Community Development Banking List
10-14-2009, 01:58 PM
Original message from: tfeltner@woodstockinst.org
Chicago's communities of color face slower recovery from foreclosure
crisis, says new report
Lender-owned properties take 25% longer to sell than those in
predominantly white communities
CHICAGO-Vacant, lender-owned properties are concentrated in African
American communities, go unsold longer, and incur greater losses to the
lender, says a new report from Woodstock Institute entitled Roadblock to
Recovery: Examining the Disparate Impacts of Vacant Lender-Owned
Properties in Chicago (http://tinyurl.com/ybrybgt). ('http://tinyurl.com/ybrybgt).') As preliminary
signs of stabilization in the housing market begin to appear, there are
clear indicators that African American communities will have to address
the negative effects of foreclosure, such as property value declines and
increases in violent crime, far longer than predominantly white
communities.
The report, which looks at foreclosure auction results and subsequent
real estate transactions, found that 60 percent of vacant lender-owned
properties from 2007 and the first half of 2008 were located in African
American communities. These properties also sat unsold much longer,
taking 25 percent longer to be absorbed into the market than vacant,
lender-owned properties located in predominantly white communities.
As these properties sit unsold, they also lose significant value. When
comparing the amount owed to the lender to the price at which a vacant,
lender-owned property ultimately sold, lenders experienced greater
losses on properties located in African American communities than losses
in predominantly white communities. In African-American communities,
the average loss per property was 35 percent, compared to an average
loss of 17 percent in predominantly white communities.
"In Chicago, communities of color are shouldering the brunt of the
foreclosure crisis," says Woodstock Institute Vice President Geoff
Smith. "Interventions targeted at these communities, such as keeping
borrowers in their homes and properties in continuous productive use,
can potentially limit the impact of concentrated foreclosures and help
stabilize communities."
The longer a property remains vacant, the longer the community is
exposed to the negative effects of vacant properties. Previous
Woodstock Institute research has demonstrated that high concentrations
of foreclosures lead to declining property values of surrounding homes
and increases in violent crime.
The report also found:
* Vacant, lender-owned properties are concentrated in African
American communities. African American communities have 12.0 unsold
single-family vacant lender-owned properties per 1,000 properties. This
number is twice the city average and 7.5 times greater than that found
in communities that were predominantly white
* Vacant, lender-owned properties are taking longer to return to
productive use. For vacant, lender-owned properties that sold by the
end of 2008, the average time on market increased by 46 percent, from
172 days in 2005 to 251 days in 2007.
* In communities of color, properties are being absorbed a much
slower rate. In the first quarter of 2008, communities that are 80
percent or greater African American and communities that are at least 50
percent minority with mixed minority groups had the slowest rates of
absorption at 5.5 quarters (or 16.5 months) and 5.6 quarters (or 16.8
months), respectively. In contrast, predominantly white communities had
an absorption rate of 4.4 quarters (or 13.2 months).
Please contact Geoff Smith at 312-368-0310 or gsmith@woodstockinst.org
or Sarah Duda at 312-368-0310 or sduda@woodstockinst.org for more
information.
Roadblock to Recovery: Examining the Disparate Impacts of Vacant
Lender-Owned Properties in Chicago http://tinyurl.com/ybrybgt ('http://tinyurl.com/ybrybgt')
Related:
Foreclosure Fallout: An Analysis of Foreclosure Auctions in the Chicago
Region: http://tinyurl.com/yexea9g ('http://tinyurl.com/yexea9g') <http://tinyurl.com/yexea9g> ('http://tinyurl.com/yexea9g>')
There Goes the Neighborhood: The Effect of Single-Family Mortgage
Foreclosures on Property Values:
http://tinyurl.com/y9ylyr4 ('http://tinyurl.com/y9ylyr4') <http://tinyurl.com/y9ylyr4> ('http://tinyurl.com/y9ylyr4>')
The Impact of Single Family Mortgage Foreclosures on Neighborhood Crime:
http://tinyurl.com/ycdju7e ('http://tinyurl.com/ycdju7e')
###
Woodstock Institute works to create a just financial system in which
lower-wealth persons and communities of color can achieve economic
security and community prosperity. We realize this mission locally and
nationally by promoting fair lending, wealth creation, and financial
systems reform. Through applied research, policy development, coalition
building, and technical assistance, Woodstock Institute increases
opportunities for lower-wealth persons and communities of color to
safely and sustainably borrow, save and build wealth.
