Are Home Prices in Black Neighborhoods Underpriced?

Mish

Homes in Black neighborhoods are underpriced by about $156 billion, according to Andre M. Perry of the Brookings Institution. Do you buy that story?

How to Make the Housing Market More Equitable 

Please consider How to Make the Housing Market More Equitable by  Andre M. Perry. 

Mr. Perry’s research with colleagues has shown that houses are underpriced in majority-Black neighborhoods, a process he calls “devaluation.” That can lead to lower property-tax revenue to fund local schools and infrastructure in those neighborhoods and reduced wealth and discretionary income for Black families.

"We really wanted to see the impact of race on home price. And we controlled for education, crime, walkability, all those fancy Zillow metrics. And what we found is homes in Black neighborhoods are underpriced by 23%, about $48,000 per home," says Perry.

Perry's Cure: More Black Appraisers

"The way you get past what really amounts to a distrust of Black people is to invest in Black people. On the appraisal side, [that means] investing in the training of and development of Black appraisers."

Appraisers Don't Set Prices

Perry's article is preposterous on many front but let's start with a question regarding his alleged cure. 

There are bidding wars in some places and no buyers in others. Why is that?

The obvious answer is buyers are willing to pay more than the asking price in some areas because they see value. They will not pay the alleged appraised valuation in other areas because they don't.

Buyers, not appraises set prices.

Flawed Study

I took a dive into Perry's flawed study. Some of what he says is accurate but his conclusions why are totally wrong. For example:

According to our analysis, differences in home and neighborhood quality do not fully explain the devaluation of homes in black neighborhoods. Homes of similar quality in neighborhoods with similar amenities are worth 23 percent less ($48,000 per home on average, amounting to $156 billion in cumulative losses) in majority black neighborhoods, compared to those with very few or no black residents.

Perry is No Judge of Quality

Perry is undoubtedly correct that homes of a similar size are priced lower in Black neighborhoods. He used Zillow data to conclude that. As bad as Zillow is about some things, square footages are likely to be accurate.

But who is Perry to assess quality of construction, interior design,  neighborhood quality, and most importantly the price people are willing to pay for less crime and better schools? 

Perry claims to adjust for crime and still comes up with an alleged 23% "devaluation".

Yeah right. If the market disagrees, so do I. 

Curiously, if city appraisers did what Perry wants (appraised homes higher for no reason) property taxes would rise and the prices that people would be willing to pay would drop. 

Perry Wants a Bubble

Add it all up and Perry is complaining that Black neighborhoods are not in the same housing bubble as white neighborhoods. 

But if investors actually believed housing in a neighborhood was underpriced, they would swoop in, buy houses, fix them up and resell them for a profit or rent them out.

News for Perry 

If homes are not selling it is because they are overpriced, not underpriced.

Alleged appraised value and black appraisers cannot change that simple fact.

Mish

Comments (28)
No. 1-20
Goblueguy
Goblueguy

True that buyers set prices. But as I found out from trying to buy a Detroit house, if the appraisal is lower than the current, actual market price, you aren't getting a mortgage. Something like 6,000 mortgages were written on Detroit houses, in a city of 600,000! Most are sold for cash because you cannot get a mortgage. These are beautiful mansions, not slum houses I am talking about

threeblindmice
threeblindmice

Perry is arguing that black homeowners should pay higher real estate taxes to fund schools better. Why not let black homeowners use their "too low" taxes to supplement their kids' education either via tutoring/extra classes or private and/or charter schools. I'd guess Perry started from his desired conclusion and worked backwards.

Dodge Demon
Dodge Demon

Why not the time-honored real estate investment move of trading up? No capital gains tax for selling your house and making a profit as long as you live there 2 years out of the last 5. Great deals in Chicago's Lincoln Park, Wicker Park, Bucktown, North Center, Bucktown, Andersonville, Logan Square (current mayor lives there), Wrigleyville/Lakeview, Ravenswood (Rahm's neighborhood, where The Tiny Dancer hid his wedding dress in a basement like something out of National Treasure), Old Town, Edgewater, and The Bryn Mawr Historic area. Great properties, schools, transportation, shopping, restaurants and entertainment.

