Minority Disinvestment

Mikaela says:
Not that this should be news to any of us, but this from today's Washington Post:

Minorities Often Pay More for Mortgages

Blacks and Hispanics are getting a disproportionate share of high-cost mortgages compared with whites, according to new federal figures released yesterday.

The analysis of 2004 home-lending data shows that even after adjusting for factors such as income level, loan size and property location that could raise the interest rate offered on a mortgage, blacks are still nearly twice as likely as whites to be given a high-cost loan.

This is more clear evidence that structural racism is alive and well, not just in the ravaged inner city but throughout residential areas across America.

Arnold Hirsch, in his incredible book The Making the Second Ghetto: Race and Housing in Chicago 1940-1960, showed how real estate brokers, insurance companies, mortgage companies, and the FHA (Federal Housing Administration) colluded to red-line and/or gentrify neighborhoods based on where they could make the most money and how they could take advantage of racist attitudes toward black and latino immigrants. Disinvestment in the core was part and parcel with white flight to the suburbs.

Now that urban revitalization has been tied to mixed use development in a vibrant downtown core, re-investment at the center has already begun to push out minority residents who have made these neighborhoods their homes for the last fifty years. Reinvestment is a double bonus for gentrifiers because the housing stock is still from the early 1900s -- quaint and solid but in disrepair and therefore cheap.

Minority residents were unable to get loans for maintenance or renovations, so now white folks get gorgeous housing in prime locations for a steal. And they get plenty of help from banks who fall all over themselves handing out loans to reinvest in the very neighborhoods they themselves redlined when minority percentages reached a "dangerous" level -- usually only about 15% of the population in any given area. They can buy houses cheap, fix them up, and sell for a tidy profit to all those white buyers who want funky-cool living and feel pretty damn self-righteous that they're living sustainably and not at the urban fringe (as lower-income residents pushed out of inner-city neighborhoods suddenly have to do to find affordable housing -- Westside Albuquerque, anyone???).

Why should we care?

1. This kind of structural racism helps to explain why conditions are so bad for minority populations in urban areas that goes beyond the puerile admonishions that they wouldn't be where they are if they could stop having babies as teenagers and get married.
2. This analysis allows us to see the racism that's buried in the heart of our capitalist structure in order to seek reforms (even if they're capitalist ones)
3. We need to understand what minority homeowners, the bastion of middle-class status, are up against in urban and suburban areas, especially as we start to rebuild communities in the Mississippi Delta. It must NOT be okay that white families have no problem getting loans to rebuild their houses (because they're in good neighborhoods and worth the "risk" to banks) while black families can either only get high interest rate loans that soak them of thousands of dollars a year or can't get loans at all, forcing them to enter the cycle of renting, where they are at the mercy of racist markets and landlords to boot.