---
Tom Feltner
Policy and Communications Director
Woodstock Institute
29 E Madison Suite 1710
Chicago, Illinois 60602
312/368-0310 tel
312/927-0391 mobile
312/368-0316 fax
www.woodstockinst.org <http://www.woodstockinst.org> ('http://www.woodstockinst.org>')
Chicago's communities of color face slower recovery from foreclosure
crisis, says new report
Lender-owned properties take 25% longer to sell than those in
predominantly white communities
CHICAGO-Vacant, lender-owned properties are concentrated in African
American communities, go unsold longer, and incur greater losses to the
lender, says a new report from Woodstock Institute entitled Roadblock to
Recovery: Examining the Disparate Impacts of Vacant Lender-Owned
Properties in Chicago (http://tinyurl.com/ybrybgt). ('http://tinyurl.com/ybrybgt).') As preliminary
signs of stabilization in the housing market begin to appear, there are
clear indicators that African American communities will have to address
the negative effects of foreclosure, such as property value declines and
increases in violent crime, far longer than predominantly white
communities.
The report, which looks at foreclosure auction results and subsequent
real estate transactions, found that 60 percent of vacant lender-owned
properties from 2007 and the first half of 2008 were located in African
American communities. These properties also sat unsold much longer,
taking 25 percent longer to be absorbed into the market than vacant,
lender-owned properties located in predominantly white communities.
As these properties sit unsold, they also lose significant value. When
comparing the amount owed to the lender to the price at which a vacant,
lender-owned property ultimately sold, lenders experienced greater
losses on properties located in African American communities than losses
in predominantly white communities. In African-American communities,
the average loss per property was 35 percent, compared to an average
loss of 17 percent in predominantly white communities.
"In Chicago, communities of color are shouldering the brunt of the
foreclosure crisis," says Woodstock Institute Vice President Geoff
Smith. "Interventions targeted at these communities, such as keeping
borrowers in their homes and properties in continuous productive use,
can potentially limit the impact of concentrated foreclosures and help
stabilize communities."
The longer a property remains vacant, the longer the community is
exposed to the negative effects of vacant properties. Previous
Woodstock Institute research has demonstrated that high concentrations
of foreclosures lead to declining property values of surrounding homes
and increases in violent crime.
The report also found:
* Vacant, lender-owned properties are concentrated in African
American communities. African American communities have 12.0 unsold
single-family vacant lender-owned properties per 1,000 properties. This
number is twice the city average and 7.5 times greater than that found
in communities that were predominantly white
* Vacant, lender-owned properties are taking longer to return to
productive use. For vacant, lender-owned properties that sold by the
end of 2008, the average time on market increased by 46 percent, from
172 days in 2005 to 251 days in 2007.
* In communities of color, properties are being absorbed a much
slower rate. In the first quarter of 2008, communities that are 80
percent or greater African American and communities that are at least 50
percent minority with mixed minority groups had the slowest rates of
absorption at 5.5 quarters (or 16.5 months) and 5.6 quarters (or 16.8
months), respectively. In contrast, predominantly white communities had
an absorption rate of 4.4 quarters (or 13.2 months).
Please contact Geoff Smith at 312-368-0310 or gsmith@woodstockinst.org
or Sarah Duda at 312-368-0310 or sduda@woodstockinst.org for more
information.
Roadblock to Recovery: Examining the Disparate Impacts of Vacant
Lender-Owned Properties in Chicago http://tinyurl.com/ybrybgt ('http://tinyurl.com/ybrybgt')
Related:
Foreclosure Fallout: An Analysis of Foreclosure Auctions in the Chicago
Region: http://tinyurl.com/yexea9g ('http://tinyurl.com/yexea9g') <http://tinyurl.com/yexea9g> ('http://tinyurl.com/yexea9g>')
There Goes the Neighborhood: The Effect of Single-Family Mortgage
Foreclosures on Property Values:
http://tinyurl.com/y9ylyr4 ('http://tinyurl.com/y9ylyr4') <http://tinyurl.com/y9ylyr4> ('http://tinyurl.com/y9ylyr4>')
The Impact of Single Family Mortgage Foreclosures on Neighborhood Crime:
http://tinyurl.com/ycdju7e ('http://tinyurl.com/ycdju7e')
###
Woodstock Institute works to create a just financial system in which
lower-wealth persons and communities of color can achieve economic
security and community prosperity. We realize this mission locally and
nationally by promoting fair lending, wealth creation, and financial
systems reform. Through applied research, policy development, coalition
building, and technical assistance, Woodstock Institute increases
opportunities for lower-wealth persons and communities of color to
safely and sustainably borrow, save and build wealth.
---
Tom Feltner
Policy and Communications Director
Woodstock Institute
29 E Madison Suite 1710
Chicago, Illinois 60602
312/368-0310 tel
312/927-0391 mobile
312/368-0316 fax
www.woodstockinst.org <http://www.woodstockinst.org> ('http://www.woodstockinst.org>')