Although the rise in subprime lending and the ensuing wave of foreclosures was partly a result of market forces that have been well-identified in the literature, in the United States it was also a highly racialized process. We argue that residential segregation created a unique niche of poor minority clients who were differentially marketed risky subprime loans that were in great demand for use in mortgage-backed securities that could be sold on secondary markets. We test this argument by regressing foreclosure actions in the top 100 U.S. metropolitan areas on measures of black, Hispanic, and Asian segregation while controlling for a variety of housing market conditions, including average creditworthiness, the extent of coverage under the Community Reinvestment Act, the degree of zoning regulation, and the overall rate of subprime lending. We find that black residential dissimilarity and spatial isolation are powerful predictors of foreclosures across U.S. metropolitan areas. In order to isolate subprime lending as the causal mechanism whereby segregation influences foreclosures, we estimate a two-stage least squares model that confirms the causal effect of black segregation on the number and rate of foreclosures across metropolitan areas. In the United States segregation was an important contributing cause of the foreclosure crisis, along with overbuilding, risky lending practices, lax regulation, and the bursting of the housing price bubble.

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Racial Segregation and the American Foreclosure Crisis

This chapter presents the budget estimates and program justifications for the Department of Housing and Urban Development (HUD). HUD’s core mission is to promote adequate and affordable housing, economic opportunity and a suitable living environment free from discrimination. The 2001 Budget for HUD reflects the successful implementation of a multiyear comprehensive reform effort which has helped restore the effectiveness and financial integrity of the Department’s critical affordable housing and economic development initiatives. Building on the success of these reforms, Congress and the Administration have provided significant increases in key HUD programs over the past two years. The 2001 Budget will continue these historic successes by providing the Department with the tools to fulfill its fundamental strategic goals: increasing the availability of decent, safe and affordable housing in American communities (including the enhancement of homeownership opportunities, especially for minorities and first-time homebuyers, the transformation of public housing and the expansion of housing assistance to alleviate severe housing needs); ensuring equal housing opportunity; promoting self-sufficiency and asset development of families and individuals (including moving homeless families to self-sufficiency through locally-developed continuum of care strategies and contributing to the success of welfare-to-work efforts); and improving community quality of life and economic vitality through locally-driven initiatives and programs. The 2001 budget provides increases for two successful block grant programs which serve HUD’s fundamental affordable housing and economic development missions—the Community Development Block Grant (CDBG) and the HOME Investment Partnerships programs. These programs provide states and localities with formula funding pursuant to locally-developed consolidated plans for a wide variety of activities which benefit low and moderate-income families. The Community Development Loan Guarantee program (under Section 108 of the Housing and Community Development Act of 1974) will be continued with level funding and a slightly increased loan guarantee limitation. The Economic Development Initiative will also be maintained. Grants for Urban Empowerment Zones will continue support for ten-year plans to provide new job opportunities and community revitalization in 15 urban areas. The Rural Housing and Economic Development program will be continued at an increased level. HUD’s Homeless Assistance programs will be funded at an increased level to enable communities to continue their development and implementation of comprehensive coordinated continuum of care systems to address the needs of homeless people and families. This funding includes 18,000 rental assistance vouchers designed to provide affordable permanent housing for formerly homeless individuals and families in order to provide a stable living environment, a critical necessity for maintaining access to needed services and providing access to employment opportunities. HUD’s Continuum of Care approach recently received the prestigious 1999 Innovations in Government award from the Harvard University’s John F. Kennedy School of Government and the Ford Foundation. The 2001 Budget maintains the Federal commitment to replacing distressed and obsolete public housing with attractive, mixed-income communities and creating new economic opportunities for residents. Consistent with this commitment and with a special focus on replacing projects that have been determined to be non-viable, the HOPE VI program will receive a significant increase from last year’s enacted level. The 2001 Budget provides $3,192 million for the Public Housing Operating Fund, which helps to maintain good quality housing, and provides a slight increase for the Public Housing Capital Fund, which helps modernize and improve the housing stock. The 2001 budget includes 120,000 incremental vouchers that will help address the severe housing needs of low-income households. These vouchers are necessary to address the continued increase in the number of families nationwide which have worst case needs for housing assistance, including extremely-low income families currently paying more than half their income for rent or living in severely inadequate living conditions. The Administration reaffirms its long-held commitment to renew all expiring Section 8 contracts, to protect residents from displacement by substantially increasing funding for Section 8 renewals, to provide Section 8 tenant-based assistance for displaced families, and for the replacement of affordable housing due to opt-outs from the project-based Section 8 program. The Administration also continues its support for the Department’s successful Housing for Persons With HIV/AIDS program (HOPWA) by providing increased funding to prevent thousands of persons with HIV/AIDS from becoming homeless. This increase is necessary to continue to provide stable housing and services in existing local programs and fund new jurisdictions as they become eligible for formula funding due to the continued increase in the number of AIDS cases. Building on last year’s successful adoption of the Housing Security Plan for Older Americans, the Housing for the Elderly program (under Section 202 of the Housing Act of 1959) will receive a substantial increase, including an increase in capital funding to convert existing housing to assisted living with services and an increase for construction of new affordable assisted living. The Housing for Persons with Disabilities (under Section 811 of the National Affordable Housing Act of 1990) will receive additional funding. In support of the Administration’s strong commitment to increase homeownership opportunities, the 2001 budget includes major support to help lowand moderate-income American families become homebuyers. The budget will increase the Federal Housing Administration’s (FHA) maximum mortgage loan limits, allowing Single Family insurance to cover loans up to the same level as the Fannie Mae and Freddie Mac (GSEs) limits. (Currently FHA can insure home mortgages only up to 87 percent of the GSE limits in high cost areas and only up to 48 percent in low-cost areas, including approximately 2,200 rural counties throughout the Nation). In addition, the budget authorizes FHA to develop new adjustable rate mortgage products. These provisions will provide much-needed assistance to first-time homebuyers, minorities, and other underserved populations. Increased funding for the Fair Housing Assistance and Fair Housing Initiatives programs (FHAP and FHIP) will strengthen the ability of public and private fair housing groups, and partnerships between them, to enforce the laws protecting all Americans against illegal housing discrimination. In order to ensure the effective implementation of its programs, the Department’s Office of Policy Development and Research (PD&R) will be provided with a budget increase. These additional funds are necessary to ensure timely provision of data, research and analysis of national housing and economic conditions, and to measure the performance of pro-

