Crisis in Home Ownership for Working Families and Minorities

San Jose much for sale but few are being sold (Karl Mondon/Bay Area News Group)

Much for Sale in San Jose   (Karl Mondon/Bay Area News Group)

New Orleans   Something big is happening in housing. Maybe big and bad. Maybe big and unknown, but scary in its uncertainty for the future.

Here are the facts that frighten.

Home ownership dropped again in the last quarter of 2016 and when it did so, it fell below 63% to the lowest level in 50 years.

Mortgage loans to African-American families fell in the review period between 2004 and 2014 from 7% of total mortgages for blacks to only 5% of mortgages issued. Hispanic families budged up slightly from 7 to 8%, Asian families stayed at 5%, and mortgages to white families zoomed up from 58% to 69%.

This analysis of Home Mortgage Disclosure Act data was done by the National Association of Real Estate Brokers. They argue in their report that this drop has to do with a tightening of credit standards after the 2007 housing meltdown. Couple that information with another recent statistic that prices in the housing market now are only 2% lower than their historic highs achieved in 2006 before the bubble burst. For the real estate brokers, it is in their interest to have their cake and eat it, too. A return of high prices means happy days for them. Claiming the decrease in much of minority-based lending is based on a change of standards, rather than a clearer manifestation of discrimination is also squarely in their interest.

The Wall Street Journal reported that one of the reasons that minorities are getting a smaller share of loans is the return of the jumbo mortgages to “more affluent borrowers with loans exceeding $417,000.” Mumbo-jumbo. Report after report also indicates with this surge in pricing what used to be “jumbo,” is now just standard operating procedure. Average housing prices have now hit $1 million San Jose for example. Meanwhile other reports speak to housing and income growth in center cities around the country, including in areas like Detroit and Philadelphia and deterioration of income and housing prices and values in working class areas of cities, along with the paradox of millennials wanting to live downtown which is pushing the prices up now, while Pew Research surveys are also saying they are only committed to living downtown for five or ten years. What then?

Anyway we shake-and-bake these figures, it is hard to maintain a belief that that part of the American Dream that included home ownership is still alive. We can’t have both stagnant incomes and rising home prices with narrower lending parameters and believe that home ownership can increase among low-and-moderate income families. The conservative blame-game that tried to saddle the housing collapse not on Wall Street recklessness but on lax lending standards has mutated into a form of de facto national housing policy.

Does that mean there will be more affordability in the rental market? There’s no indication of any new trend there, and in fact market-rate construction for the millennials is still the driver. Meanwhile neither political candidate has a program around housing, much less affordable housing, and if values are falling in low-and-moderate income communities that are not on the gentrification list, that also means that citizen wealth will continue to drop like a rock.

Housing is now on the trajectory from problem to issue to crisis, and the silence around solutions is depressing and deafening.


Please enjoy East Coast Girl by Butch Walker. Thanks to KABF.


Milwaukee and Other Cities are Explosions Waiting to Happen

 An eviction in Milwaukee in December. Often, landlords turn to informal methods to get families to leave.Photograph by Philip Montgomery for The New Yorker

An eviction in Milwaukee in December. Often, landlords turn to informal methods to get families to leave. Photograph by Philip Montgomery for The New Yorker

New Orleans    For quite a while in these times of inequity and polarization around income, class, race, and so many other issues, there has seemed – at least to me – a fuse steadily and slowly burning towards an explosion in our cities. We are definitely seeing it now in Milwaukee, as the community rioted in destructive anger in reaction to a black policeman 24-years old killing a fleeing black man 23-years old, who was also armed.

