Some trends are starting to emerge
Recently, Memphis was featured in the New York Times . But it wasn’t about an early tribute to the Carnival Memphis nor about another Hollywood film shot in the area. The NYT focused this time on the real estate downturn that the city has never experienced in the past decades. The newspaper highlights the unjust treatment of Wells Fargo to its residents, majority of which are black and had no clue on how they’ve gotten into the mortgage mess that they’re currently in.
Thomas E. Perez, the assistant attorney general in charge of the Justice Department’s civil rights division, told a Congressional committee, “The more segregated a community of color is, the more likely it is that homeowners will face foreclosure because the lenders who peddled the most toxic loans targeted those communities.”
In need of a proof? The report cites, “During the post-World War II boom years, banks and real estate agents steered blacks to segregated neighborhoods, where home appreciation lagged far behind that of white neighborhoods.” Fast forward today, Wells Fargo has repeated the past: “Several state and city regulators have placed Wells Fargo Bank in their cross hairs, and their lawsuits include similar accusations. In Illinois, the state attorney general has accused the bank of marketing high-cost loans to blacks and Latinos while selling lower-cost loans to white borrowers. John P. Relman, the Washington, D.C., lawyer handling the Memphis case, has sued Wells Fargo on behalf of the City of Baltimore, asserting that the bank systematically exploited black borrowers. A federal judge in Baltimore dismissed that lawsuit, saying it had made overly broad claims about the damage done by Wells Fargo . City lawyers have refiled papers.”
This isn’t any new to followers of industry news but the fact that the last statements have proven that justice was denied among these pathetic homeowners is a wake up call to the government to prosecute bank officials who should be behind bars today.
Another report about racial concerns in the country comes from the Brookings Institution. It’s interesting to note that based on its State of Metropolitan America, an analysis of 2008-09 census data, suburbs now have more minorities since a “white flight” is currently observed in key areas – the first time that more than half of all racial and ethnic groups residing in large metro areas live in the suburbs.. It states, “At one extreme are slow-growing, black/white metro areas like Detroit with a longstanding pattern of racial and ethnic segregation. Today, more than four-fifths of residents in Detroit’s suburbs are white, compared to less than one-fifth of the city’s population… In fact, Atlanta and a few other cities experienced a somewhat new phenomenon in the 2000s—a gain in the share of population that is white. In Atlanta, whites increased from 32 percent of population in 2000 to 36 percent in 2008. Similar, though smaller, increases occurred in New York, Washington D.C., San Francisco, Boston, and primary cities in another seven of the nation’s 100 largest metro areas.”
This is a seminal output from the institution as it will guide most real estate developers and analysts on how the market in these cities must evolve to spur demand from people moving in. In the words of William H. Frey, a demographer at Brookings as reported by The Associated Press, “A new image of urban America is in the making. What used to be white flight to the suburbs is turning into ‘bright flight’ to cities that have become magnets for aspiring young adults who see access to knowledge-based jobs, public transportation and a new city ambiance as an attraction.”
Indeed, we should all watch out.