Tuesday, May 24, 2016

The Race Tax Part II - The Property Value Myth

This story is a tale of two cities...but in reality, it is one of two worlds.  One white, the other non-white.

It is a story that I have often thought about, but just never took the time to pen and then I stumble upon an article that splendidly captures the essence of something that I learned some time ago.

That "something" being that when it comes to housing and real estate, specifically where non-white ("black") peoples are concerned, there are no such thing as "property values"...there only exists "people values"...

The equation goes: equal (or better) real estate property + black inhabitants = worth-less.

Take that to the bank....literally... because property values as generally understood is mostly fiction.

Truth: Property "value" = white people.

This is a logical deduction.

Recall, "It wasn't African-Americans moving in that caused home values to go down....it was whites leaving."

The thing is, I didn't need to read any book or newspaper article, or ever see the documentary to arrive at this equation.

I've lived it first-hand, and observed it occur over and over again and in today's data and information driven  environment, anyone can see it themselves using any number of online real estate search tools.

Excluding some statistical outlier such as "The Hamptons",  without knowing much about the demographic makeup of any given neighborhood, one look at the "property values" tells almost the entire story.

Property. Value. Positive. Equity. Equals White People.

Eric Spann (copyright 2016)

The headline caption from a recent Washington Post investigation summarizes it:

‘This can’t happen by accident.’

For generations, African Americans have faced unique barriers to owning a home — and enjoying the wealth it brings. In Atlanta, where predominantly black neighborhoods are still waiting for the recovery, the link between race and real estate fortune is stark.

select excerpts
"When the new subdivisions were rising everywhere here in the 1990s and early 2000s, with hundreds and hundreds of fine homes on one-acre lots carved out of the Georgia forest, the price divide between this part of De­Kalb County and the northern part wasn’t so vast.
Now, a house that looks otherwise identical in South DeKalb, on the edge of Atlanta, might sell for half what it would in North DeKalb. The difference has widened over the years of the housing boom, bust and recovery, and Wayne Early can’t explain it.
Across metropolitan Atlanta, nearly 9 in 10 largely black Zip codes still have home values below that point 12 years ago.
And in South DeKalb, the collapse has been even worse. In some Zip codes, home values are still 25 percent below what they were then. Families here, who’ve lost their wealth and had their life plans scrambled, see neighborhoods in the very same county — mostly white neighborhoods — thriving.
 These disparities, though, are not simply about income ...The disparities exist in places, like neighborhoods in South DeKalb County, where black families make six-figure incomes.
“It just does not make sense...You’ve got doctors, lawyers, teachers, all kinds of professional people, retired military like myself, who’ve done everything right — everything right — and it never seems to work out in our favor,” 
Even well-off African Americans, like the ones in some South DeKalb subdivisions, were more likely to be given subprime loans when they should have qualified for better ones. Nationwide, black families earning around $230,000 a year...were more likely..to be given a subprime loan than white families making about $32,000.
The problem, Faber argued, wasn’t that professional blacks didn’t understand that they qualified for better loans; they were targeted for bad loans. Subprime lenders viewed them... as particularly profitable targets.
Dan Immergluck, a professor at Georgia Tech, suggests that the area’s problems are a result of “cumulative causation” — all of these forces building upon each other.
Throughout the South and in metropolitan Atlanta in particular, places with lingering negative equity are in predominantly black Zip codes when...controlled for income levels and measures of housing quality, race still mattered...controlled for the severity of the earlier subprime and foreclosure crises, race still mattered....[and] when added controls for how far prices tumbled during the bust, [Raymond] got the most surprising result: Race mattered even more.
You think the longer you stay in the home, the closer you are to paying it off, and the value goes up,” she says. “I had no idea I would be in the predicament I’m in....

Source: The Washington Post
 end excerpts

A compensatory note about the term/idea used in the above news story:  “cumulative causation”. Variations of this same theme are often deployed during discussions of race and racism to promote confusion and to distract the focus from what one is directly staring at. I do not suggest that this is the intent or purpose of the above professor, but the idea is used so often one becomes very suspicious anytime it is used. Once one begins to unpack the idea of "cumulative causation", one is left believing the myth that both everyone and yet no one is to blame. No one to blame, so nothing can be done nor will ever be done....