SoCaliforniaStan
SoCaliforniaStan

Let me see if I've got this right. Blacks are able to buy houses for prices below the "real value."

That's a problem? I thought it was a lack of affordable housing that was the problem?

Chipsm116
Chipsm116

@Mish - totally agree with everything you wrote. There are two additional issues with his analysis:

  1. Perry claims that these homes are undervalued due to racism. For argument's sake, let's assume that's true. Even so, people with racist attitudes will continue to participate in the housing market. Consequently, homes in black neighborhoods will continue to have relatively lower values. That seems like stating the obvious, but Perry seems to overlook it. His solutions do nothing to fix the underlying cause, if it is in fact the case.

  2. Ironically, even if the prices of these homes could be increased with a magic wand or black appraisers, all this would do is price low-end buyers out of these houses and neighborhoods. Given wealth and income disparities across races, this would disproportionately impact African-Americans. As a result, these neighborhoods would become less black over time (a.k.a. gentrification). I am not familiar with Perry, but I would assume he views this as a negative. Increasing the attractiveness of "black" neighborhoods is invariably a double-edged sword for those who want to keep them "black".

shamrock
shamrock

When the disparity in prices are large enough, white people start moving in in a process called gentrification. People hate that too.

stanleyh
stanleyh

buyers set prices, yes. but what buyers are able to pay is a combination of what the buyer earns and what the bank is willing to lend based on that income and the risk involved if they cannot be paid back.

Eddie_T
Eddie_T

So...I do have zero doubt that there are some underpriced homes in predominantly black and brown neighborhoods.

I’d like to identify some and buy them.

We call that a successful arbitrage.....when somebody who can see the future buys something and gets really excellent value because they understand that change is coming.

But here there aren’t any like that here anymore. That ship sailed years ago.

Corpus Christi is a different story. I keep telling people I see value in Corpus Christi, I get looks like I’m crazy. But you could find lots of properties there to gentrify....for a great price.

But there will always be neighborhoods in some places...lots of places, where the perception is that the ethnic neighborhoods are dangerous, have high crime....whether it’s true or not.

Nobody wants to hear gunfire in their neighborhood. Nobody wants to be held up or ripped off or be a victim of the knock-out game, which happened to my son when he was a student in Chicago.

Six000mileyear
Six000mileyear

The President BILL Clinton used the Community Reinvestment Act to force banks to lend to communities where there were fewer deposits. The theory was the poorer communities would benefit. The result was a housing bubble that popped and caused many foreclosures.

Six000mileyear
Six000mileyear

Andre M. Perry seems to forgot Bill Clinton used the Community Reinvestment Act to force banks to lend to under-served areas. Housing prices went up, the bubble popped, and people were wiped out financially. If anything, Mr. Perry should be calling for the repeal of the Community Reinvestment Act.

Sechel
Sechel

appraisers don't set market prices but a bad appraisal can limit access to credit

Webej
Webej

I bought my first house in the ghetto for $800, as a student. Sold it for $1600 after a year and a few improvements. Big house, big kitchen, we lived there with 4 people, double free standing garage, large lot. Formerly well-to-do middle class neighborhood. Coming from Canada the house was a steal, about 1% of the price I expected, cheaper than renting, home-owner decades before expected.
There were a few drawbacks: Coming home at night and thinking something is different here today, finally it dawns that they bulldozed the house 3 lots over today and turned it into a sand lot. Or having to get the ladder out in the morning to board everything up again with plywood before leaving for class, only to have to kick the boarding out at night to be able to sleep in the heat.

I'm sure the best way to improve the lot of people in a neighborhood like this is higher mortgages and higher taxes. [An ignorance that could only be the fruit of reading many books.]

Sechel
Sechel

If homes are not selling it is because they are overpriced, not underpriced.

It's more complicated than that. There are other issues, such as crime, infrastructure like transportation, schools , access to goods and services. Without these no price will be a good price

njbr
njbr

How would we have gentrification without under-valued real estate?

