By Sharon Kinlaw and Steve King
Generation after generation, we have seen the destruction of communities of color in the United States through institutionalized discriminatory practices, lax enforcement of civil rights and consumer laws, and tacit approval and support of market driven policies. The ongoing displacement of millions of families and liquidation of generational wealth as a result of foreclosure fits squarely into this historical lineage.
It is now becoming apparent that the damage done by the foreclosure crisis does not cease with the individual loss of a home. The cumulative toll of displacement is reverberating through entire neighborhoods and cities with the dismantling of social networks and long-established community bonds. In this latest iteration of destruction, the built environment of houses, parks, and street corners may remain, but the human fabric has been disassembled.
I (Sharon) witnessed this first-hand as I visited my mom in Pacoima, California and saw neighbors–many of whom had lived in their homes for as long as 40 years– lose them to foreclosure. I was devastated to see their homes vacant and deteriorating. When I ran into one of the neighbors at the market nearby, he was embarrassed to see me and did not want to talk about why his family had moved. I learned from several other neighbors what had happened. They expressed to me that they feel the essence of the community is changing with the loss of so many long-time neighbors. It is as if these neighbors went missing in the middle of the night, disappearing from the church pews, the schools, and the neighborhood chats that often took place while out watering or mowing the lawn.
It has often been said that in crisis there is opportunity. So we might ask: what opportunities are being created in those communities like Pacoima and Oakland that have been ravaged due to foreclosure? If we take stock of the winners and losers in the current housing crisis, the balance sheet looks eerily familiar. While the crisis nearly brought down the entire economy, the financial institutions culpable for its origins have been miraculously revived. Meanwhile, many communities of color remain on life support, in critical condition.
The story continues to get worse. A recent study by the National Fair Housing Alliance revealed troubling disparities in the way financial institutions maintain their stocks of foreclosed properties. In particular, the study found that banks have provided better maintenance of their real estate owned (REO) properties in predominately white communities, compared to a prevalence of substandard conditions in communities of color.
As disadvantaged neighborhoods are allowed to fall into further disarray, the momentary housing devaluation has created the investment opportunity of a lifetime for real estate speculators. As financial institutions liquidate their backlogs of foreclosed properties, they have effectively fostered an environment that gives an overwhelming advantage to cash investors rather than first-time homebuyers or owner-occupants.
What might this mean for our communities? In Oakland, for instance, where 9 out of 10 investor purchases are in the city’s low-income communities, the investors have telegraphed their plans: “We want to bring in good, productive people and really change the area.” While their profit motive is easily understood, the underlying thrust to dismantle the existing social fabric is horrific. In fact, the most tragic impact may be the trauma experienced by millions of school-aged children who have been uprooted from their homes and schools. The harm that is done to the psyches of folks that remain in—and have involuntarily left—these communities will last far longer than the coat of paint that is slapped on the investor-acquired house that was lost due to Wall Street greed and government indifference.
The evidence that history provides to us is clear: opportunity eludes those directly impacted by crisis.
The extraction of wealth from communities of color in the current crisis as a result of discriminatory bank policies, and continued by well-heeled investors is the same old song, but with a different beat.
We are left with burning questions about what the legacy of foreclosure and dispossession will mean over the long-term. In well-established communities of color where predatory lending ran rampant and displacement continues, can we expect the demise or dilution of longstanding social and political institutions? Will the erosion of neighborhoods as a result of foreclosure also weaken the power and standing of a community’s collective voice? One thing is clear: the current “recovery” of the housing market does not include a recovery of the social fabric of neighborhoods.
Steve King is the Housing and Economic Development Coordinator for Urban Strategies Council in Oakland, California. Sharon Kinlaw is the Interim Director of the Fair Housing Council of the San Fernando Valley in Los Angeles, California.