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A new view of gentrification

For researchers studying urban issues such as gentrification, one of the largest challenges is collecting detailed visual evidence across hundreds of square miles of city streets.

Just ask Robert Sampson, the Henry Ford II Professor of the Social Sciences. In the mid-1990s his research team carried off an effort to videotape more than 23,000 street segments in Chicago. The project was so intensive, he thought it would never be repeated.

As it turns out, there’s now an app for that.

Rather than travel to Chicago for an exhaustive study of gentrification in certain neighborhoods, Sampson and doctoral student Jackelyn Hwang used Google Street View to scour thousands of streets for signs of gentrification. Their findings were stark. After controlling for a host of other factors, they found that neighborhoods an earlier study had identified as showing early signs of gentrification continued the process only if they were at least 35 percent white. In neighborhoods that were 40 percent or more black, the process slowed or stopped altogether. Their study is described in an August paper in the American Sociological Review.

“This is really a sobering finding,” Hwang, the paper’s lead author, said. “Even in neighborhoods that are showing change, even when we control for things like crime, perception of disorder, and proximity to amenities, race still matters.”

Sampson said the key finding “is that the predominantly black, seriously discriminated-against neighborhoods in Chicago and many other American cities aren’t reaping the same benefits from the transformation of cities. In one sense, this is a paradoxical result, because there is evidence that diversity and mixed neighborhoods are the ground floor of gentrification, but this paper shows there are sharp limits to that.”

Though gentrification is most often associated with the phenomenon of white, middle- or upper-class residents moving into once-disenfranchised neighborhoods, Hwang and Sampson expanded their investigation to include investments from the public and business sectors.

“Reinvestment can come from the people that live there, but it can also come from businesses, or developers, or policy-makers,” Hwang said. “An influx of middle- and upper-class residents is part of gentrification, but those other investments are equally important and drive the influx of these residents further.”

The paper makes clear that not all neighborhoods change equally, Hwang said.

“There’s a limit to where the change is happening, and that’s why we have persistently poor neighborhoods. If we think of neighborhoods as having a social hierarchy, the ones at the top stay at the top, while the ones at the bottom typically stay there. The ones in the middle can go in either direction, but it depends on their racial and ethnic makeup.”

The new research builds on a 1995 study that examined gentrification trends in nearly two dozen cities across the country, including nearly half of the census tracts in Chicago. The earlier study categorized census tracts according to how gentrified they were based on how much visible reinvestment they were seeing.

To examine whether those trends had continued, Hwang and Sampson targeted areas that had earlier been identified as gentrified and adjacent census tracts, and began using Google Street View to examine them in painstaking detail.

“The idea was to bring the transformative changes that are happening in technology to bear on research, and I think Google Street View will be a powerful tool going forward,” Sampson said.

The researchers used Google Street View to digitally tour hundreds of Chicago streets while gathering data — from evidence of new construction or renovations to existing homes to whether there were signs of neighborhood disorder, such as graffiti or litter. They also looked for public improvements, such as new signs and crosswalks, and efforts to beautify the neighborhood

Each side of each street received a score that reflected its level of gentrification. Across the various streets included in the study, those scores were then aggregated, giving each census tract a score.

“I wouldn’t want this to be interpreted as saying neighborhoods need whites,” Sampson said. “It’s saying that we have a particular history in cities in the United States, and the analysis has to be interpreted within the structure of that history. So rather than saying you need whites, I think what is needed ― and this has always been the case ― is some concerted effort to rethink urban policy.

“During the period of the collapse of cities in the ’60s, ’70s, and ’80s, a great deal of that had to do with policies of disinvestment in poor neighborhoods,” Sampson added. “Today, we need policies and government to play a greater role in the stabilization of neighborhoods, and to protect against cities simply becoming playgrounds of the rich and famous.”

As neighborhoods enjoy the benefits of early-stage gentrification ― higher property values, greater diversity, greater public and business investment ― a big challenge remains in protecting long-time residents from being forced out.

“I think what would have to happen is meaningful reinvestment that also maintains a certain level of affordable housing in order to prevent displacement and that preserves both racial and income diversity,” Hwang said.

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Posts: 22234 | From: האם אינכם כילדי הכרית אלי בני ישראל | Registered: Nov 2010  |  IP: Logged | 

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Beryl Satter knew something like this was bound to happen. Or, rather, to happen again.

The Rutgers historian wrote the book on an obscure form of predatory lending from the mid-20th century that victimized black home buyers when banks would not lend them mortgages. Her book, "Family Properties," came out in 2009, on the heels of the housing crash. And as she traveled the country talking about it — about families defrauded from the homes they thought they owned, about sellers who promised home ownership but collected deposits and evictions instead — people kept approaching her.

