By 2012, UFE predicts, African American neighborhoods could be drained of nearly $200 billion in housing losses alone. That’s close to the gross national product of some small nations.
One of the more provocative new studies, by Princeton researchers Jacob Rugh and Douglas S. Massey, suggests that a big reason black communities are being hit disproportionately hard is because they are . . . well, black communities.
That makes them easy targets for predatory lenders, the authors say. Blacks who have been underserved are going to be more desperate for a home–even ones they can’t afford.
“Simply put, the greater the degree of Hispanic and especially black segregation a metropolitan area exhibits, the higher the number and rate of foreclosures,” the authors say.
The solution? Spread out, black people; scatter, if you can. Maybe it’s better to rent in an integrated neighborhood, with good schools and more job opportunities, than to own in a black one where property values aren’t going to rise that much and may vanish altogether if your neighbor goes into foreclosure.
Obviously, many of us couldn’t see well enough to carefully read those fliers posted on utility poles advertising no-interest subprime mortgage loans. Black neighborhoods throughout the country were targeted like crazy, as Massey and Rugh note, with billboards, robocalls, door-to-door cold calls, handbills under the windshield wipers and more.
But somehow we missed the “fine print” on those balloon-loan papers-the itty-bitty type that said: gotcha, sucker. If you already have spectacles, invest in a magnifying glass.
Prince George’s, where I live, is the wealthiest predominately black county in the country and is reeling from the highest foreclosure rate in the state–and one of the highest in the nation.
A report by the Partnership for Renewal in Southern and Central Maryland last year found that nearly half of the county’s residents spend more than 30 percent of their income on housing, an amount considered unaffordable by the U.S. Department of Housing and Urban Development.
Prince George’s counted 45,300 troubled home loans, according to a report by the Urban Institute, and about 40 percent of renters cannot afford the median monthly rent of $1,131.