Washington, D.C. – (RealEstateRama) — The Washington Post published a story about the lack of recovery among many African American neighborhoods in the Atlanta metro area since the worst days of the housing crisis in 2004. The paper’s investigation showed a direct correlation between race and the persistence of negative equity and “underwater” home values in African American neighborhoods, despite full recovery in comparable communities. Even Latino homeowners fared better than those living in predominantly black zip codes. In fact, some black communities had actually lost even more value than the drop they experienced during the height of the housing crisis.
‘“This isn’t a story anymore about the crash,” a Post source reports. “This is a story about what happened afterward, or what didn’t happen….If the recovery is happening in a way that really widens the gap in black-white housing wealth this… is going to be a problem for generations.”’
“Once the foreclosure crisis began, “ said Rep. John Lewis, “I knew that I would have to struggle to ensure that communities who needed assistance the most would get the support they deserved. I have sounded the alarm to federal and state agencies and even to the press with very little interest taken in this issue. I am glad the Post reported on it today. I never dreamed I would still be fighting this same battle in 2016.”
Beginning in 2012, Rep. Lewis recognized that foreclosure mitigation assistance was not reaching homeowners in his district who needed it the most, and he focused on two initiatives that were missing the mark. First, he led a delegation-wide effort to raise awareness about the problems with the Hardest Hit Funds program. He communicated with the White House, the Treasury Department, and the state government about the fact that millions in federal funding slated for homeowner assistance were stuck in the pipeline in Georgia, not reaching parts of his district that needed help the most.
Additionally, Rep. Lewis requested and secured close to $100 million of extra foreclosure mitigation support from the National Recovery Foreclosure Settlement. Despite his protests, those funds were diverted by the governor to support small business in another region in the state. These foreclosure dollars never reached the communities they were meant to serve.
“I have been fighting to get someone to shed light on this issue for years,” said Rep. Lewis. “I am glad the Post finally did. But federal programs and state disbursement only represent a part of the problem. Appraisers, real estate agents, and mortgage companies also need to be held accountable for undervaluing these properties. A home is the most important investment most families will ever make.
“If that major asset is undervalued, it becomes difficult for them to refinance, send their children to college, make home repairs, and sell their homes for what they are truly worth. This also affects the tax base of a community, which impacts funding for schools, roads and other tax related resources. This is how communities fall into disrepair based on under valuation that suppresses the tax dollars available, and it leads to neglect.
“This month I was previously scheduled to meet with Treasury’s Inspector General on this issue. But I am going to be communicating with the committees of Congress that have jurisdiction over this matter to see whether a hearing can be called on this topic before the end of this session. Some have called on communities of color to ‘be more responsible’ and have characterized them as ‘takers’. But these families are being responsible. They have bought into the American dream.
“Some of the negatively assessed homes are those of middle and working class professionals who are not asking for anything but fairness and equal treatment. Isn’t it enough that half of all African American wealth was lost in this crisis and few were held accountable? It seems to me the dynamic is not between the ‘givers’ and the ‘takers;’ it’s between the ‘takers’ and the ‘taken from’.”