"Pretty much everywhere I go, people say 'I’ve been hearing about this,'" Satter says. "Contract" selling is making a comeback.

In this model, buyers shut out from conventional lending are offered an alternative: They can make monthly payments on a home directly to the seller, instead of a bank, with the promise of receiving the deed only once the property is entirely paid off, 20 or 30 years down the road. In the meantime, they have few of the legal protections of a typical home buyer but all of the responsibilities of one. They don't build equity with time. They can be easily evicted. And if that happens, they lose all of their investment.

According to the Detroit News Free Press, more homes were bought in Detroit last year using such "land contracts" or "contracts for deeds" than conventional mortgages. In a series of recent stories, the New York Times has reported that Wall Street is now betting on this market, with investors buying foreclosed homes by the thousands and selling them on contract. Earlier this week, the Times reported that the Consumer Financial Protection Bureau is now investigating the practice's resurgence, although it is not by definition illegal.

What is particularly alarming about the trend, though, is that we've seen it before. In its earlier incarnation, it was an explicitly racist form of exploitation. And now it is victimizing the same groups again: mostly lower income and minority home buyers who can't access traditional credit.

"There’s nothing new here in the slightest," Satter says. "This is just a continuation of the same old game. That’s what’s so disturbing."

In the earlier era when this was common, between the 1930s and 1960s, contract lending was in some cities the primary means middle-class blacks had to buy homes. Real estate agents and speculators jacked up the price of properties two- or threefold. Then when families fell behind on a month's payment or on repairs, they were swiftly evicted. The sellers kept their deposits and found the next family.

Satter's father, Chicago lawyer Mark Satter, helped organize black Chicagoans to fight the practice in the 1950s. He estimated then that about 85 percent of homes bought by blacks in Chicago were bought on contract. "It was the way you bought," Beryl Satter says. "There was no other way." Many of those families then struggled to keep their homes in a system that was not sustainable by design.

Atlantic writer Ta-Nehisi Coates based his blockbuster 2014 article "The Case for Reparations" around the story of Chicago blacks who suffered under this system, the outgrowth, as he put it, of a segregated city with "two housing markets — one legitimate and backed by the government, the other lawless and patrolled by predators."

The Times reports of what's happening today sound eerily similar. Writers Matthew Goldstein and Alexandra Stevenson report that an estimated 3 million people have bought homes through contracts, although the numbers are hard to track given that the deals are regulated differently in each state and are not subject to the same disclosures as mortgages.

The practice is particularly common, they report, in distressed Midwestern communities like Akron and Detroit, where the government offered hundreds of foreclosed properties to investors in bulk sales. Those same investors, the Times reports, have turned around and sold the properties on contract to moderate-income buyers for sometimes four times as much.

Why now?

But why, though, would a financial scheme created in an era of sanctioned racial discrimination be making a resurgence today? Since Satter's father tried to sue over the tactic a half-century ago, the Fair Housing Act and Home Mortgage Disclosure Act were passed. And the end of legal discrimination opened up legitimate lending to more blacks who were no longer forced into the housing market's rapacious underworld.

But a crucial similarity between the two eras exists: Many people still can't get loans today.

Now, this is the case because lenders have tightened their credit standards since the crash, overcorrecting for the bubble's exuberance with historic stinginess. The Urban Institute has counted more than 5 million loans currently "missing" from the housing market — mortgages that would have been made between 2009 and 2014 if lenders used the kind of credit standards that were common back in 2001, a benchmark for more reasonable lending prior to the housing bubble.

Millions of Americans over this same time have had their credit ruined by foreclosures — in many cases because of predatory subprime lending that has now put them in the crosshairs of predatory land contracts. Minorities who were disproportionately targeted for the former are not surprisingly concentrated among those caught up in the latter.

"When the banks close down, people still need to buy," Satter says. And so they find a way. Just as creative investors find a way to meet their demand. Land contracts are to housing what payday loans are to banking and Rent-A-Centers are to furniture. What people in need can't access through credit someone is always willing to provide — for a price.

A lawyer for Harbour Portfolio Advisors in Dallas, one of the larger players in the new wave of contract lending, told the Times that the firm's business model is "to purchase unproductive residential properties and sell them to other people who will make them productive again.” But Satter frames this differently.

"Choices that black Americans have had for housing loans have been predatory loans, or no loans," she says. And when banks choose not to loan, she adds, this is who they choose not to loan to. "The result," Satter says, "is a complete revival of redlining in a slightly different guise."