The anger is erupting because it comes from an unrequited rage. Elements of the community are saying, essentially, “We don’t care about whether police say the killing was justified or not; the killing has to stop!” We can quibble and disagree about the facts, the tactics, and the collateral damage, but it is hard to argue that police occupation of lower income, largely minority communities is working to either stop crime or, even more importantly, to protect and secure the communities themselves or integrate them fully into the overall life of the city. People are drowning without lifelines or lifeboats in sight. No one could have read the book, Evicted¸ and its close, hard look at conditions in Milwaukee’s lower income neighborhoods around housing, which are little different than scores of other cities, without understanding that all of these situations are powder kegs waiting for matches.

But, as Milwaukee is demonstrating, to see the crisis as a simple matter of police-community relationships where strategy and tactics have gone terribly awry, is also a mistake. These issues and estrangements are bigger than that, and they are more comprehensive. The police are simply at the front of the line, but everyone else is still in the queue, equally responsible. There are few better examples that the surprise the press is finding in Milwaukee that they are also a target of protest and rage.

The police are the close-at-hand occupiers, while the press is now increasingly the far removed observers. As newspapers and other media outlets have drastically cut the staffing of their newsrooms in the technological crisis within their industry, the coverage of communities of class and color, which were never robust, are now even more drastically depleted. Any casual conversation with community organizers will quickly reveal how invisible the work has become and how increasingly shrouded their communities have become. Large protests and similar events go unreported. When covered, it’s often now a student intern or stringer or a photographer sent just to get a picture. We’re back in the 50’s again where the mainstream media largely depends on self-appointed or downtown-vetted community leaders rather than facts and forces on the ground, so who is surprised that when they show up in the community there’s something less than applause.

The New York Times quoted a community advocate in Milwaukee with a radio show saying, “Our stories get mixed.” At first I thought this might be a misquote and that he really said, “nixed,” but he was more likely saying that the stories suffer from too much two-handed coverage, where the voices of the community are muted and the issues, no matter how stark, are diluted.

Not to keep being the Cassandra here, but attention must be paid. As I keep arguing, for all the noise out there, this all seems like the fire this time, and there will be no excuse for policy makers, politicians, and other institutions, large and small, to act even remotely surprised when it breaks out everywhere.

Nothing is being done to solve these problems, so who would be surprised that people start expressing their anger in whatever ways are still available to them.


Please enjoy this version of The Midnight Special by Billy Bragg & Joe Henry. Thanks to KABF.


Class Conflict on the Creek?

one of the fishing buddies on the Creek

one of the fishing buddies on the Creek

Rock Creek, Montana   More is changing on the creek than the climate, it would seem. Having just finished Nancy Isenberg’s White Trash: The 400-Year Untold History of Class in America, I found her whispering in my ear as I tried to get my arms around the changing scene in this beautiful spot, where I’ve found so much peace in the past.

This is my seventh season on the creek, reading, fishing, writing, working, hiking, and visiting with family and friends. These have been special times that I associated with being a dozen miles off of paved road, off-the-grid, away from the rat race, and virtually in a parallel universe that rose and set with the sun and the rhythms of living with fish jumping, eagles and hawks soaring, deer running through camp, chipmunks bold and brassy, walking eye to eye with the occasional moose, and even new sign of bear. I had come to believe, even as jaded and cynical as I remain, that this was a place apart.

The son of a friend and comrade for decades commented to me as we leaned against my pickup that “gentrification is coming.” Visiting another friend who runs the local office of the National Wildlife Federation in Missoula, he commented that he had been around the area almost 40 years and remembered when people living up the creek were just seen as “white trash,” and now prices had skyrocketed along the paved road and were moving up the creek. Sure enough there were now For Sale signs posted all around the bridge gate. Last season we were surprised that a less-than-modern plywood cabin up the road was listed for over $120,000. Now it is just one of three houses for sale on our small island of sorts. Close by, a neighbor was trying to sell their place for $246,000.

