  Interesting, but other than taking a look more closely at these ordinances, having nonprofits buy buildings is great but there’s no way it is scalable and helping people buy doesn’t protect families from rising property taxes, insurance and other costs that force them to sell as prices soar around them.  These programs are worth a look but seem more about insuring some minimal community diversity than genuinely stopping displacement and providing some permanent protection for the community’s character and its families.

A local developer was interviewed recently and of course he made the case that gentrification was natural and good and then interestingly said something along the lines that he hoped he was right, but history would determine that in the future.  Sadly, history may not be the best judge because it will not be written by the displaced but by the gentrification advocates in all likelihood.  And, like many of these last-ditch programs, it will be written too late and after the fact, when desperate action is what is needed now to help people stay in their homes and weather the storm that is building all around them.

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Hiding Real Estate Ownership from Tenants and Land Contract Holders

New Orleans   Recently I listened to the presentation of a fine group of graduate students at the School of Social Work at Georgia State University that summarized the results of four months of work in collaboration with the ACORN Home Savers Campaign.  The report indicated the results were mixed.  Our contact and outreach goals were unrealistic.  There were a lot of reasons for that, but one the report didn’t detail, but one that all of them had experienced, was the difficulty of putting the list together of families who were on installment land contracts of various kinds.

They might have gotten cricks in their necks as they nodded in agreement with writers of the Times’ “Upshot” column on “the opaque world of ownership by L.L.Cs.”  The hook on the column was the umbrage that has been expressed by Fox provocateur and wielding right winger, Sean Hannity, about the revelations of his extensive use of LLCs or limited liability corporations first in The Guardian and now more generally.  Property ownership and tax records are supposed to be public, so you might wonder what’s the beef?  The use of LLCs was designed to provide exactly what the name says, limited liability, for property holders from external threats.  We were amused when the conservative Congressional yahoos were attacking ACORN for the number of corporate entities that were part of the ACORN family of organizations, since so many of them were separate building entities or property-based LLCs that are standard in all business, nonprofit or profit based.  Hannity seems to believe everything about property ownership should be private and obscure, and real estate markets in New York City and London are well known playgrounds for hidden transfers of the rich and corrupt from around the globe.

At the same time Upshot joined the wailing wall of the GSU students and many of the volunteer army of researchers that have worked to create the doorknocking lists for ACORN Home Savers Campaign by unraveling property records, especially given the propensity of all of these kinds of companies to not register their holdings.  Upshot seemed to be looking over our shoulder in places like Memphis where we found it next to impossible to correctly identify all of the ownership vehicles and properties owned by hedge funds like Apollo and others in the market.

They note that a Harvard doctoral student, Adam Travis, has found that in markets like Milwaukee a quarter of the rental market is held by LLCs.   The downsides are numerous when anyone gets around to looking.  The Hannity’s, superrich, launderers, and mobsters might get upset, but the real victims are lower income tenants-buyers who have no idea who really owns their house behind some address in South Carolina or Texas where they are sending their payments.  Cities that want to hold owners accountable for abandoned or delinquent properties are also stuck with the same problem in finding the real owners behind the shells, some of which have gone under as well.  In Cleveland recently, I listened to a discussion of the problem of foreclosed houses cycling in and out of city control in lower income neighborhoods in sort of a reverse dump by hidden LLC owners when they couldn’t sell or rehab so simply abandoned properties back to the city housing list.

As Times’ reporter Emily Badger summarizes, “it is no easy thing to get a faceless company to court.”  As we have found, it is even harder for a tenant or an owner-occupant to hold such a deed holder or landlord accountable.  A city’s exasperation should be matched by a commitment to fix the problem, not a rationale for how hard it is to help its citizens get a small modicum of justice in the housing market.

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