Street Level Provides a Different View of Atlanta Gentrification

houses across the street in SW, one an abandoned Vision Property Management home, the other a newly gentrified home

Atlanta   Visiting families involved with contract for deed agreements with big companies like Harbour Portfolio Advisers, Vision Property Management, and SG Capital in Atlanta turns out to be a much, much different experience than similar doors I’ve hit in recent months in Pittsburgh, Akron, Youngstown, and Detroit. The song is still basically the same, but the verses are different.

Yes, the contracts are “as is” with the burden of repairs, taxes, insurance, and everything else in the usual package on the buyer without any of the guarantees or protections of conventional home buying, but in Atlanta at least the “as is” is more than we have found elsewhere. There were roofs to fix, some with trees still protruding through, and sewer lines to wrangle and HVAC problems common in the South, but fewer homes where families were “camping” in homes stripped bare of wiring, plumbing and the works. In the outer reaches of Fulton County, my team had visited with families with home prices in the $20s and low $30s, but in southwest Atlanta where I spent most of my time yesterday the numbers tended to be high $30s and up to $50 and $60,000. Other teams in DeKalb and Clayton County were spread out with a wide range of prices.

barb wire protecting a vision house

Southwest Atlanta was a surprise to me. I’d been on the doors in Atlanta before, but when I started adding up the dates as I navigated BatchGeo from home to home on my visit list, it had been in the twenty to twenty-five year range. I used to tease people in New Orleans who moved to the suburbs of Jefferson Parish that if they were going to do that, they might as well live in Atlanta. On the doors though I found myself in the city, not 8 miles from the Capitol, in hills green with trees and huge quarter-acre home lots, where I sometimes thought I was in the country. I also found blocks where five or six houses might be abandoned, boarded, and collapsing, and a couple of blocks over areas that were knocking on the door and opening it to gentrification. For the first time I was talking to contract buyers who were debating whether or not to try and figure out a way to sell their houses after the four or five years they had been in Vision or Harbour properties because appraisals had doubled and tripled the valuations, and in the words of one, he might be able to do better farther out in the country.

a Harbour house

In one area, I was within walking distance of a MARTA stop, the Belt Line, a huge urban renewal project on an old rail line, and a big park. One Vision house I hit was abandoned across the street from a home so recently redone that the squares of newly laid lawn were still visible from the planting. Dumpsters were dotted here and there.

I hit one Vision property on my list that looked abandoned on its hillside double lot. As I was parking a man was opening a padlock on the door, but he turned out not to be the owner. He was a burgeoning landlord who had just closed on the house. He had bought it from New Western Investment which had bought a package of homes from Vision. He was originally from Rwanda but in the country for many decades and had just gone into real estate full time over the last year with 20 properties now. His plan was fix and flip. He pointed down the hill to the neighborhood I had just left, as already having gone past the tipping point of his price range from gentrification pressure, but he was betting on this area to be next.

The census track says this area is 89% African-American and has stayed that way even as home evaluations have leaped forward by several factors in recent years. I was navigating streets named after Martin Luther King, Jr. and Ralph Abernathy, the Atlanta-based SCLC civil rights icons.

No matter what the color, the gentrification class is the same. Families our teams were seeing in the far reaches of Fulton, DeKalb, and Clayton had roots on the blocks I was walking now, but the time even under a rent-to-own contract that they could imagine owning a house here was fading fast.

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Banks Creating Housing Squeeze Even More than Gentrification

atlantic yards before construction
Atlantic yards before construction

New Orleans   It seems like it has taken forever, but the first units of affordable housing as part of the victorious, but controversial, agreement negotiated between ACORN and Forest City Ratner to be built as part of the Atlantic Yards project, are finally coming to fruition, better late than never, thanks to the 2007-8 housing financing meltdown.

DNA Info reported:

Applications are now open for the first units of affordable housing at the Atlantic Yards Pacific Park complex. The modular tower built by Forest City Ratner Companies is the first building in the 22-acre Pacific Park development (formerly Atlantic Yards to join the city-run affordable housing lottery. The Dean Street property will contain half market-rate apartments and half affordable housing; the tower has 363 units in total.

Rents … will range from $559 per month for a studio at the lowest income requirement bracket ($20,675 to $25,400 per year for one person) to $3,012 per month for a two-bedroom at the highest income bracket (between $104,915 and $144,960 per year, depending on household size), the lottery requirements said.

As the country-and-western song goes, “that’s something to be proud of…,” but the larger issue continues to be in New York and most other cities in the US and around the world how unaffordable housing is. Ironically, as much as the delay at Atlantic Yards had to do with the meltdown in bank lending because of the housing bubble, banks are still at the heart of unaffordability.It’s not /just /gentrification, in fact, the gentrifiers are as much an effect caused by banks as they are a trigger for rising prices.

Stuart Melvin, ACORN’s head organizer in the United Kingdom, shared a piece from the New Economics Foundation with me several months ago.They noted that:

 

In advanced economies, banks’ main activity is now domestic mortgage lending. A recent study of credit in 17 countries found that the share of mortgage loans in banks’ total lending portfolios has roughly doubled over the course of the past century –from about 30% in 1900 to about 60% today.

 

This is how banks are making money everywhere, rather than through direct lending to consumers or businesses, partially because the land is a solid asset serving as collateral, meaning they can foreclose.  Where the land is scarce as it is in New York, London, San Francisco, and, well, lots of big cities, this makes each parcel more valuable and the next thing you know on the rollup, houses are costing nine times average  annual income throughout England and twenty times annual income in southeast England for example and that’s true for many other cities as well.

All of which squeezes housing developers even more, especially if they are not heavily subsidized by the government, when it comes to providing decent and affordable housing. The same level of bank profits cannot be gained compared to mortgages, so prices balloon, and the available customers who can handle the weight become smaller, and richer, until the whole bubble bursts again.

We countered this in New York through land trusts or mutual housing arrangements, but that is only partially successful. The scale of the issue is too large. Other countries and communities have tried land banks or public corporations.Unless we change our public policy around housing though this is a problem accelerating once again until it crashes against the wall, and in the meantime, low and moderate income families find themselves left with fewer and fewer affordable opportunities for decent housing.

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