Minorities still reeling from Great Recession
For black homeowners, it was a step backward
Gwynn Gittens had always been a renter, and every place she rented had white walls.
When she saw the Lehigh Acres, Fla., spec house with its pale gold walls and Italian tiles, “It was just perfect,” Gittens said. “This was home.”
The year was 2007. Mortgage rates had topped 6%.
“We know it’s a little high right now,” the bank representative said of her $1,300 monthly note, “but after a year, you can look at refinancing.”
Gittens and her husband had furthered their educations and expected their boat would rise. Instead, her husband lost his pipe fitter job in the housing crash, and the bank that promised to modify their mortgage foreclosed.
Every Southwest Floridian has a tale such as the Gittens’ or knows someone who does. But the Great Recession flattened minorities — especially African Americans such as them. It wasn’t supposed to happen this way.
“We have a problem here in America because fewer than half of all Hispanics and African Americans own a home,” President George W. Bush said in 2002, promising to add 5.5 million minority families to the rolls of home ownership.
Back then, the median wealth of a typical black family was $63,000; a quarter of what it was for the median white family, according to an American Civil Liberties Union report.
Modest as it sounds, this was a huge milestone for African Americans, many more of whom could qualify for an entry-level home.
“Without the Great Recession, home equity values for black and white families at the same income and education levels were headed toward parity by 2050,” the ACLU found.
If only subprime loans targeting minorities hadn’t pumped the market and then helped tank it. Lenders even steered well-heeled black families down the subprime path. A Department of Treasury report found highincome blacks twice as likely as lowerincome whites to refinance with these costlier, riskier loans.
The come-on of predatory products are one of the reasons Lehigh Acres grew so fast in the boom years, urban planner Daniel Herriges said, and why its racial makeup, controlled in its segregation years by protective covenants, changed from 93% to 66% white.
Today, most of Lehigh’s former homeowners, including the Gittens, rent homes owned by out-of-town investors.
From Miami to Los Angeles, law-
suits continue against banks that allegedly steered blacks and Hispanics to higher-cost, riskier loans, even when they qualified for better.
Discrimination played a role in loan modifications and foreclosures, too, federal agencies found.
Keenya Robertson’s organization, Miami-based Hope Fair Housing Center, joined 19 others in a complaint against Fannie Mae for neglecting foreclosed properties in minority neighborhoods.
“Over the years, the level of maintenance that would happen was higher in white neighborhoods, and those homes were marketed,” Robertson said. “This sucked the equity out of black neighborhoods.”
It wasn’t just property managers and banks that let minority real estate wither. Cities, including Fort Myers, Fla., also contributed to their disinvestment and decline.
In 2007, when home values peaked at $110,000 in Dunbar, Fort Myers’ traditionally African-American area, the city made it a Community Redevelopment Agency district. Funds for improvements had to come from increasing property values.
There weren’t any.
Instead came the crash, lopping Dunbar’s median home value to $16,000 in 2009. The district could have been sun-setted and restarted at that rock-bottom base, but the city did nothing for eight years. It slashed spending in the area and kept an open dump site there, while using general revenue in other areas. Today’s median Dunbar home value is $65,000.
Through the Great Recession, Barbara Parker kept her Fort Myers home because she owned it. Her approach to real estate — as a long-term homestead rather than a material asset — is one many African Americans share.
“We didn’t buy homes to stay 10 years and sell,” the retired Fort Myers educator said. “That’s a businessman’s idea. Our goal is to settle down, raise a family and have somewhere to live when we grow old.”
Parkers’ grandparents lived in sharecropper housing. At a time when banks didn’t lend to blacks, her parents’ landlord sold them his house.
When her turn came, Parker bought a lot in Fort Myers’ Dunbar. Then she took a night job selling shoes.
“This is what I wanted,” she said, “a front yard and a yard in back, a place to raise a family, and when I die, a place to leave to my kids.”
Eight years later, in 1990, she built the two-story, three-bedroom house she could afford. For Parker, a single mother, “borrowing money means you owe someone, and you don’t want to be in debt. I didn’t have anyone to depend on.”
Although the Great Recession brought more renters to her neighborhood, black homeowners remain a strong presence in Fort Myers.
“When people in our community purchase their home, they’re here for life,” Parker said.
As post-recession prices have inflated home values in traditionally white enclaves, minority neighborhoods offer a last bastion of affordability.
But black and Hispanic families need help to compete even on their home turf, especially against cash-rich investors.
Terry Records of Records Results Real Estate is one Southwest Florida real estate agent who has researched down-payment grants to get entry-level buyers into homes.
Along with East Fort Myers, Dunbar offers opportunities, Records said. “The renters I talk to can still buy a house in the Dunbar neighborhood,” she said. The deals won’t last long, though. “A house I’m looking at in Dunbar that’s $64,099 will be in the $90,000s 18 months from now,” Records said.