This is why she wasn't surprised to see the practice she'd studied as a historian (and lived through with her family in the 1950s) re-emerge as front-page news.

One other factor, though, helps explain why contract selling is back again. The demand among buyers who can't get mortgages is deep. But so is the supply of houses that might accommodate buyers at the moderate end of the market. The foreclosure crisis created a vast stock of vacant homes, many of which have deteriorated through neglect. Steven Brown, an affiliated scholar at the Urban Institute, has pointed out that the growing number of homes worth less than $50,000 may help explain the rise of contract selling:

Urban Institute

So an investor who has bought up thousands of distressed foreclosures for $10,000-$20,000 a piece has to get creative. These properties need expensive repairs, meaning there likely isn't much profit in repairing and renting them. They aren't likely to appreciate much over time in stagnant markets like Detroit or Akron, so an investor can't simply sit on them waiting for a recovery. And these homes can't easily be sold at a profit to buyers — even with some modest flipping — because buyers in this market can't get mortgages.

Contract selling, in other words, is just about the most profitable thing an investor could do with these homes. And that opportunity is colliding right now with a time of desperation for would-be buyers.

One way to look at this situation — today or in the 1950s — is that a market failure exists. Something is not working right in the world of legitimate home lending that's causing families to reach for dubious alternatives, and that's prompting dangerous models to proliferate. Satter, though, doesn't see it this way.

"It’s a market success," she says, viewed from the standpoint of the investors. "They figured out a great way to make a huge amount of money in this situation."

As for market failures, she says, maybe we should rethink the term. "If you’re looking at how a market works, this is how it works – people saw an opportunity, they came in and grabbed it," she says. "The market doesn’t care about fair housing for people, or that families need a place to live."

And that is the other lesson of history that is repeating itself.

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Posts: 22234 | From: האם אינכם כילדי הכרית אלי בני ישראל | Registered: Nov 2010  |  IP: Logged | 

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Chicago's Inescapable Segregation

The racial separation that permeates nearly every aspect of life in the Windy City is inexcusable.

Melinda D. Anderson Aug 22, 2016
Chicago is a city with a rich black heritage. And the South Side, fondly dubbed the “heart of black America,” is where much of the city’s cherished history emanates. Comprising a mix of poverty-stricken, working-class, and upper-income black residents, the South Side can lay claim to the country’s first black woman senator, the nation’s first black president, and various black elites. Chicago also holds the inglorious distinction of being one of the country’s most segregated cities. This is also the South Side’s legacy—and it encompasses its public schools.

With the return of Chicago public-school students to school just two weeks away, nearly 1,000 teachers and support staff received layoff notices earlier this month. Among the schools hardest hit: the South Side’s Bradwell School of Excellence and Harlan Community Academy, an elementary school and high school, respectively, with staff cuts in the double digits. The most recent layoffs continue an alarming pattern of racial inequality that was documented following Chicago’s mass school closings in 2013. As reported by The American Prospect, “While black students were 40 percent of Chicago’s school district population … they made up 88 percent of those affected by the [public-school] closures.”

The stain of segregation bleeds into the most basic elements of black lives—from housing and health to food equality and educational opportunity—and no area exemplifies this like the neighborhoods that make up the South Side of Chicago. Natalie Y. Moore, a South Side native and public-radio journalist who covers the region, explores the systems and sentiments that keep Chicago segregation intact in The South Side: A Portrait of Chicago and American Segregation, a newly published combination of personal memoir and historical narrative. She recently shared some thoughts and reflections on her hometown. The interview that follows has been lightly edited for brevity and clarity.

Melinda D. Anderson: In Beverly, a South-Side neighborhood of Chicago, something remarkable was nurtured and grown: The community stands out for its ability to counter white flight in the 1970s and today remains a racially diverse area with some integrated schools—a glaring anomaly in the city of Chicago. Are there lessons to be gleaned from how this community has maintained its racial and ethnic diversity?

Natalie Y. Moore: Integration has to be deliberate and intentional. It doesn’t always just happen or maintain itself. One of the culprits [in advancing] integration has historically been the real-estate industry, which encouraged blockbusting and panic peddling. In the 1970s, Beverly leaders fought back through lawsuits and organizing, such as banning for-sale lawn signs in front of houses. Beverly embraced diversity as inevitable and an asset. Diversity is a marketing tool, and the neighborhood tries to prevent having white sections or black sections. The suburb Oak Park [a village adjacent to the west side of Chicago] is another example. In a sea of segregation, there are best practices. Doesn’t mean it’s a racial utopia or without problems, but these communities are bucking the notion that segregation is inevitable.

