Here is an excellent article written on the subject in the St. Louis American
Jackie Hutchinson (left) and Clayton Evans
By Jackie Hutchinson, co-chair of the St. Louis Equal Housing & Reinvestment Alliance (SLEHCRA), and Clayton Evans, Community Banking and CRA officer at Reliance Bank and board member of the MSLCRA Association
This editorial was originally published in The St. Louis American.
The historical impact of the early 20th century federal redlining policy continues to hold back many communities of color. For decades, the federal government used a system of color-coded maps to grade neighborhoods for mortgage risk. Red areas were marked the highest risk for loans, which were primarily African-American neighborhoods, meaning residents could not secure financing for homes and were unable to build equity and accumulate wealth from which many white families and neighborhoods benefited.
The impact of redlining continues today. Neighborhoods in North St. Louis continue to show little or no mortgage lending activity. While many neighborhoods in St. Louis have recovered from the financial crisis in 2008 and now have an active mortgage market, neighborhoods north of Delmar have almost zero loans.
One of the contributing factors is depressed housing values creating an almost all-cash market, and making it nearly impossible for potential home buyers to finance a home. Depressed home values of surrounding homes guarantees that more buildings will face demolition and ensures homeownership remains out of reach for many families. This is felt when a family tries to purchase and rehab a home but cannot get a loan because the home’s after rehab value is still too low.
In the Greater Ville community for example, you may purchase a home for $35,000 and provide an additional $50,000 for rehabilitation. After completing the rehabilitation, the home only appraises for $70,000, far less than the $85,000 needed to purchase and renovate the home. Because of this common appraisal gap, the loan is denied. Consequently, homes in the impacted communities stay vacant and fall further into disrepair, while families lose out on becoming homeowners in their neighborhoods.
To overcome the long-lasting effects of redlining and to break this vicious cycle, a coordinated approach to reinvesting in neighborhoods of color is needed. We need to do the opposite of redlining—we need to “greenline” neighborhoods, opening up access to credit for residents to buy homes. Lenders, community organizations, foundations and local governments must work together to create a loan program that fills this need.
We’re calling this approach a Greenlining Fund. This fund, modeled after the Detroit Home Mortgage Initiative, would provide loans for qualified community residents to purchase and rehab homes above their appraised value. In Detroit, the program works with partner banks, foundations, local governments, and a community development financial institution (CDFI) to offer loans up to $75,000 over the appraised value to purchase and rehab a home or repair their current home. Participating banks offer the same loan product, which provides homebuyers with consistent terms and rates on quality, affordable mortgages. Since the program’s beginning in 2015, Detroit has seen the number of mortgages increase by more than 25 percent each year. This program has opened up homeownership opportunities to families who have long been denied the ability to invest in their neighborhoods. We believe this program will work in our market.
The Greenlining Fund would foster homeownership opportunities for residents and help stabilize neighborhoods. Becoming homeowners would help build household wealth for African-American families historically cut out of home-buying opportunities. Homes that have fallen into disrepair will become habitable, reducing the number of vacant homes and bringing life and vitality to neighborhoods. An influx in home rehab projects will create jobs and bring more investment to North City neighborhoods. New mortgages made through this fund will contribute to restarting the real estate market and increasing housing values, helping to improve our local tax base and contributing to the economic viability of the city.
We are already working as a group with the Metropolitan St. Louis CRA (MSLCRA) Association and nonprofit advocates like the St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA) to put the pieces for this fund together in St. Louis. In particular, the report “Segregation in St. Louis: Dismantling the Divide,” recently released by the For the Sake of All project team and partners, included the Greenlining Fund as one of its policy recommendations. We call on our partner lenders, nonprofits, and CDFIs to join us. More support is needed from foundations, our government leaders, and from neighbors and community members that want to undo the effects of redlining in their neighborhoods and instead, invest in opportunities for neighborhoods to thrive.
Jacqueline Hutchinson is VP of Operations for People’s Community Action Corporation in St. Louis. She is actively involved in policy and advocacy issues that affect low-income consumers in the St. Louis region. Jackie is Co-Chair of the St. Louis Equal Housing and Community Reinvestment Alliance (SLEHCRA), where she works to increase investment in LMI communities; serves as board chair for Missouri Consumers Council; and is a member of the Unbanked Task Force. She has a Master’s Degree in Policy Analysis from Southern Illinois University and a Bachelor’s Degree in Business from Washington University in St. Louis.
Clayton Evans is Senior Vice President of Community Banking and CRA Officer at Reliance Bank. He is also a Board Member of the Metropolitan St. Louis CRA (MSLCRA) Association. MSLCRA was formed to provide a venue allowing banks of all sizes within the St Louis Metropolitan Statistical Area (MSA) to come together in a non-competitive environment to share best practices.
