Community groups take on housing crisis
OAKLAND, Calif. — As she led dozens of neighbors, ACORN activists and journalists on a walking tour of the East Oakland working-class neighborhood where she has lived for nearly 40 years, Fannie Brown surveyed the rows of mostly single-family homes.
“Down the street, as you can see,” the community activist and ACORN leader told the group, “we have houses that have been boarded up. Next we will go to my street, and we will see all the abandoned houses that have been foreclosed on, all the places that are up for sale. When we walk through the community, it’s really sad.”
ACORN (the Association of Community Organizations for Reform Now) has been working with struggling homeowners and mortgage lenders for the last two years to prevent foreclosures and restructure loans so they are affordable. Oakland ACORN’s May 7 “reality tour” coincided with actions in other communities around the country.
Nationally, one in 33 current U.S. homeowners could be in foreclosure, mostly
in the next two years, as a direct result of subprime loans made in 2005 and 2006, according to a study recently released by the Pew Charitable Trust. Among the hardest hit, the study found, are Nevada with 1 in 11 homeowners threatened by foreclosure, California with 1 in 20, Florida with 1 in 26, and Georgia with 1 in 27.
It is estimated that over 40 million more homes will lose value because of subprime foreclosures in their communities, with losses possibly reaching $356 billion in the next couple of years, Pew said. Lenders lose too, with foreclosure losses ranging from 20 cents to 60 cents on the dollar.
The Center for Responsible Lending has pointed out that African American and Latino homeowners, and the neighborhoods where they live, are suffering “a disproportionate share of the harm.” Over half of African American families and 40 percent of Latino families receiving home loans get higher-cost mortgages, mostly subprime loans, the center said.
Millions of rental tenants in foreclosed buildings also face eviction or other hardships, even when their own rents are paid up.
In an increasingly bipartisan effort, legislators at all levels are seeking to aid distressed homeowners. Last week the House of Representatives passed a measure introduced by Rep. Barney Frank (D-Mass.) to provide up to $300 billion in federally insured loans to refinance mortgages of struggling homeowners. The vote was 266-154, with 39 Republicans in the “yes” column. Another measure by Rep. Maxine Waters (D-Calif.), would allocate $15 billion to states to buy and refurbish foreclosed homes. It passed 239-188, with support from 11 Republicans. But neither margin could override an expected Bush veto.
At the state level, New York’s state Assembly has passed a one-year delay in foreclosures, while the state Senate is considering a bill for a two-month delay. Michigan legislators have introduced a bill to let courts provide a two-year stay on a foreclosure. California’s Senate just passed a bill giving homeowners new ways to avoid foreclosure and helping protect tenants when their homes are sold.
Within a few blocks of Brown’s home, over 120 houses have been vacated in the last year and a half, she said, gesturing toward boarded-up homes with weed-strewn yards.
“I’ve lived here since 1971, and I remember when this whole street was full,” she added. “I have six adopted children; five of them still live at home with me — that’s why I’m very concerned about the community.”
Nor are foreclosures the first economic crisis to strike the area. Forty years ago, Brown said, most people in the neighborhood worked in nearby industries: canneries, bakeries, glass companies and the like. As these industries closed many earlier residents were forced to move. Residents are now mostly Latino and African American.
Brown and her fellow ACORN activists had prepared a list of recommendations for the city and the federal government, to reclaim the abandoned homes. Among them: funding for a Community Land Trust program under which vacant properties could be reclaimed as affordable home ownership units, whose new owners would pledge to sell the units back to the land trust when they decided to leave. Other recommendations included curbing problems such as loitering and drug use, and measures to require banks to maintain foreclosed properties.
City Councilwoman Desley Brooks, and Josie Camacho, the mayor’s director of constituent services, expressed their support to the group. “People are being displaced, and it tears at the fabric of our community when we allow this to happen,” said Brooks. Camacho said Mayor Ronald Dellums is committed to working with the community, city council members and other elected officials on the challenges posed by the crisis.
The mayor and other area elected officials have already been active with resource fairs and other assistance to homeowners threatened with foreclosure, and are developing new ways to bring lenders and homeowners together. The City Attorney’s Office operates a referral hotline, while a pioneering Neighborhood Law Corps program helps fight illegal actions in housing as well as other fields.