People move in from other nearby tight markets, prices go up, old residents of the area complain about the changes, the rent gets "too damn high", affordable housing is lost and the new people don't know what was there before.

The problem is that there has to be a genuine, widespread and transracial "rising tide to lift all ships".

Gentrification and Displacement in Harlem: How the Harlem Community Lost Its Voice en Route to Progress - Humanity in Action
Gentrification and Displacement in Harlem: How the Harlem Community Lost Its Voice en Route to Progress - Humanity in Action

It’s dusk and after a long day of travels and interviews, our rumbling stomachs lead us to 125th street, searching for a place to eat.  Once the heart of African American cultural life, it was less than fifty years ago that Malcolm X spoke here while a young Muhammad Ali stood and listened in the crowd. Both Stevie Wonder and Aretha Franklin sang their hearts out in the Apollo Theatre a little further on. It’s our first day of research and for now all we want is to sit back, relax and take in the historical neighborhood with good food, a cool drink, and some soothing music. Our first bet is Lenox Lounge or the ‘Zebra room’ - open since 1939 and once home to legendary jazz musicians like Billie Holiday, Miles Davis and John Coltrane. The melodic tunes inside sound inviting, but the price list is not.  Moreover the patrons consist mainly of white tourists. After leaving the bar we contemplate ‘Sylvia’s’ to taste traditional soul food, but eventually decide against it, having warned that it might be ‘greasy, heavy and full of calories.’ By means of a compromise, we settle for a Korean owned salad & soul food bar. Without realizing it at the time, our decision-making process is a typical symptom of the very phenomenon we are trying to research: gentrification - the change in urban areas associated with a rise in affluence. [perfectpullquote align="right" bordertop="false" cite="" link="" color="" class="" size=""]The closing down of Harlem restaurants is a product of the influx of wealthy younger, non-natives into Harlem, forcing soul foods’ traditional customers to leave the neighborhood. [/perfectpullquote] Originally, soul food restaurants were the dominant diners here in Harlem but traditional dishes such as butter beans, country fried steak, and oxtail soup are becoming increasingly hard to find. Historical eateries such as 22 West, where Malcolm X used to do radio broadcasts, along with many others have been forced to close down in recent years, due to a lack of customers and an increase of rent. According to a recent New York Times article, contemporary Harlemites are more interested in ‘healthier options’ such as ‘soul-food-light,’ Thai or Chinese food, and although at first one might see no wrong in these alternate dietary preferences, it is not as simple as another community succumbing to the current health craze. Soul food’s popularity is not declining in Atlanta, Georgia or even in Queens, New York. The closing down of Harlem restaurants is a product of the influx of wealthy younger, non-natives into Harlem, forcing soul foods’ traditional customers to leave the neighborhood.  It is just one instance of a greater dilemma in Harlem—the fact that gentrification breeds displacement. 125th street – The Changing Flavor of the Block Perhaps the controversial rezoning of 125th street is the most recent and troubling example of the continual erosion of the culture and displacement in Harlem. Current plans will transform it from “a low-rise boulevard lined with hair salons and buffet-style soul food restaurants into a regional business hub with office towers as high as 29 stories, more than 2,000 new market-rate condominiums, as well as hotels, bookstores, art galleries and nightclubs.” [perfectpullquote align="left" bordertop="false" cite="" link="" color="" class="" size=""]Stripping 125th street of its identity by turning it into another Manhattan high street might be a success commercially, but culturally a disaster.[/perfectpullquote] Most Harlemites oppose the idea of turning this historically and culturally significant boulevard into ‘an extension of Manhattan’s upper East side,’ says Neil Shoemaker, director of Harlem Heritage Tours.  The department of city planning claims that public outreach and involvement were critical to them and subsequently, held a series of meetings with an extensive Advisory Committee and community members.  But the plans as they are now will still radically transform 125th street, traditionally a place for artists to express themselves and social activists to congregate.  Stripping it of its identity by turning it into another Manhattan high street might be a success commercially, but culturally a disaster. Vance Rawles – a 24 year old student and Harlem native – expresses his concerns: “When I was little it wasn’t the stores and the buildings but the vendors outside—people selling things, performing. That was Harlem.  