Sunday, May 8, 2016

The Race Tax Part I: Real Estate Property Values

Circa 2002.

I sat and watched TV in my small, one-bedroom apartment. Specifically the local PBS channel because I had no cable subscription. Fresh out of college, with student loan bills due, cable was a luxury that I had few resources to afford. There I sat and a documentary is airing. At that moment, I didn't know the show's title, but the subject matter coupled with the haunting piano soundtrack commanded my attention. I would later learn that I was in fact watching episode The House We Live In of the documentary Race - The Power of an Illusion. If you haven't seen it, I would recommend you watch the free excerpt here.

Until that day, like many I suppose, I only understood that "something" wasn't quite right.

I couldn't fully articulate it, but just knew that being classified as "white" truly meant something wholly different than being classified as "non-white". And then the documentary nailed it:
NARRATOR: ...underwriters warned that the presence of even one or two non-white families could undermine real estate values in the new suburbs. These government guidelines were widely adopted by private industry. Race had long played a role in local real estate practices. Starting in the 1930's, government officials institutionalized a national appraisal system, where race was as much a factor in real estate assessment as the condition of the property. Using this scheme, federal investigators evaluated 239 cities across the country for financial risk.
OLIVER: So that those communities that were all white, suburban and far away from minority areas, uh, they received the highest rating. And that was the color green. Those communities that were all minority or in the process of changing, they got the lowest rating and the color red. They were "redlined." As a consequence, most of the mortgages went to suburbanizing America, and it suburbanized it racially. 
Me: And in that instance, many lingering illusions that I had were shattered.

The episode continues:

JACOBSON: The racial logic adopts the principle that an integrated neighborhood is a bad risk, is a financial risk. That an integrated neighborhood is likely to be an unstable neighborhood. Uh, unstable socially, but therefore also unstable economically. 

NARRATOR: When the white residents of Eight Mile Road in Detroit were told they were too close to a Black neighborhood to qualify for a positive FHA rating, they built this six foot wall between themselves and their Black neighbors. Once the wall went up, mortgages on the white properties were approved. Between 1934 and 1962, the federal government underwrote 120 billion dollars in new housing. Less than 2% went to non-whites
 And more:

NARRATOR: In 1966, the Frisbys moved from Queens to suburban Roosevelt, only a few miles from Levittown. Like the Frisbys, many non-white families would discover the economic value of race in the real estate market. They watched as their homes and neighborhoods in suburbia declined precisely because they had moved into them.
FRISBY: When I moved into a neighborhood, I thought it would stay intact the way it was. On the street that I moved on when I moved there, it was predominantly white. Within two years, it was predominantly Black. 
 NARRATOR: It was called "block-busting." Real estate agents preyed on the racial fears of white homeowners to get them to sell their homes quickly, for less than market value. The homes were resold to non-whites at inflated prices.
And alas:

NARRATOR: It wasn't African Americans moving in that caused housing values to go down.... it was whites leaving.  

Full Episode Transcript here.

 ...to be continued.

 Eric Spann (Copyright 2016)

Saturday, May 7, 2016

Truth and An Innocent Question

Amazing the path that the search for truth will take you.

In a compensatory fashion, the word "truth" as used here means: that, which is.

So in searching for that which is, I submitted an innocent question....by email..to the pastor:

"Almost every Sunday you tell us that once we are saved, we are always saved...but the visiting pastor today completely contradicted you by saying that we can in fact lose our salvation....this is confusing to me...which is it?"
The response, sent not by the pastor, but by an associate pastor (on behalf of the pastor) - paraphrasing;

"Scholars more erudite than yourself and I have debated this very question and few can agree with certainty on the exact answer."
Umm, Ok.

Now even more confused, I would set out to find the answer on my own. After all, the ultimate point of the Sunday "habit" is to avoid eternal damnation...isn't it?? And to avoid this terribly eternal fate, one needs some very certain information on how to stay on the "safe" side....

In time, the pastor's response to my innocent question would eventually culminate and confirm, for me, (at least) two things:

1) it is true that among Christians, often within the very same denomination, church, household, and/or individual, there truly is no agreement nor certainty on the salvation question and,

2) pastors (and pastor's associates) are simply winging it....

Eric Spann (copyright 2016)