Articles in “From the Field” represent the opinions of the author only and do not represent the views of the Community Builders Network of Metro St. Louis or the University of Missouri-St. Louis.
A Missouri Supreme Court case between a tenant and her landlord was decided in favor of the tenant, in a development advocates are hoping may be a sign that the
— Read on www.stlamerican.com/content/tncms/live/
This case represents a major tenant rights breakthrough. Reprinted from St. Louis American
“Your money is no good here.” It may sound like a line spoken by the barkeeper in an old-timey Western movie.
— Read on www.stlamerican.com/content/tncms/live/
A great article by leadership of Empower Missouri about housing discrimination based upon source of income. If people can pay rent, have decent credit, and are good tenants, that is all that should matter. Written by Paul Dribin
The outgoing head of Metro has stated that the agency could have saved significant sums of money by refinancing its’ bonds. County Executive Stenger was unresponsive to this request and the opportunity has been lost. This of course is very disappointing and a sign of the difunctional nature of our governments. Written by Paul Dribin
A good article from River City Ramblings with which I agree. https://stlpolitical.blog/2018/06/26/why-paul-mckee-has-unfairly-become-a-scapegoat-for-the-city-of-st-louis
Yesterday I attended a community meeting which was quite interesting. The purpose of the meeting was to consider contracting Legal Services of Eastern Missouri to legally go after bad landlords. The one landlord we discussed apparently has a Ponzi Scheme in which he raises money from people with the promise they get rich. Instead he pockets the money and leaves the units vacant and in a state of disrepair. There are actual legal remedies communities can bring against such landlords. They have been successful in Kansas City and other locations where tried. I am hopeful we can have some good results in St. Louis. Written by Paul Dribin
The finding comes from research commissioned by HUD. The results to me are discouraging for the following reasons:1. Public health advocates have said that better housing will result in better health care outcomes. That is not the case in this study.2. There must be something in the lifestyle of poor people that results in poorer health. What are the dietary, smoking issues.Here is a synopsis of the report:Does HUD Assistance Affect Child Health Outcomes?July 11, 2018 About 4 million of the 10 million Americans who receive US Department of Housing and Urban Development (HUD) assistance are children. How healthy are these children? Housing policymakers and public health professionals increasingly recognize that housing is an important social determinant of health, particularly among children, as research shows that housing can significantly shape their emotional, psychological, and behavioral health and development. To fill the gap in research that previously relied on anecdotal evidence and case studies, a recent HUD study sought to identify the prevalence of health conditions and health care use among HUD-assisted children.The study provided prevalence estimates of the health of children ages 17 and younger in HUD-assisted households with those living in eligible but unassisted households and the general population. HUD assistance was defined as participation in one of HUD’s three primary subsidy programs: public housing, housing choice vouchers, and assisted multifamily housing. The authors linked responses from the National Health Interview Survey and the National Health and Nutrition Examination Survey over 14 years (1999–2012) to longitudinal HUD administrative data. The study explored differences in demographics, health status, health care use, and learning-related health status among the three groups, but the differences were not tested for statistical significance. The findings have important policy implications that suggest aligning housing assistance programs with health policy to potentially improve cost-effectiveness and health outcomes.Key findings • Most HUD-assisted children were black (52.2 percent) and lived in a single-parent, female-headed household (74.6 percent); 31.9 percent lived in large metropolitan centers. • Although 86.8 percent of HUD-assisted children had insurance coverage through public health insurance programs, they appear to have worse health status than the general population of children. • Most HUD-assisted children (84.4 percent) had a well-child checkup in the past year. Lower rates were reported for unassisted low-income households (80.2 percent) and the general population (76.8 percent). • The percentage of children with unmet medical needs because of unaffordability was similar among HUD-assisted children (3.5 percent) and children in the general population (4.4 percent). • HUD-assisted children (21.2 percent) are more likely to have asthma than children in unassisted, low-income renter households (17.7 percent). • 5 percent of HUD-assisted children had been told by a school or health professional that they had a learning disability.Photo by Alena Ozerova/Shutterstock
The Post wrote yesterday that there is still not a definite date for the start of the Loop Trolley. This is not a surprise. Furthermore when it does begin it will operate only from Thursday to Sunday from noon to 6pm. Does this sound like a winning program? (By the way last week I almost ran into a trolley when I was trying to turn right onto Lindell at the History Museum.). Written by Paul Dribin
According to the website wallet hub, St. Louis is one of the most poorly run cities in the United States. This should come as no surprise to the people who live here or attempt to work with the city. I am constantly surprised by the advocates and housing folks who seem to like it. It reminds me of the wise words of Russ Rodgers, “No system is so screwed up that someone doesn’t like it the way it is.” Written by Paul Dribin