When Mayor Giuliani rezoned them to a parking lot in the nineties, we were worried that it would change the face of Harlem. Now, with the rezoning of 125th street it feels like history is just repeating itself. Those people have been there longer but now, they don’t fit into Harlem anymore with the new buildings and establishments.” Although it is commonly agreed upon that changes and improvements are necessary to reduce unemployment and to increase the area’s median household income - approximately three times lower than the rest of Manhattan – Harlemites fear that the proposed changes will not benefit them. Proponents say that the rezoning will create nearly 9,000 jobs, provide hundreds of units of affordable housing and lead to more restaurants and shops in the neighborhood.  However, studies indicate that as many as 71 African American owned businesses and their 975 workers might be displaced by these plans. Current residents also fear that the street’s new face will attract wealthier people from all over Manhattan, further increasing the price of rent and eventually forcing them to leave their homes. [perfectpullquote align="right" bordertop="false" cite="" link="" color="" class="" size=""]The improvements in city services and crime rates that followed the ‘second Harlem renaissance’ have improved living conditions in the area, making the neighborhood safer and better maintained.[/perfectpullquote] The Cost of Progress That is not to say that the concept of gentrification is all bad. For one Harlem resident who calls himself Ali, private investment is a sign of change and progress, which he proudly welcomes for a neighborhood that has been neglected for so long. Many older Harlem residents remember a time when the city was infested with drugs, plagued by high crime, and preyed upon by unscrupulous slumlords. There’s no question that Harlem was a tough place to live before redevelopment in the 1980s revived interest in the neighborhood. The improvements in city services and crime rates that followed the ‘second Harlem renaissance’ have improved living conditions in the area, making the neighborhood safer and better maintained. Unfortunately for Harlem, the historic capital of African American culture, the process of progress appears to be stomping out a long history of rich black culture and community. Indeed, many Harlem residents feel that the rise of increasingly unaffordable luxury housing, lack of school improvement and limited job market demonstrates the absence of meaningful investment in the community. Instead, the money coming in is being spent on commercial development. There is no doubt that the top-down approach to development, initiated by city planning commissioners and private developers have left many Harlem residents feeling disempowered and angry. William Allen, the Democratic district leader in Harlem, describes a feeling of instability and frustration in the community as people slowly realize that the long-awaited improvements are not meant for them, but instead are aimed to move them out.  Indeed Jonathon Thomas, an educator for the ‘Summer Youth Development Program, which focuses on financial literacy, career readiness, health awareness, and higher education, expresses concern about the lack of attention on community programs and social services such as his own. [perfectpullquote align="right" bordertop="false" cite="" link="" color="" class="" size=""]"It’s nice to have bigger apartments and fancier stores, but the heart of the matter is that what makes Harlem valuable can’t be quantified in that way.”[/perfectpullquote] According to Vance Rawles, “it’s nice to see a Starbucks in Harlem so we feel like we’re not behind the rest of the world, but bringing business to Harlem is not the same as turning it into the new Wall Street or Soho. It’s nice to have bigger apartments and fancier stores, but the heart of the matter is that what makes Harlem valuable can’t be quantified in that way.” Rawles further articulates his frustrations saying, “it doesn’t feel like we’re in control of our own destiny. These aren’t changes that we are enacting—and by we I mean the people. These things didn’t come out of a community outcry.”  Neil Shoemaker attests that “without culture there is no Harlem.  Our cultural capital needs to be preserved and people in the community didn’t have a seat at the table when decisions were being made in the back room.” Harlemites Priced Out of Their Own Community From 2000 to 2005, 32,500 blacks moved out and some 22,800 whites moved in to the Harlem district.  Many argue that this displacement of blacks from the neighborhood is a result of increased housing costs. [perfectpullquote align="left" bordertop="false" cite="" link="" color="" class="" size=""]Housing prices on the open market have soared 247 percent in the past 10 years.[/perfectpullquote] With renovated lofts and brownstones going for anywhere between $1.5 and $4 million, one must assume that these developments are aimed at wealthy New Yorkers looking for a new home. Housing prices on the open market have soared 247 percent in the past 10 years.  Typical prices for an apartment in Harlem now approximate  $458 per square foot.  And while rent stabilized apartments can range from $500 to $800, an unregulated market-rate apartment can reach up to $4.000 per month. The effect of the inflated housing market in Harlem transcends generations.  It affects older residents whose fixed incomes make it difficult to keep up with the rising cost of living.  Further, what no statistics or data articulate, is the displacement of the young people—many children born and raised in Harlem grow up and simply cannot afford to live in their city to these skyrocketing prices. Moreover, as a direct result of the growing housing prices, Harlem has seen a wave of landlord harassment claims.  