The Department of Housing and Urban Development

Plot interpretation is an interesting topic because the ability to interpret plots is a measure of scientific literacy and because plots themselves can be informative. Tufte (1983) observes that the popular media in the U.S. considers the scatterplot beyond the common reader. Noting that some elementary school curricula include Cartesian plots, and even box and whisker plots, there is hope that the statistical literacy movement will eventually force a well-justified reassessment.

The Bureau of Labor Statistics.

The rapidly unfolding global economic recession is dramatically intensifying the contradictions around which urban social movements have been rallying, suddenly validating their claims regarding th...

https://courses.arch.ntua.gr/fsr/143998/cities%20for%20people%20not%20for%20profit.pdf

Cities for people, not for profit

The issue of “housing” has generally not been granted an important role in post-war political economy. Housing-as-policy has been the preserve of social policy analysis and of a growing field of housing studies; housing-as-market has been confined to mainstream economics. This paper insists that political-economic analysis can no longer remain relatively indifferent to the housing question since housing is implicated in the contemporary capitalist political economy in numerous critical, connected and very often contradictory ways. The paper conceptualizes this implication by identifying the multiple roles of housing when “capital” – the essential “stuff” of political economy – is considered from the perspective of each of its three primary, mutually constitutive guises: as process of circulation, as social relation and as ideology. Mobilizing these three optics to provide a critical overall picture of housing-in-political-economy (more than a political economy of housing), we draw on and weave tog...

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Centring Housing in Political Economy

Dan Immergluck Cornell University Press, Ithaca, NY, 2009 272 pages $2995 It is hard to imagine a more dramatic episode in mortgage credit markets than the collapse experienced in 2008 and 200

Foreclosed: High-Risk Lending, Deregulation, and the Undermining of America's Mortgage Market

Problem: Housing programs of the past have exacerbated the problems of concentrated poverty. Current housing programs serving very low-income households, including homebuyers as well as renters, should be examined to determine the extent to which they help households make entry into neighborhoods with low concentrations of poverty. Purpose: This research is designed to assist planners in understanding how well various approaches to resolving housing affordability problems can facilitate the poverty deconcentration process. Methods: Administrative data from the Department of Housing and Urban Development are used to assess the degree to which federal housing programs help lowincome homebuyers and renters locate in neighborhoods where less than 10% of the population is below poverty. Results and conclusions: Subsidizing households ought to be more effective than subsidizing housing units at helping lowincome households locate in low-poverty areas, and whether a household rents or buys should not matter to w...

Deconcentrating Poverty With Housing Programs

Problem: Federal housing policy is made up of disparate programs that a) promote homeownership; b) assist low-income renters’ access to good-quality, affordable housing; and c) enforce the Fair Housing Act by combating residential discrimination. Some of these programs are ineffective, others have drifted from their initial purpose, and none are well coordinated with each other. Purpose: We examine the trends, summarize the research evaluating the performance of these programs, and suggest steps to make them more effective and connected to each other. Methods: We review the history of housing policy and programs and empirical studies of program effectiveness to identify a set of best principles and practices. Results and conclusions: In the area of homeownership, we recommend that the federal government help the nation's housing markets quickly find bottom, privatize aspects of the secondary mortgage market, and move to eliminate the mortgage interest deduction and replace it with a 10-year homeownership ...

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Rethinking Federal Housing Policy

The Low‐Income Housing Tax Credit (LIHTC) program is now 20 years old. With the maturing of the program, the use of tax credits has become commonplace in the development of rental housing across the nation. This article examines how the program has changed both financially and spatially. Specifically, the article asks whether it provides a mechanism that can help deconcentrate impoverished renters by providing access to low‐poverty neighborhoods. This research finds that as the price for tax credits rises, the program becomes increasingly popular with developers who are helping it make inroads in low‐poverty suburbs. By entering the suburbs, the LIHTC program is meeting and even exceeding the performance of the Housing Choice Voucher Program in terms of offering opportunities to live in low‐poverty settings.

The low‐income housing tax credit program goes mainstream and moves to the suburbs

The Low‐Income Housing Tax Credit program has been operating for over 10 years and has helped finance thousands of developments with units set aside for low‐ or moderate‐income households. However, the program has been criticized for requiring additional layers of subsidy to leverage investment and for providing benefits to developers in excess of the amount necessary to induce them to invest. An analysis of a sample of developments from Missouri finds that the tax credits are syndicated, with virtually all of the syndication proceeds (about 33 percent of the financing) used to pay for development costs. Conventional lending provides another 44 percent of the financing. Unfortunately, because these sources do not cover all of the costs, developers enter into a complex, costly process of layering additional subsidies, one on top of another, to fully finance the development.

Kirk McClure

Papers

Foreclosed: High-Risk Lending, Deregulation, and the Undermining of America's Mortgage Market

Deconcentrating Poverty With Housing Programs

Rethinking Federal Housing Policy

The low‐income housing tax credit program goes mainstream and moves to the suburbs

The low‐income housing tax credit as an aid to housing finance: How well has it worked?