Homeowners in the Bronx and Brooklyn – mostly low- and moderate-income families – pay more of their income on housing than people anywhere else in the country. The two New York City boroughs topped the list of US counties ranked by the percentage of single-family homeowners spending at least 35 percent of their income on mortgage payments, taxes and fuel. Hudson County (NJ) , Miami-Dade County (FL) and Queens County (NY) were next on the list, beating out a half-dozen California counties that led the list in 1990. (New York Times, 12/10/02)
Baffled in Boston
Despite efforts by some lenders to boost homeownership among minorities, the mortgage denial rate for African-Americans in Boston is nearly triple that for white borrowers, according to a new study. “We are baffled, because we’ve put so much work into increasing loans to minorities,” said Thomas Kennedy, vice president at Sovereign Bank New England. “The disappointing numbers caused us to ask: Is there something institutionalized [among lenders] that causes a cultural bias?”
The study, “Changing Patterns: Mortgage Lending to Traditionally Underserved Borrowers & Neighborhoods, 1990-2001,” by the University of Massachusetts at Boston, was released by the Massachusetts Community & Banking Council, a collaboration of bank and community leaders who aim to encourage investment in low-income and minority neighborhoods.
A companion report, “Borrowing Trouble,” is an overview of subprime lending and its rapid growth in Boston over the last five years. The study finds that loans by subprime lenders make up a disproportionately large share of total refinance loans to black, Latino and lower-income borrowers and to neighborhoods with low incomes and high percentages of minority residents.
(Boston Globe 12/29/02; www.mahahome.org/documents/ChangingPatterns9.pdf and www.mahahome.org/borrowingtrouble.shtml)
According to HUD Secretary Mel Martinez, the agency’s proposed budget for fiscal year 2004 “reflects the realities of national defense and homeland security.” In other words, if you’re not a missile or warship, you’re out of luck.
But Sheila Crowley, president of the National Low Income Housing Coalition, points out that it’s the growing federal deficit fueled by the Bush tax cuts of 2001 that is shrinking federal resources for housing and other domestic needs. She notes that the proposed budget treats public housing especially harshly, with small increases that do not make up for the 30 percent cut that occurred in the current fiscal year in the wake of a $250 million “accounting error” decrease. The result is a net decrease of $259 million for modernization and revitalization, says Crowley. HUD would also restructure the housing voucher program, providing block grants to states and allowing governors greater discretion in how they use the funds. The HOPE VI program would be terminated. (www.nlihc.org )
Outraged – and Organized – in Camden
The Associated Press (AP) calls Camden, NJ “the main East Coast Laboratory for the environmental justice movement” in taking note of three large environmental lawsuits and a possible fourth in the works.
Although South Camden Citizens in Action failed to shut down the St. Lawrence Cement Company based on civil rights laws, it is pressing ahead with intentional discrimination and Fair Housing Claims. (See Shelterforce #126.) A second lawsuit charges the cement factory with lowering property values and creating a nuisance by routing noisy, diesel fuel–spewing trucks through the neighborhood; a third suit charges that the city knowingly sold contaminated water to residents and a fourth accuses the Camden Board of Education of not informing the public about lead in school water and neglecting to fix the problem.
Robert Bullard, director of the Environmental Justice Resource Center at Clark Atlanta University, notes that “Industry still has an upper hand. They don’t have to prove that they aren’t making people sick. The victims have to show it.”
The Blurry Line Between Church and State
Religious groups may soon be able to use federal housing money to build structures where religious services are held, as long as part of the building is also used for social services. For example, a church could erect a building using federal dollars for a homeless shelter in one part, then use private money to create a sanctuary in another part of the same building.
The government money can’t be used for the religious section, but critics say it will be difficult to keep the religious and social functions separate. One law professor said it might not be in the best interest of the religious group to do so, because the non-religious activities might throw into question their tax-exempt status. An analyst for the National Congress for Community Economic Development compared it to taking the sugar out of cupcakes: “The line can get blurred.”
HUD proposed the policy change in January and the public has until March 7 to comment before the agency makes it official. Federal housing and community development grants totaled more than $7 billion last year. (The New York Times, 1/23/03)
Making It Right
MAF Bancorp Inc. has pledged several actions to end a Justice Department fair-lending inquiry. The company was under investigation from 1996 to 2000. Under the pact with the Justice Department, MAF is to open or acquire two branches in minority communities in the next 30 months, implement a targeted advertising campaign to increase home lending, and provide $10 million in benefits to borrowers through special financing to help residents in minority communities buy homes. The company is also to contribute $500,000 to homebuyer education programs and assess home credit needs in minority areas. (www.americanbanker.com)