Local community groups and tenant associations are increasingly revealing stories of how landlords illegally charge excessive rents for stabilized units, send tenants threatening notices to leave the regulated stock, stop providing services, and threaten to deport undocumented immigrants. A testimony from Lenox Terrace: Landlord Harassment The motivation for getting new tenants in is one of profit.  Driving rent-regulated tenants out means bringing in new tenants who can afford to pay market-rate prices. [perfectpullquote align="left" bordertop="false" cite="" link="" color="" class="" size=""]More creative tactics are being used by landlords with the purpose of pushing residents in stabilized housing out. [/perfectpullquote] Harlan Hill, a contractor repairman and longtime resident of the privately owned building Lenox Terrace, at 132nd street and 5th avenue, has experienced this harassment first hand.  The Olnick Organization—owners of the Terrace buildings—have a bad reputation for intimidation schemes and techniques. “Anybody they can get out, they try hard to get out. You can't imagine what they come up with. In my case they were trying to evict me, by claiming that they never received my money orders. Then they sent the marshal to change the lock on my door, so I couldn't get into my apartment. When I finally got things straightened out and got back in my flat, the money orders mysteriously appeared under the door a few days after the trial.” Listening to Mr. Hill's testimony, it turns out that more creative tactics are being used by landlords with the purpose of pushing residents in stabilized housing out.  And, according to Mr. Hill misuse of rules for renovation of buildings, the so-called Major Capital Improvements (MCIs), justify hiking up the rent. “In my building they decided to change the windows, even though they were fine. Not only do they pass the MCI cost on to the tenants in terms of higher rent, once the windows are paid for the rent doesn’t go down again.  And on top of this, any private owner can take the cost of improvements as tax deductible. It is a win-win situation for them. I really find it hard to understand, why the government allows it.” Hill feels like the local government has not come to their aid, and recounts his own case brought against the building as testament (Lenox Terrace v. Hill, decided August 3, 2006). “It was a parking issue, he says, and although the lease allowed us a parking space along with our apartments, Lenox Terrace wanted to separate that and put the parking space on lease.  They were asking $300/350 a month to park!  And not one politician spoke up.  I went to court to fight for our rights, because you can’t just change a lease—it’s a fundamental contract; and I won.” Most tenants don't know the law and cannot afford attorneys. Therefore, Hill, both of whose parents were attorneys, has now decided to help those facing eviction. “The last one I helped, was a guy who was dragged to court, because the landlord accused him of not living in his flat. He had a driver’s license in New Jersey and grew up in Spanish Harlem, so they harassed him about living there.  I took him to court and today he is still here in the Terrace.” Though this particular story resulted in a happy ending, not all do. Many living in Lenox Terrace and the neighborhood surrounding it have not been so lucky. The sentiments are that the residents just don’t have anyone to come to their aid. [perfectpullquote align="right" bordertop="false" cite="" link="" color="" class="" size=""]Presently, HUD (Department of Housing and Urban Development) is denying new applications for voucher assistance for low-income households.[/perfectpullquote] A Failure of Policy For some, the core solutions to harassment and housing displacement stem from the lack of protection from policies originating from the Division of Housing and Community Renewal or DHCR.  At the office of the Manhattan Borough President Scott Stringer, Lori Williams, a member staff and advocate for affordable housing,  explains that a critical problem has surfaced with the expiration of the state-managed Mitchell-Lama program.  It provides middle-income tenants with affordable apartments and co-ops by allowing low-interest loans and tax-breaks for developers.  The pitfall lies in the freedom given to the landlords who can choose at the end of the 20 year period to pre pay the remaining mortgage and opt-out of subsidies, effectively placing apartments at market-rate. According to the Community Service Society, a city public policy anti-poverty organization, New York City has an estimated 39,392 units left after losing about 26,254 units from the Mitchell-Lama program over the past 16 years. With accelerated gentrification throughout the city, several units are leaving the program, and there are some 4,000 apartments in 12 developments on notice to quit. The Harlem Tenants Council gives an unofficial report of hundreds of black tenants living in former Mitchell Lama buildings such as Schomburg Plaza and Lake View, who are being forced out, unable to pay escalating rents. Section 8, Lori Williams describes, is another common source of housing displacement.  