Daniel J. Hammel

Islands of decay in seas of renewal: Housing policy and the resurgence of gentrification

Abstract For many observers, the recession of the early 1990s signaled the end of what Berry called islands of renewal in seas of decay. In the past decade, however, shifts in mortgage finance have intersected with developments in assisted housing to alter the links between gentrification and housing policy. In this article, we use field observation, Home Mortgage Disclosure Act data, and HOPE VI plans to analyze the resurgence of gentrification in eight U.S. cities. Between 1992 and 1997, gentrified neighborhoods attracted conventional homepurchase mortgage capital at a rate that grew at more than 2.3 times the suburban rate. Logit models confirm that mortgage capital favors gentrified neighborhoods even after controlling for applicant and loan characteristics, suggesting a new relationship between mortgage lending and neighborhood change. In some cities, gentrification has surrounded islands of decay and poverty with landscapes of renewal

Cities Destroyed (Again) For Cash: Forum on the U.S. Foreclosure Crisis

In 2008, there will be at least 2.5 million new foreclosures in the United States. Record levels of mortgage delinquency, default, and foreclosure are causing widespread hardship in cities and suburbs across America, and causing repeated destabilization of global credit and investment markets. In this Forum, six housing specialists unravel the complex connections between urban geography, subprime lending, and foreclosure. Although a wide variety of view-points are represented, three common threads are evident. First, foreclosures are tightly linked to the lax underwriting standards and aggressive business practices of the subprime mortgage market. Second, the subprime-foreclosure linkage is a reflection of the steady deregulation of U.S. financial markets and the promotion of homeownership as the cornerstone of national housing policy. Third, deregulated mortgage market segmentation has created uneven new geographies of debt, risk, and default—superimposed atop existing landscapes of old-fashioned exclusionary discrimination. Low-income and racially marginalized neighborhoods, once redlined and excluded from mainstream credit markets, were at the center of the profitable wave of subprime abuse and equity extraction during the long housing boom, and are now at the center of the long, slowly unfolding catastrophe of the U.S. foreclosure crisis.

A MODEL FOR IDENTIFYING GENTRIFIED AREAS WITH CENSUS DATA

Empirical research on gentrification suffers from a dichotomy between richly detailed neighborhood case studies and macro-scale, census-based analyses, perpetuating uncertainty over the extent and timing of gentrified areas in American cities. We develop a model relating tract-level census statistics to the results of a detailed field survey of 24 census tracts in Minneapolis-St. Paul. We use stepwise and canonical discriminant analysis to select nine variables distinguishing gentrified neighborhoods and to classify all central-city tracts for each decade between 1960 and 1990. Results indicate a moderate level of overall accuracy, and the model is more than 90% accurate in distinguishing areas of heavy reinvestment from stable, middle-class districts. Compared with other techniques, our approach more accurately distinguishes gentrification from other types of inner-city redevelopment, providing a useful tool for identifying the phenomenon with a measurable degree of precision.

Has mortgage capital found an inner‐city spatial fix?

Abstract For two generations, urbanists have analyzed how residential mortgage lending reflects and reinforces inner‐city inequality. Yet the basic dichotomies of this literature have been eroded by parallel developments in community organizing, public policy, and restructuring of financial services. Securitization, institutional structure, and increasingly sophisticated market segmentation have altered the relationship between mortgage capital and the inner city, redrawing patterns of exclusionary redlining into more complicated, stratified inclusion into prime and subprime reinvestment flows. In this article, we analyze lending dynamics in neighborhoods at the nexus between gentrified reinvestment and enduring poverty in 23 large U.S. cities. A strong, sustained resurgence of capital investment is woven together with enduring racial‐ethnic exclusion that cannot be blamed on borrower deficiencies. Institutional restructuring and secondary‐market linkages reinforce newer class and racial‐ethnic inequalities through subprime segmentation: Lenders’ willingness to serve black borrowers, for instance, is becoming closely associated with subprime specialization.

Re-establishing the Rent Gap: An Alternative View of Capitalised Land Rent

The debate between the proponents of the rent gap hypothesis and Steven Bourassa concerning its internal consistency centres on the role of land use in capitalised land rent. Bourassa argues that capitalised land rent is nonsensical because it is determined in part by land use which is in conflict with land rent theory. The paper explores the determinants of capitalised land rent by reviewing the rent gap hypothesis and related research, and argues that the issue of scale is implicit in the rent gap. Land rent can be determined at a minimum of two scales resulting in at least two different land rents. This argument rectifies Bourassas contentions, and is consistent with the theoretical foundations of the rent gap.

