The Inside Story of Predatory Land Contracts

New Orleans      A paper by Eric Seymour and Josh Akers in the Cities journal ranked the density of various forms of land contracts that have surged to the forefront in low income areas since the 2008 financial crisis.  This brilliant paper aligns with the work of the ACORN Home Savers Campaign’s findings in the field on the doors.

Seymour and Akers crunched the data correlating where such contracts, REO foreclosures, and race all converged in patterns that leave little room for debate about where predators were feasting with the help of Fannie Mae auctions and other fire sales in lower income, minority neighborhoods.  The highest concentrations were in the in the zone around Detroit from Toledo to Flint and Pontiac.  The second highest was between Cleveland and Youngstown.  Third, was Cincinnati and Dayton.  The fourth finally broke out of the upper Midwest with pockets in St. Louis and Kansas City, but the maps showed it was everywhere.  We had been on the doors in a majority of those cities and could see the faces behind the numbers as people opened their doors.

This is a story writ large over generations.  Reading contemporary memoirs, it is not surprising that if the writer was African-America and came from rough and tumble, hardscrabble beginnings, not infrequently contract home purchases were part of the tale, as much for the predation as their precariousness.

Although Charles Blow has never mentioned it in his New York Times columns, one of the many poignant stories in his memoir, Fire Shut Up in My Bones (2014) mentions that his mother packed he and his siblings up to flee an abusive situation when he was a child coming up in northern Louisiana.  Underlining how bad it was, he noted that she was leaving a house she had bought on a land contract when it only had one month to go before she would have gotten the title.  I wrote Blow begging him to write a column about this, but there was no response, which also says a lot as well.

A new book, The World According to Fannie Davis:  My Mother’s Life in the Detroit Numbers, by Bridget Davis is getting a lot of favorable attention.  Davis emphasizes how open her mother was about her business inside her home with her children, and how important it was that all of that be kept secret from the world.  In fact, the driving force for Davis telling her mother’s story is to honor her mother’s commitment and reveal the secret.  Reading the book, one discovers quickly that there was another secret that was equally important, personal, and precarious, like her mother’s illegal business, and that was the fact that they were on a month to month land contract.  In order to escape even more risks and even higher interest and payments, her mother had made a deal with someone she knew with better credit to absorb the land contract and paid him in cash every month.  Bridget Davis is clear it was predatory, and her childhood memories read like fresh scars as she writes about how much they loved the house and the neighborhood, and feared on a monthly basis that because of the land contract they could lose it all and everything they had put into it overnight with no recourse.

The story from the outside about what racial discrimination and exploitative real estate contracts have done to communities around the country is a picture of state-sanctioned evil, but the story from inside looking out from the children’s perspective that is now being told as part of lived experience is also tragic.

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Please enjoy Patty Griffin’s Where I come From. Thanks to KABF.

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Detroit Housing Crisis, Progress but a Long Way to Go

Detroit    The panel organized by the Detroit School at the University of Michigan – Dearborn had an ominous title: “Post Crisis Housing Markets and Housing Insecurity.”  In Detroit, not unlike so many other cities around the world now, when you couple “Post Crisis” and “Housing” in the same phrase you are definitely either very hopeful or asking for trouble.  The housing crisis in Detroit as been horrid for half-a-century at the least, so post-crisis referred to the 2008 national meltdown of course.

The crowd on a miserable winter night in Detroit, which is to say, a normal winter night in Detroit, was deeply informed and hugely engaged.  The panel was authoritative.  Christine Macdonald of The Detroit News and Allison Gross of the Free Press had both deeply reported on housing issues, were well versed and knew the players on all sides of the field.  Professor Josh Akers from UM-Dearborn and his colleague Eric Seymour, a PhD now at Brown, had deeply researched the housing market and the level of insecurity for families.  Both had been wildly helpful to the ACORN Home Savers Campaign in getting a handle on companies operating in the margins with sometimes questionable and often predatory products often contributing to housing insecurity.

Professor Akers, as the moderator, gave the background and the numbers of foreclosures, the impact of subprime lending, and the level of continued abandonment were unsettling, no matter how often I had heard them.  The reporters unpacked the impact of recent programs like the “right of first refusal” which allowed the city to pick up homes in foreclosure and potentially offer them back to families at real or current market value, rather than the pre-2008 recession levels.  They shared the problems they faced in keeping these stories flowing in the exhaustion of their editors, and perhaps the public, felt in facing this continual train wreck.  Eric Seymour filled in the gaps that both he and Akers had worked on to supply both reporters and ACORN with the raw data to fuel their reporting and our work.

As Greg Markus, a retired professor and key organizer with Detroit Action Commonwealth, pointed out in the question & answer after the panel, the twin crises of mortgage foreclosures from the banks and tax sales triggered by the government had deepened the crisis in Detroit.  He argued as well that the ACLU suit that upbraided the city for not allowing low income families to take advantage of the tax exemptions that has now slowed the auctions as well as the work being done by reporters, scholars, activists, and community organizations showed real progress moving forward.  Christine Macdonald nodded but pushed back that none of these things repaired the damage to families who had already lost and been ejected from their homes or the permanent scars it created in the neighborhoods.

It was an excellent conversation without real joy.  There is great work happening in Detroit, but too much of the effort for too many decades has been Sisyphisian with the rocks almost getting to the top of the hill, then pushed back down again.  I mentioned a memorandum I had stumbled on in the ACORN archives from 2003 from the Detroit ACORN office on a collaboration with the City and its financing to allow families to rehab houses and then waive taxes and purchase requirements.  Then the numbers of houses abandoned was 30,000.  Now, the land bank alone has perhaps 80,000.

This is where the fight has to be joined, but whether a model for the future that would assure housing stability can be found without a radical rethinking that puts families and not realty interests and developers first is still very much in doubt.

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