Presently, HUD (Department of Housing and Urban Development) is denying new applications for voucher assistance for low-income households.  And it is only extending expiring vouchers for special purposes, resulting in a static waitlist, for all those in need of government subsidized housing. Moreover, in looking for apartments, one might find many new buildings unwelcoming of these vouchers or “programs,” which in effect, illegally discriminates against low-income renters.  It appears that a combination of policy and practice are effectively excluding a large segment of Harlem residents, minimizing the chances that people can afford to continue living here. [perfectpullquote align="right" bordertop="false" cite="" link="" color="" class="" size=""]The city of New York became the collective landlord for some 70% of the borough’s properties.[/perfectpullquote] Gentrification Did Not Happen Overnight It was not always such a difficult task to find housing in Harlem, however.  In the 1970s, Harlem saw an unprecedented number of owners default on their taxes and abandon their buildings. Therefore, the city of New York became the collective landlord for some 70% of the borough’s properties. And for years, buildings remained unwanted shells used as congregating points for drug deals and other nuisance activities. Even as late as 1994, Harlem maintained the highest concentration of vacant city-owned buildings in the city. The definitive shift in the city’s dilapidated housing stock came in the 1990s, as the government passed the Third Party Transfer Program, which sanctioned the transfer of city-owned property to private developers.  According to Lori Williams, the incentive for the city was to get the housing market in Harlem started again.  For Harlem, this was supposed to be a critical step on the path towards progress.  But for those critical of gentrification in Harlem, progress came with a price. The Shackles on Harlem are Made of Money Many Harlem residents and community leaders feel that local politicians and church leaders are to blame.  The wave of over-development in Harlem has left many residents “priced-out” of their own apartments and neighborhoods.  Rawles says, “I feel betrayed by elected officials. I feel like they did sell us out because there’s always an interest in bringing business to Harlem, but you have to think about the historical makeup of Harlem.” [perfectpullquote align="left" bordertop="false" cite="" link="" color="" class="" size=""]“Politics is a business of keeping power...and you should never trust anyone with power.”[/perfectpullquote] Allen openly criticizes local government for actively deceiving communities of color, who are too trusting of their local politicians. “Politics is a business of keeping power,” he says, “and you should never trust anyone with power.”  Many in the community cite Charles Rangel, congressmen for the 15th district and current chair of the powerful Ways and Means Committee, as well as C. Virginia Fields, former Borough President, as culprits. Both Reverend Manning, pastor at ATLAH church in Harlem, and William Allen confirm that black political leaders were at the forefront, cutting deals with the real-estate community which cared little about protecting Harlem natives.  Rather, they sought to push out working and middle income residents in order to push up the rent.  Indeed, Fields and more recently Rangel, have been criticized for accepting hundreds of thousands of dollars from real estate companies, which raises questions about where their loyalties lie—to their own communities or to special interests focused on the bottom dollar.  According to Manning, “the leaders have been criminal in their failure to invest in the people.”  And for him, what is worse is that church leaders have been co-opted into the process.  Abyssinia Church, one of largest and oldest traditional black churches in Harlem sold vacant properties and lots to developers, says Manning.  For him, it would seem as if the churches and politicians are united together and equally mired in corruption. [perfectpullquote align="right" bordertop="false" cite="" link="" color="" class="" size=""]"By building the community from the inside and out, we have made sure, that gentrification will not have the same displacing effect here, as it has had in Harlem."[/perfectpullquote] A Jamaica Perspective Situated on Merrick Boulevard, at the end of the F-line uptown, is the impressive Greater Allen A.M.E. Cathedral. Reverend Floyd Flake, former congressmen and lead pastor of the 25.000 member mega-church in Jamaica Queens, outlines his theory on what went wrong in Harlem—a theory that brings attention to the importance of local entrepreneurship and the will to engage the community. ”When I came to Jamaica in '77, the city had a lot of foreclosed housing and empty land.  Today we have built houses on each and every space here and sold to locals. By doing this we have based the community on home ownership and not on a rental base as in Harlem. By building the community from the inside and out, we have made sure, that gentrification will not have the same displacing effect here, as it has had in Harlem. And that has been my theory all along.” With his firm belief in home ownership as a way of protecting his neighborhood,  Floyd Flake started building up the community of Jamaica, specifically an effort in three core areas—education, housing, and crime.  