We [also] see some integrated neighborhoods, but segregated schools. This is a quandary in Chicago. I see this in Beverly but also in Hyde Park, a diverse neighborhood that’s home to the University of Chicago, where I now reside with my family. Both neighborhoods have a number of white families that don’t send their children to the neighborhood public schools. Beverly has a number of integrated elementary schools, but the high school is virtually all black. There’s local research about the tipping point for white families on residential diversity, e.g., there can’t be too many blacks. I haven’t seen any research on that tipping point related to schools. But anecdotally, it’s evident.

“Many schools suffer from double segregation, by both race and income.”
Anderson: The evolution of the black middle class on the South Side is a theme that runs throughout the book. The “privilege and the peril” experienced by this group of black Chicagoans within the context of deeply segregated neighborhoods reveals a complicated and complex history. From your observation, how do race, class, segregation patterns, and educational choices overlap?

Moore: I see a lot of middle-class parents, regardless of race, jockeying for slots in elite public schools. Chicago has created more of them over the years, but the flip side is that neighborhood schools are left behind. This has created a tiered system in Chicago Public Schools. Many schools suffer from double segregation, by both race and income, often in low-income black neighborhoods. I’ve lived in two black South Side neighborhoods: Chatham, a middle-class community where I grew up, and Bronzeville, [an up-and-coming area], as an adult. In both neighborhoods, many middle-class families didn’t or don’t send their children to the public elementary and especially not the high schools.

Many times neighborhood public schools don’t reflect the surrounding demographics. One of the “perils” of black middle-class neighborhoods is their proximity to poverty and lower-performing schools. We do see that black children—regardless of socioeconomic status—will travel outside of their neighborhoods for school. Chicago has the distinction of having some of the best and worst public schools in the state.

Anderson: The degree to which segregation pervades so many parts of black life is staggering. You profile Chicago’s Englewood neighborhood, and the emergence of urban agriculture as a tool to uplift the community, including its schools. Clearly, studies show poor nutrition among schoolchildren is linked to poor school performance. Is tackling the issue of food access showing promising gains?

Moore: Englewood has actually seen a decline over the years in its food-desert status. The neighborhood is at the center of the food-justice movement, and in September, Whole Foods will open a smaller market at a major intersection. Englewood is a community overrun with junk-filled corner stores and fast food. Residents have asked for more hot prepared food, community space, and food education. Urban agriculture, discount grocers, farmers markets, and nutrition education have contributed to the change.

“We’re going to see a continued decline in overall CPS enrollment.”
Anderson: A year ago this month, 12 South Side activists—black parents and community leaders—staged a hunger strike to save Dyett High School in the Bronzeville neighborhood. As you chronicle, in 1962 black parents and students staged a sit-in for integration at a South-Side elementary school. Black parents fighting for educational equity in Chicago spans many decades. What is your forecast for black and Latino children in Chicago Public Schools?

Moore: [Currently] the most pressing issue … for many CPS families is the budget and whether teachers will strike. I think [in the long-term] we’re going to see a continued decline in overall CPS enrollment and an uptick in white enrollment. But the district will continue to be overwhelmingly black and brown.

Ever since the racial consent decree ended [in 2009, a federal judge lifted a 20-year school desegregation order], white students are overrepresented in the selective [high] schools that require testing. The [feeling] is that the city is pandering to white middle-class parents by continuing to build new schools in white neighborhoods.

Anderson: You note that Chicago officials have labeled segregated schools a problem “too big” to tackle. There is also a school of thought emerging in some education circles that the intractable nature of school segregation makes prioritizing integration akin to chasing the White Rabbit in Alice in Wonderland—unattainable and futile. Your writing underscores the inherent inequality of segregated schools. Talk about your findings, namely the flaws in equating black self-determination with all-black segregated schools.

Moore: Brushing off school integration as unattainable is such a cop out. In the Chicago region, we have been so saturated with segregation that we think it’s normal. And to be clear, self-selection is different from segregation. There’s also the argument that if the housing is segregated, so goes the schools and nothing can be done.

As the race scholar Gary Orfield [of the Civil Rights Project at UCLA] told me for my book, Chicago lacks imagination. The city is equally black, white, and Latino, so there are opportunities, [including] redrawing school boundaries, creating regional magnets, and staying ahead of changing housing patterns. My WBEZ [public radio] colleagues have diligently reported on how CPS school construction enables race and class segregation. So many missed opportunities and clearly no engagement on integration.

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