Fresh Loaf

In late 2007, Georgia Tech professor Dan Immergluck released a study that added numbers to a sneaking suspicion: Property taxes were rising fast along the southern half of the Beltline, the 22-mile loop of parks, trails and transit planned to circle Atlanta’s urban core, and posing a problem for longtime residents unable to afford the uptick.

The study served as a reminder that for all its promises of parks, streetcars and smart-growth development, the Beltline could potentially cause displacement and gentrification — and have a negative impact on the neighborhoods the project is designed to help.

Immergluck’s followed up the study with Foreclosed!, a new book about the origins and aftershocks of the nationwide housing market meltdown.

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D.L. Bennett of the AJC has an article that addresses what many of us have assumed — the intown building boom is hitting the skids. The rush to build homes to welcome the influx of new residents was broadsided by the foreclosure and credit and resulted in shuttered-up houses and dwindling property values.

Says Ben at Terminal Station:

The combination of factors hitting these areas is brutal.  First, all the subprime mortgages that got people into these homes in the first place reset and foreclosures follow.  Housing prices plummet, and you might think there would be a wave of people who could get into some infill homes for a great price.  However, tighter credit standards are going to prevent people from getting loans, and the cratering economy will further depress things.  So these homes will just sit empty for who knows how long.

The city has received $12 million to buy foreclosures, but it will barely make a dent in the problem. I don’t really know what sort of policy solutions are available. There needs to be an infusion of capital somewhere to buy these houses and get them occupied. I know some folks who are buying up cheap houses (~$30k), renovating them, and renting them to people with Section 8 vouchers. The problem is that this is not a recipe for revitalization. Instead, it can become a recipe for concentrated poverty and can prevent new residents from wanting to move in. I’m not enthusiastic about an infusion of capital of this sort, but it is probably the only sort of private capital available.

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A Nation investigative report focuses almost entirely on the loss of black wealth in Atlanta due to unscrupulous tactics by lenders and their vassals at the Gold Dome. The article states:

Nearly 18,000 homes faced foreclosure in the Atlanta area during the first quarter of 2008, an almost 40 percent jump from the first quarter of 2007. In Fulton County, which encompasses most of the city’s core and is heavily African-American, one in 122 homes was in foreclosure in the first week of April. …

… for black America, the “mortgage meltdown” looks less like a market hiccup than a massive strip mining of hard-won wealth, a devastating loss that will betray the promise of class mobility for tens of thousands of black families. As the mortgage crisis unfolded, observers of all political stripes repeated a boilerplate line: the “affordability products” that have flooded the lending market in recent years — from subprime to interest-only loans — have done more good than bad by fueling a surge in black and Latino homeownership. But while minority homeownership may have grown in the short term, the long-term outlook promises quite the opposite, as southwest Atlanta painfully illustrates.

First-time homebuyers have originated less than a tenth of all subprime loans since 1998, according to a 2007 Center for Responsible Lending analysis. As recently as 2006, just over half of all subprime loans were refinances of existing home loans. The expected foreclosure toll from these loans will outpace the ownership gains by nearly a million families, the center estimates.

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