Even here where we are planted, there have been improvements aplenty. In 2010 when the Silver Bullet arrived there was nothing but a shed and a tent pad. We were an upgrade. Now there are two tiny cabins and one two-story cabin, a washing area, a cooking area, art projects, talk of a well and a second outhouse, and at least at this moment still one tent pad and our Airstream. Even in the quiet, as we read in the trailer in the morning, we could hear someone passing by on the road repeating to someone else over and over that this whole property looked like a “Hooverville, a Hooverville, do you hear me?” Well, yes, I heard you. If this Shangri-La is now her idea of a “Hooverville,” what’s happening here, Mr. Jones, and does class have something to do with it?

This is Montana where the myth is that your land is your land and your business where you can do what you want, and privacy and respect is always warranted and expected. Much of this nose sniffing in the air and tongue wagging seems to have found a home to roost, focused on our trailer. Isenberg is brilliant in her book on trailers and we “trash” who embrace them. She sees them in the American “cultural imagination” as “a symbol of untethered freedom” on one hand and on the other as associated with “liberty’s dark side: deviant, dystopian wastelands set on the fringe of the metropolis.”

Isenberg dates much of this trailer antipathy to the war years when the sudden mobilization of available labor for production was magnetized into war centers without adequate housing and trailer parks in places like the shipyard of Pascagoula, Mississippi where 5000 were housed that way. Or she cites the building of a steel mill in Pennsylvania that provoked an outcry of fear that it would reduce “property values.” Isenberg writes, “The construction workers were deemed trash not because of their class background per se, but because they lived in trailers. It was their homes on wheels that carried the stigma.” Manufacturers tried to reduce the stigma by rebranding trailers as “bungalows-on-wheels” to erase how they were seen in the vestiges of the war years, but it never has quite taken.

Zoning restrictions and the fact that the FHA did not agree to insure mortgages on mobile homes until 1971, “proved difficult for the trailer to compete with the tract home.” Isenberg notes that by “the late fifties, more mobile homes were built than prefabricated homes, yet municipalities continued to look down on them,” including prohibiting them from many city limits. A jurist writing a dissent in a New Jersey case “exposed the dangerous implications of this decision: ‘Trailer dwellers’ had become a class of people, he explained, through which discrimination was tolerated under the vague language of protecting the ‘general welfare.’” She tells the story as well of a project to build a trailer park community in Yorba Linda, California, that was finally approved only after the developers “added one final touch: a five-foot high wall around the entire complex.” She goes on to report, “Another local resident, without any apparent shame, admitted, ‘we call them the ‘people inside the wall,’ and we’re ‘the people outside the wall.’” Finally, the historian in an editorial voice asks, “Was there any better symbol of an undisguised belief in class stratification than the construction of a wall?”

Where’s the space and place in America where class does not trump nature and the ability to live freely, even for only several weeks a year? I look forward to many more seasons on the Creek, but wonder if it becomes a matter of keeping up with all of these Joneses, whether I’m simply – and literally — outclassed and need to start looking for some other place to drop my line, read my books, write my words, and visit with friends and family?


the fishing buddy who actually brings in the fish


Is Squatting Back? No, It Never Stopped!

HomeSweetHome2New Orleans   There was a breathless article in the New York Times with a Las Vegas dateline purporting to have found something new under the sun, at least the desert sun, and the discovery was squatters. The sources attesting to the fact that the sky was falling and the horror of it all were, unsurprisingly, the police and neighbors.

The Vegas police began counting statistics several years ago of complaints being filed with the department alleging that there were squatters in the neighborhood. According to the report, “… there were more than 4,000 complaints last year, up 43 percent from 2014 and more than twice as many as in 2012.” Numerous neighbors were interviewed, particularly in high-end neighborhoods where squatters had taken over houses pushing the million dollar mark complete with swimming pools. Oh, my!

The one side of the story missing was of course any discussion from any of the actual so-called squatters. The police couched their side of the story in lurid tales of drug dens, counterfeiters, burglars, and the like. One story felt to be especially poignant was a confrontation with children of one family where a child produced a copy of a lease and the police wove a tale from the family of paying someone in cash monthly at a casino. The whine here was that it takes the police time to investigate whether the lease is valid and so forth and so on.

