New Orleans Redlining continues to raise its ugly head in the legacy of broken urban neighborhoods in cities across the United States, despite having been mitigated in one way or another over the last fifty years. Classically, redlining was a de facto classification by the government, insurers, and political actors that mapped different urban neighborhoods, ostensibly by the quality of housing and risk of repayment, but more dramatically by income and race, blocking whole areas from accessible and affordable mortgages while reallocating deposits from those areas to others along with suburban expansion. ACORN was involved in the fights and struggles for reform that produced the Home Mortgage Disclosure Act (HMDA) and the Community Reinvestment Act (CRA), which have been variously seen as responsible for the huge expansion of homeownership in cities as well as by conservatives who have attempted to blame the 2007-8 housing meltdown on our CRA successes.
Talking to Josh Silver on Wade’s World about his book, Ending Redlining Through a Community-Centered Reform of the Community Reinvestment Act, he spoke of those early fights as the “first-generation” of CRA reformers, placing himself in a later period, as successive efforts were made to dilute or adapt CRA over more recent decades. Josh had been the researcher director for the National Community Reinvestment Coalition so he had been at close quarters with many of the contemporary legislative battles. His review of the almost 50 years of CRA experience strives for balance and positivity, but it’s hard to avoid the feeling that much of this is now a rearguard fight. He touts the benefits of the evolution of a more holistic set of community benefit agreements that are negotiated with banks now, rather than the CRA agreements I knew best between ACORN and the banks largely about expanding mortgages and income criteria. He’s not uncritical of the failure of CRA to deal with the issue of race while elevating class in the criteria. He’s also realistic about the limited national chances for real reform of CRA and argues that states should step in and could do better.
A recent look at Baltimore, where the impact of redlining was severe, measures the efforts to reverse the neglect it wrought. There the mayor has initiated a 15-year plan to rebuild the neighborhood. The article notes that “…the city has reduced the number of vacant houses to less than 13,000, from 16,000. It has spent $100 million over the past three years and together with the state will spend an additional $200 million over the next year….” The state and city have pledged $1.2 billion, but are still short another $3 billion.
As the mayor argues, it takes significant time and a lot of money to erase so many decades of neglect, while also trying to not cave into market-rate gentrification, displacing the existing population. Baltimore’s plans and any hope of constructive reform of CRA to meet the current needs becomes even more difficult under the current administration and its handling of HUD. The prospects of getting federal money to ameliorate redlining has also dimmed, likely for the next number of years.
Silver argues that CRA coverage was extended to certain internet lending banking operations in a slight reform, although many non-bank banks, like private equity, which have crept into mortgage lending are not required to meet CRA obligations. He makes the point that the assumption of data handling by the Consumer Finance Protection Bureau actually make the transactions that composed ACORN’s annual lending reports, much less transparent and require real skills to navigate.
It’s not perfect, but the Community Reinvestment Act still represents a highwater mark in the collective success of community organizations in the United States. It’s something to be proud of, warts and all.