Capital's Metropolis: Chicago and the Transformation of American Housing Policy

The US economic recovery of the 1990s accelerated amidst privatization, selective devolution and the reinvention of the public sector itself. Simultaneously, mortgage finance and assisted housing policy were recast in terms of market processes, individual responsibility and private home‐ownership, even as gentrification enjoyed a dramatic resurgence. The intersection of these seemingly unrelated processes signifies an important transformation of the American inner city. Nowhere are these connections more explicit than in Chicago, where newly devolved and flexible policy infrastructures are built on the ashes of prominent experiments of previous generations. In this paper we use Chicago as a context to explore the linkages between reinvestment, housing finance and the reinvention of assisted housing. We analyse local and federal developments in assisted housing policy and develop a multivariate analysis of mortgage loans in Chicagos neighbourhoods during the 1990s expansion. New constructions of scale in assisted housing, exemplifed by Chicagos Lake Parc Place and the federal HOPE VI programme, constitute a centripetal devolution mediated by the relationship between public policy and local private market forces. National changes in housing finance have altered historical processes of redlining, disinvestment, and gentrification. Mortgage capital, traditionally responsible for the creation or exacerbation of rent gaps, now lubricates the flow of capital into the gentrifying frontier of the inner city. The intensified market discipline of housing policy, based partly on theories incubated in Chicago, suggests a new regime of neighbourhood change in the American inner city.

GENTRIFICATION AND LAND RENT: A HISTORICAL VIEW OF THE RENT GAP IN MINNEAPOLIS

The rent gap theory has been a prominent explanation of gentrification for nearly two decades. It has been subject to much critique, but few empirical analyses. This research, based in Minneapolis, attempts an empirical evaluation of the hypothesis using land price data in nine redeveloped parcels over a span of 130 years. While the rent gap appears to exist in most parcels, a simple one-to-one correspondence between the gap and gentrification cannot be made because of the nature of the theory and the limitations of the data. There is evidence, however, that rent gaps may form not just in declining areas, but in stable poorer areas when there is substantial capital investment on the urban fringe. This finding lends support to the theorys emphasis on the role of uneven development in the creation and eventual closure of the rent gap.

Low- to Moderate-Income Lending in Context: Progress Report on the Neighborhood Impacts of Homeownership Policy

Abstract This article presents an interpretive progress report on the neighborhood‐level effects of homeownership policy. The expansion of targeted lending initiatives has created unprecedented opportunities for ownership among low‐ to moderate‐income (LMI) families, racial and ethnic minorities, and other populations once excluded from the nations mainstream housing finance system. The article uses a two‐stage strategy to provide a more accurate progress report on efforts to expand LMI homeownership. First, it uses home‐purchase data for the 40 largest metropolitan regions to identify a set of “best‐case” neighborhoods that experienced the greatest quantitative increase in LMI lending during the middle 1990s. Second, it assesses the nature of these places qualitatively. The approach allows one to evaluate the degree to which increased LMI lending provides genuine opportunities for affordable homeownership—or unleashes other processes that conflict with the goals of affordability and sustainable neighborhood development.

Complexity and Change in the Foreclosure Process in Toledo, Ohio

This paper analyzes the characteristics of foreclosure cases in Lucas C ounty, Ohio, from 2004 to 2008. We use a rich source of secondary data to track foreclosure filings through the legal process to their ultimate result in either the loss of a home or the dismissal of the case. We supplement the secondary data with interviews from officials involved in the process and with a discussion of the changes that have occurred during the foreclosure crisis. Our analysis suggests that the process has accelerated slightly despite the increase in cases and that basic interventions have substantially reduced the number of foreclosure filings that eventually result in the loss of a home. Unexpectedly, the characteristics and results of the process seem to vary little across income categories and neighborhoods. In addition, while most foreclosure cases are straightforward in a legal sense, there is evidence of larger trends that are introducing increasing complexity into the process.

Strands in the Neoliberal Web: Linking Foreclosures, Health and Employment

Libman, Fields and Saegert have provided an interesting and thoughtful overview of the interrelationships between the personal sufferings caused by the recent housing crisis and its health effects. Based upon a series of intensive interviews and focus groups conducted in various areas around the US, this research provides an insight into the extraordinary difficulties faced by many individuals and families caught up in the mortgage crisis and how those difficulties both led to and stemmed from health issues. The primary contribution of this research is that it provides an entry point to understanding the on-the-ground effects of a web of neoliberal policies that have had such a substantial impact on low and moderate income families. The authors also provide a thorough and useful review of relevant literature with a particular focus on the health related effects of stress due to debt and foreclosure. Given that this literature is probably not well known by many housing scholars, this is a particularly useful part of the paper. There are also some significant limitations to the research which the authors identify reasonably well, but that prevent the work from providing more than an entry point to the issues of housing, health and neoliberal policy. I will elaborate on these limitations in more detail, but first I will concentrate a bit more on the strengths of the paper. While the literature on foreclosure is expanding at a rapid pace, it is still rare to find high quality qualitative work that gives voice to the concerns of those who have gone through or are going through the foreclosure crisis. This research stems from a project that provides just such a voice. In particular, previous work from the project has provided compelling arguments that shed light on the substantial difficulties that those seeking help from servicers or financial institutions face (Fields, Libman & Saegert 2010). From a methodological perspective the work is quite strong. The authors avoid the temptation to generalize excessively from their results and provide carefully worded and limited interpretations. While this is at times