Where in the world are people imagining that families whose homes were foreclosed by the tens of thousands and even millions went? Is there a fairy tale somewhere that they all just got a U-Haul and moved happily ever after to affordable housing on the other side of town? Poppycock! The reporter also added in the story that squatting was also a common problem in places like Florida and Detroit. Who are we kidding? People have been squatting in houses in Detroit for decades for goodness sake.

They have also been squatting in the foreclosure “zone” of America in high numbers ever since the financial crisis and the housing meltdown. Five or six years ago in Phoenix, I stood with a couple in front of the house they thought they were renting and preparing to buy as they surveyed the block in a neighborhood of low-slung brick houses in the city. They pointed from house to house the ones that were vacant, the ones where families were living after the house had already been foreclosed, the ones where families were living waiting for foreclosure, the ones that new families were trying to occupy to buy, and the minority that tended to be older families that were stable. In their case they were later evicted after it turned out that the money they were paying to secure the house in lieu of a deposit was being collected by someone who was not in complete possession of the house. Where they squatters or just suckers desperate to believe a story perhaps too good to be true? Well, yes, in the eyes of the police maybe, but what were they really other than victims of a triple scam of sorts at the end of the line of multiple foreclosures.

What’s the beef here? Would these homes in Florida, Arizona, and Nevada and similar foreclosure zones be better off boarded, vacant, and deteriorating and duplicating too many abandoned areas in Detroit, Buffalo, Philly, and elsewhere? Or would they be better off with families trying to make them homes again? Are the cities of the South and Southwest going to learn a different lesson than the cities of the Midwest and Northeast? Vacant houses in sufficient number will be vandalized. There’s a guarantee that comes with those homes.

There’s nothing new about squatting and scams, but there would be something new with public policy that matched houses that need people with people that need houses. Learning that lesson would be big news everywhere!


Affordable Housing Versus Any Housing at All


New Orleans    There’s starting to be an emerging pressure confronting housing activists and organizations, or so it seems: the fight between affordable housing versus any housing at all. The fight is particularly pronounced in the “executive” cities where most people can no longer afford to live, like New York, London, San Francisco, Vancouver, and the rest, but it also is being waged neighborhood to neighborhood under pressure of gentrification.

A recent article in The New York Times featured a self-proclaimed anarchistic, contrarian voice from San Francisco called BARF, the Bay Area Renters’ Federation. Yes, they thought the name was funny. These activists, what can you say? Essentially, they had adopted a position in the desperation of the situation in San Francisco that was essentially “anything goes,” as long as it means more housing, affordable, luxury, whatever. Longstanding tenant organizations in San Francisco called BARF, the “Tea Party” of housing groups in the city, which pretty much defines a “how low can you go” put down.

There may be worse though, and I stumbled on these notions reading a column in The Economist reporting some of the bright ideas that economists have. This is The Economist though so don’t be surprised that the argument starts from a position, similar to BARF, that development is good, and even alleges that everybody loves development, the problem is that no one wants it where they live, they want it somewhere else in the city.

Nonetheless, the ideas were, to say the least, novel. One was a straight “pay to play” proposition. Developers wanting to build in a particular area where they might counter community opposition would offer to pay neighbors in the area in cash money for the inconvenience and upset they had about the development. The exchange there was almost the equivalent of paying for “mental anguish” or some such. Taking it a logical next step though, neighbors willing to have their silence or support bought could also try to trade their position for whatever they believed the loss of value in their property might be.