By raising money from congregations and Federal housing loans, the church community has built a 300-unit apartment complex for the elderly. Next-door are about four-dozen two-family homes that the church's real estate arm is helping to build with city and state housing dollars. Since the late 1970s, over 600 houses have been acquired or developed and sold by the church to private home buyers around the neighborhood. As Flake reflects on the unstable housing market in Harlem, he leaves the impression that the opportunities to build were there in boarded up vacant buildings.  Whereas the congregation in Jamaica made a conscious decision to change the mindset of the community to one of active investment and ownership, politicians in Harlem did not encourage the same investment. “Charlie's big dream was to chair the Ways and Means Committee—he was never a builder” says Flake of his former colleague Charles Rangel. [perfectpullquote align="left" bordertop="false" cite="" link="" color="" class="" size=""]Can the community of Harlem empower itself, or is it too late?[/perfectpullquote] Today the leadership of Flake has what seems to missing for politicians and church leaders in Harlem: the power of the people. Having this instrumental support from thousands in the community means that he can make independent decisions without having to sacrifice community interests for purposes of election.  And, for members in the Jamaica community he certainly provides a direct source of accountability. As Reverend Flake recounts his long fought effort to stabilize and empower Jamaica, one question comes to mind: can the community of Harlem empower itself, or is it too late? Harlem Fights Back Some would argue that it is too late for the community to organize in Harlem.  The increasing numbers of African Americans emigrating of African Americans to the Bronx as well as down South - Atlanta, GA and Charlotte, NC –suggests that this process will continue until the neighborhood is completely gentrified.  However, according to Allen, although a lot of residents still don’t realize what’s going on, there has been a lot of mobilization from within the community to fight back. [perfectpullquote align="left" bordertop="false" cite="" link="" color="" class="" size=""]It appears that gentrification and displacement were the wake-up calls Harlem residents needed to take control of their own communities.[/perfectpullquote] Reverend Manning is even willing to jeopardize the well being of the entire neighborhood in order to stop further displacements. He is now calling for a boycott of all businesses as a means of economically starving the city to prevent future contracts.  The goal is to make private developers lose interest in Harlem. In theory, this retrogressive strategy should eventually collapse the housing market, and enable the Harlemites to buy back the city—that is, if the action doesn't drive locals away and engulf the area with deep economical depression. Thankfully, there are also people with less outrageous and precarious strategies. More progressive methods such as lobbying politicians and organizing marches against reactive policy and unpopular legislation like the 125th street rezoning are giving people a voice within their community. Nellie Bailey of the Harlem Tenants Council and Mary Elys Vivanne, lead organizer of Manhattan Together, emphasize the importance of cultivating a strong tenant base to stand up to pressures of landlords. “If tenants are disconnected from each other and don’t know their rights, landlords will abuse this” says Vivanne.  “We are here to organize them, so they can fight for affordable housing.” Neil Shoemaker articulates an educational approach to fighting gentrification.  In order to take advantage of the government subsidized affordable housing, “people have to have their credit in order, have a record of paying bills on time, and have a stable income.”  William Allen is putting Shoemaker's logic into action. As the educational coordinator for the Summer Youth Development Program, he has brought together more than 700 high school students and organized financial literacy workshops, giving them the tools to be proactive in investing in their own communities. “We are trying to make the children aware of this at a early stage,” he explains, whilst a class of some 20 African American kids are seated for the day’s lesson on credit. In spite of his enthusiastic work with the local kids Allen himself is not particularly optimistic when it comes to the future. “Within five to ten years Harlem will be white. That's just how it is,” Allen says without hesitation. Harlem’s strong history of resistance, however, suggests the community will not give  in any time soon.  Shoemaker proclaims that “in the 1960s people were asking the questions, they were marching. Once we got the opportunities and advancements, people felt that we had done it. We had overcome.  Now we realize we have a long way to go…but we are not giving up.” Now that the alarm is in ringing in Harlem, there’s no more pressing snooze.  It appears that gentrification and displacement were the wake-up calls Harlem residents needed to take control of their own communities.  And now people see that progress must be monitored with vigilance, and they must also fight to regain their historical place, as a powerful voice for the black community.

