Fewer Mortgages for Minority Communities
Brooklyn mortgages dropped 18 percent in 2007, reports the Daily News, in line with the city’s statistics. But it turns out the number of mortgages was chopped in half, or more, in poorer, minority neighborhoods, which are bearing the brunt of the foreclosure crisis — they call it the “tale of two Brooklyns.” “The number…
Brooklyn mortgages dropped 18 percent in 2007, reports the Daily News, in line with the city’s statistics. But it turns out the number of mortgages was chopped in half, or more, in poorer, minority neighborhoods, which are bearing the brunt of the foreclosure crisis — they call it the “tale of two Brooklyns.” “The number of mortgages issued fell by 60% in Brownsville, 58% in Bushwick, 57% in East New York and 45% in East Flatbush,” they write. “Experts say the declines are due to a combination of the drying up of the subprime market and lending discrimination by banks reluctant to make loans — even to qualified buyers — in those neighborhoods.” Now for the other Brooklyn: the number of mortgages rose 48 percent in Brooklyn Heights and Fort Greene; 11 percent in Williamsburg and Greenpoint; and stayed the same in the Slope.
Mortgages Plunge by 50% in Some Minority Neighborhoods [NY Daily News]
Photo by Jimmy Legs.
OK… you’re right dittoburg. There will still be some horribly unmaintained properties that will act as the barracks for the New Utopia workers. Didn’t think of that. That works out quite well. Hopefully there is a subsidized cafeteria (a “Worker’s Kitchen”) in proximity to each of the rent stabilized properties.
In Edwardian times this housing was simply included in your wage and you lived downstairs. That would probably be a simpler solution. The New Utopia citizen would probably want to keep its gov’t fairly lean so they don’t have to give up their income to the tax man. A big gov’t program trying enforce rental rules is a big unnecessary burden if the free market could just take care of it. I mean, homes don’t scrub themselves!! 🙂
tybur – did you hear about rent stabilization?
It’ll be fun. All of the properties in NYC will be converted into 2000-3000 sq ft units. Then the 5 boroughs will have a population of 1.5 million with a median income of $700k.
Traffic will be pleasant. The subways could probably be upholstered in leatherette. Will probably have to home school their kids or have classes taught by teachers being teleconferenced in from the suburbs of Pittsburgh, but everything has sacrifices.
It’ll be like Oz! (the Emerald City version, not HBO)
Fort Greene, sorry
Tybur6 – your 250K couple with two kids already can’t afford Park Slope. And they ain’t getting a house in Fort green either unless they’ve got a huge downpayment. Its only the rich that can afford Park Slope ….
in addition to redlining being patently ridiculous from an economic perspective, it’s also patently illegal. i’m not involved in the process, so i can’t answer dittoburg’s more practical question.
So… Xander Crews… to add to my post above.
While I don’t condone taking on debt that you cannot afford, isn’t there something to be said about the price tags themselves?
Here’s a pretty reasonable thought process… I live in a neighborhood; I’m part of this neighborhood. I am stable and earning a “decent wage” to support my family; I should be able to own a tiny piece of this neighborhood.
But the properties in this hypothetical neighborhood have just gone from $275k to $600k in 4 years. The former was affordable, the latter is far from it. BUT, the person I described above is stuck with… “Hey, I’m financially stable and the measure of success is owning my home.” So he buys the $600k home in order to own a sliver of the neighborhood he calls home.
I’m not saying he should have bought it, nor should the lender have approved the loan. BUT, the thought process is not unreasonable. It is the price tag.
Who will be the owners and residents of Bed-Stuy, East New York, Brownsville and Bushwick? If the prices remain unsustainably hyperinflated, then folks making $250k or more per year will be told… sorry, you can’t afford Park Slope and Fort Greene, you must live in a “fringe” neighborhood.
Funny, right? Rich folks being forced to live in the undesirable areas of brooklyn?! Luckily everyone making less than them will have been forced out to far-flung places… perhaps they can create a utopia. (Of course, it’ll be a challenge to pay baristas, dress shop clerks, postal workers and teachers $150,000+ so they can live locally… but I’m sure they’ll figure it out.)
I’m not suggesting a socialist plan where there are no “good neighborhood” or “bad neighborhoods.” Obviously, if you make more money you can live in a nicer place. I support this. But it’s painfully obvious that there are medium-term consequences to unbridled free market activities. Again, not suggesting gov’t regulation here… common sense by the folks that are involved in the real estate business! (But self-interest abounds here – so they will be long retired and enriched by the time the Bronx is burning again)
Thats why I’m hoping someone actually involved in the process can chime in.
Well, dittoburg, since redlining is in fact, a process of turning down any loan application from a certain neighborhood, address or zipcode, I bet there are plenty of statistics to go with it. It’s patently ridiculous to assert that NOBODY in a certain zipcode is eligible for a loan, that goes against all statistical reasoning or common sense, especially in today’s world.
I’m also sure it’s done with charts and tables, and sad faces from loan officers, many of whom share the race or ethnicity of the borrowers. It all comes from upstairs, nothing personal, you know?