In some ways this proposal isn’t so novel. Forever big developments in rural areas have bought out landowners wholesale to split communities. Developers reportedly buy out tenants in cities where they have protected leases in order to redevelop buildings in “executive” cities now, so what may seem on its face absurd, actually may be a more common practice than we realize. Many so-called neighborhood associations are so dominated by local real estate interests and individuals that it can be hard not to see them already as developer lapdogs. And, of course, when politics and money mix, this kind of business is also routine. The Mayor of New Orleans in a pique over a competing developers complaint that another developer won a bid to deal with a city building, is trying to get legislation through the state that would force any litigator in the future to have to put up a bond for the lost revenue, etc, etc, etc. You get the picture.

Another unique proposal offered was a sort of community “blackmail.” If a neighborhood fought a development in their area, essentially an ordinance or statute would require them to support a development elsewhere in the city of equivalent value and impact. The premise behind the proposition is, once again, that all development is good and beneficial, any opposition is narrow and selfish, so if you protest, you eventually pay the piper and have to saddle up to screw another community elsewhere in the city. Either way, the one thing that is certain is that the development gets built.

We might think some of these proposals are just ridiculous, but doing so is at some peril. Take a quick look at the political contributions in virtually any city for the municipal officeholders, and usually you will see the who’s who of all the local and many national developers lining up with cash, usually for candidates on both sides in the election so that they have markers down on all the candidates, as well as of course the eventual winner.


Has Community Reinvestment Become the Ghetto of the Banking Industry?

12.12.12-HousesNew Orleans   Since the financial crisis many of us who believe in decent and affordable housing have spent time making sure the Community Reinvestment Act (CRA) didn’t become the goat for the financial meltdown and banking scandals. And, don’t get me wrong, that’s important!

In a 2015 Federal Reserve study the conclusion was clear: CRA was blameless. Only 6% of loans by banks in CRA-qualified census tracks would have qualified as high risk. The repayment rate for CRA-based loans was equal or better than other loans in banking portfolios.

Nonetheless recently I finally felt like I might have stumbled on a disturbing pattern when I started thinking about the array of CRA officers populating various banks and I then started to worry that there might be another side to the CRA story that needs attention, and that’s whether or not it has become a banking ghetto populated more by politicians and promises than real efforts to move families into housing and desperately needed resources and loans into lower income communities.

For example, the National Community Reinvestment Coalition claims that approximately $4 trillion in CRA commitments was promised between 1997 and 2005. And, that’s good news and ACORN’s experience was that much of it was delivered on our agreements, as I detailed in my 2009 book, Citizen Wealth. On the other hand the word “promised,” when it comes to minority lending and lower income communities always makes you wonder. The Federal Reserve report for example quoted testimony given by JPMorgan Chase to the Financial Crisis Inquiry Commission that “less than one-fourth of the loans pledged in the largest-ever CRA commitment ($800 billion by JPMorgan Chase) were to the lower-income borrowers and neighborhoods targeted by the CRA.” When forced to fess up, Chase essentially was admitting that their pledge was a scam. They also quoted a “Citigroup managing director… that most CRA commitments ‘would have been fulfilled in the normal course of business.’” Having dealt with Citigroup for years, that’s simply a lie. Nonetheless, it’s worrisome that these big hitters in the CRA lending world are essentially saying they were playing all of us for fools. Admittedly, they were also trying to save their skins before the Commission, but I’m afraid the truth may also have been slipping out.

And, then there’s a pattern I started to wonder about when thinking about the CRA officers we run into from bank to bank these days. There’s a high incidence of what seem to be political appointees rather than real bankers who might be able to move money rather than simply bring calm to stormy seas. On the local scene just to think about a random selection, there were several current African-American legislators still in office, a relative of a former Mayor, and a social friend of the CEO…are you starting to see the picture? Nationally, I remember dealing with an African-American former mayor of Minneapolis and the scion of a long standing black political powerhouse family from Buffalo.

Maybe we need some solid research of our own on whether or not big and little banking is really committed to CRA objectives and non-discriminatory lending in minority and lower income communities, or whether or not we’re being played by politicians in banker’s suits making promises while continuing to grip the money with an ever tightening fist?