The Scarring Neighborhood Blight without an Answer

Cleveland     It is almost gospel among community organizations and their leadership to rehabilitate housing first and only demolish as a last resort.  At the same time few community organizers have not heard the plea from their members that abandoned and derelict properties are huge issues for safety and home value and acted upon those demands.  The statistics also make the neighbor’s case and prove it repeatedly.  A study several years ago established that abandoned or vacant homes even blocks away lowered home values appreciably.

When I was in Cleveland several months ago I studied closely the work that the Thriving Communities Institute and its lead researcher, Frank Ford, published making their case, admittedly counterintuitively, that demolition of abandoned houses did more to restore neighborhood value that rehabilitation did.  I have to concede having closely examined their numbers that the data seems to make that case from what I can tell, so I acknowledge it intellectually, but in my heart I’m still not there.

Spending several hours with Jim Rokakis, Frank Ford, and Jay Westbrook, I was once again indoctrinated on this issue, but what moved me more, though on a different but related issue, was touring several Cleveland neighborhoods with Jim.  In some amazingly effective political and organizational work, Jim and the Thriving Communities team had pulled millions out of the bank settlement and other hats by making the case for demolition to save neighborhoods, and that work has funded the demo of thousands and thousands of houses in the area.

But, the demo money, pried loose as part of the impact of the foreclosure catastrophe over the last decade, was restricted to single and double residential units, and specifically barred use of the money for multi-unit apartments whether fourplexes or more.  A picture book had been open on the table in front of us that showed hundreds in disrepair, too expensive arguably to rehab given the market and location.  They had made the book to make their case, and their case was rejected.  Driving through the neighborhoods, these complexes stood out dramatically especially since they often abutted vacant lots where demolition had already occurred.  The worst block in East Cleveland was a street with four story, brick apartment complexes on both sides, all abandoned and blown out.  The developer is long gone, the owner long bankrupt through whatever shell had held these properties, so who and what can make this community whole.  Jim pointed out that the track, if cleared, would be an 18-acre development plot for something.

What does it take to get there?  A lot more than a hope and a prayer.  Similarly, commercial properties couldn’t be demolished with the money, and the same problem holds, perhaps even more clearly because these properties, having been about business and popular access, line the streets and corners of the neighborhoods, concealing in their blight the hidden treasures and opportunities behind them.

I’m still a rehab and rebuild guy first, and I’ll do my best to convince anyone and everyone, that the same kind of money that went into demolitions, needs to go into rehab and new construction of affordable housing for low-and-moderate income neighborhoods.  At the same time, we all have to admit, that both rehab and demo need to go hand and hand in a comprehensive program, even if rehab and construction should be in first place and destruction in second.

***

Please enjoy Willie Nelson’s Me and You.

Thanks to KABF.

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Discrimination is Running Rampant in Bank Lending

New Orleans        One of the toughest questions I got on my road tour of six countries was essentially, “how does it feel to have to keep fighting to hold on to every victory against constant opposition,” or in other words how do we do the work when every victory involves constant struggle.  My answer, most simply put, was that constant struggle is the nature of the work and relentless opposition to our demands, defines the necessity of building powerful, mass-based organizations.

At the same time the example I often gave was the significant accomplishment over thirty years from the 1977 to 2007 in home ownership in American by lower income families, African-Americans, and Latinos from the passage of the Community Reinvestment Act, joined aggressively by ACORN and many other community organizations, to the housing bubble crash at the leading edge of the Great Recession.  Now most of those home ownership gains have been erased in the last decade of foreclosures and the widening expanse of the credit desert.

It turns out there is even an uglier story underneath that disaster.  Reveal, the online publication of the Center for Investigative Reporting, picked up a task that used to be ACORN’s annual labor for thirty years through 2008 and examined 31 million mortgage records to understand current banking practices in making loans.  They found that the odds of African-Americans and Latinos being denied conventional mortgages compared to whites of equivalent income, loan size, and other factors were worse in sixty-one metropolitan areas.  The list of cities suffering that infamy included Atlanta, Denver, Philadelphia, St. Louis, and San Antonio.  African-Americans bore the worst brunt of discrimination in the South, unsurprisingly, in cities like Mobile, Alabama, Greenville, South Carolina, and Gainesville, Florida.  Latinos took the worst beating in Iowa City, Iowa.

The litany of discrimination by banks and heartbreak for families trying to build citizen wealth is relentless.  Blacks were turned down more often in 48 metro areas, while Latinos experienced the same in 25, Asian-Americans in nine, and native Americans in three.  Take a bet with me that these are areas where each group is significant in the overall population.  In Philly, African-Americans received ten times fewer loans than whites even though their numbers are about equal.  In Washington, D.C, all minority groups faced discrimination compared to whites, so welcome to the nation’s capital where banks discriminate across the board.

Banks have been hiding behind their errors, compounded with multi-billion-dollar settlements, for the last decade, just as they have hidden their discrimination behind the  confidentiality of credit scores, that often have the reliability of lie detector tests.

Can we count on the Federal Reserve to step up as the regulator here?  Not likely.  How about Congress, where campaign contributions are king?  Not likely.

As I answered in Brighton, struggle is constant, and this example is a reminder that the battle needs to be engaged again on the housing front with new tactics and new demands now that banks have reverted to newer and more subtle systems of discrimination.

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