Flappingeagle
Flappingeagle

Paying for a place to live, be it owning or renting, is a cost of living just like food. We don’t cheer when food prices go up and we should not cheer when house prices go up.

PecuniaNonOlet
PecuniaNonOlet

I did a search for where most black people live and got this list. Perhaps the greater problem is many black people live in states with poor economies and little opportunities. DC, Mississippi, Louisiana, Georgia, Maryland, South Carolina, Alabama, North Carolina, Delaware, Virginia.

ohno
ohno

So let me guess........now they will taxes to the point of where they think the value should be at lol.

Doug78
Doug78

If you increase the price of their principle asset without proportionally increasing their income then you are not doing them a service. All you are doing is increasing their property taxes thereby actually decreasing their income. Alternately you could have hedge funds buy the undervalued assets and then jack up rents. Since this income stream comes from poorer people you can lobby politicians to increase transfer payments to the poor allowing the hedge funds to capture that extra income as well. It's the slum landlord trade that goes back ancient Rome and maybe back to Babylon.

Corvinus
Corvinus

The study is nothing but liberal confirmation bias with respect to the conclusion. This is another bleeding heart no win scenario (for whites). Houses in black neighborhoods are cheaper than market value because of racism...But then if whites all of a sudden start buying up houses in black neighborhoods, they'll start screaming 'gentrification' and claim that whites are taking advantage of minorities and pushing them out because of..you guessed it..racism.

Squawker
Squawker

A market-based economy functions best when capital is allocated efficiently. Developers, lenders, investors, buyers, sellers, etc. seek to earn the highest rate of return possible. Those that fail will not last long in a competitive marketplace. Appraisers merely measure the actions of these participants using one of several definitions of market value. Should we develop some other definition of value that would equalize some of the alleged bias? What is the responsibility of the GSE’s in this regard? Will they securitize loans based on valuations conducted to another definition of value? If the aim here is to eliminate discrimination it seems appraisers will be required to, in fact, discriminate when selecting market data.

When appraisers value a property under rent-control, we discriminate against current market rate sales or properties that are exempt. When we value affordable housing, we discriminate against market based sales. When we value tax advantaged properties (Mills Act, for example), we discriminate against properties taxed at market value. All of these involve pre-existing conditions that distort the market imposed by a governmental authority for a societal benefit (presumably). It would naturally follow then, that we will have to invoke a quota system in selecting market data under a new push to eliminate racial discrimination in appraisals. Moreover, we will have to overlook the fact that market participants themselves . . . discriminate.


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