Photos

How Banks Are Still Discriminating Against Minorities in the Foreclosure Crisis

They're doing a much better job of maintaining and marketing foreclosed homes in white neighborhoods.

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National Fair Housing Alliance

The foreclosure crisis has had a second set of less visible victims: people who never lost their homes (nor are in danger of it) but who live near others who have. These are the neighbors left behind in communities where seemingly every third house has been abandoned. They're the people who deal with adjacent lawns that never get mowed, with houses visible through their front windows that are decaying by the day.

They're the ones left to worry about falling property values and absentee banks. And, fair housing groups allege, these people are disproportionately located in predominantly minority communities across the country.

We've written before about evidence of racial discrimination of a different kind in the mortgage crisis, a subplot suggesting that big banks intentionally targeted minority communities with bad loans before the bubble ever burst. Now, housing advocates have been documenting what they view as racial discrimination in the aftermath: Bank of America in particular, the National Fair Housing Alliance says, has been doing a much better job of maintaining and marketing foreclosed homes for sale in white neighborhoods than in minority ones.

A foreclosed home (left) in a predominantly Hispanic neighborhood in Las Vegas, and a predominantly white one (right).

A year ago, the alliance and several of its member organizations filed a complaint against the bank with the Department of Housing and Urban Development, arguing that the bank had violated the federal Fair Housing Act by neglecting foreclosed properties in minority communities in Denver, Atlanta, Miami, Dayton and Washington, D.C. Today, the groups amended their complaint with a stack of evidence – in maps, data, and photos – showing that the problem has persisted in each of those cities, while documenting it anew in Memphis, Denver, Las Vegas, Tucson and Philadelphia.

In total, housing advocates have now identified the problem in 18 metropolitan areas, across 621 Bank of America properties.

"It is as if Bank of America is purposefully looking the other way when they see [bank-owned properties] in communities of color," Keenya Robertson, the CEO of Housing Opportunities Project for Excellence, said in releasing the new complaint.

Investigators with housing organizations in each city visited Bank of America-owned foreclosures in predominantly black and Hispanic zip codes in each city, as well as in predominantly white areas. They were looking for obvious indicators like whether a "for sale" sign was mounted on a property (no one will buy it, after all – or know where to make complaints about its eyesores – if they don't know the house is for sale). But the investigators also looked for more than three-dozen individual deficiencies, including trash and mail accumulated on the curb, broken windows or locks, water damage, missing gutters, peeling paint and graffiti.

What they found: a rotting dog carcass in a Las Vegas back yard, beer bottles on the steps of an empty Denver home, and doors left wide open on a Tucson property, all in minority communities. In Memphis, none of five homes in minority communities even had for-sale signs on them. The same was true for 14 out of 15 homes in Latino communities in Tucson, and in 14 of 18 homes in minority communities in Philadelphia.

Here is a home in a predominantly black community (left) and one in a predominantly white one (right) in Atlanta:

The yard of a home in a black neighborhood in Dayton:

And the recently mowed lawn of a home in a white neighborhood in Dayton:

In a largely Latino neighborhood (left) and a majority-white (right) neighborhood in Dallas:

The back view of these same two homes:

A home in a black neighborhood in Chicago where inspectors counted 17 deficiencies (left) compared to one in a predominantly white part of Hanover Park, Illinois, where there were three visible deficiencies with the property (right):

Some people may argue that homes like the one at left above were in worse condition before banks even foreclosed on them, by virtue of their location in lower-income communities. For context, here are the occupied neighboring homes on either side of that Chicago house:

The sample size in each city varied, from about a dozen properties to more than 44 of them in Denver. But across all of the cities, homes in minority communities were two times more likely than those in predominantly white areas to have more than 10 maintenance or marketing problems. In Denver, homes in minority neighborhoods were 9.3 times more likely to have a broken door or lock. In Las Vegas, they were 4.5 times more likely to have damaged windows. In Philadelphia, they're twice as likely to have accumulated substantial amounts of trash, relative to homes in white neighborhoods in the same market.

The pattern suggests yet another way that subtle housing discrimination may further handicap the ability of minority communities to recover from the housing crisis (or, put another way, this suggests why the effects of the recession will linger in minority communities for much longer). Federal fair housing law prohibits actions (or attempts at action) that "perpetuate, or tend to perpetuate, segregated housing patterns," or that obstruct the choices in a community or neighborhood. It's not hard to envision how these neglected homes could wind up doing just that.

Update: In responding to the National Fair Housing Alliance's complaint, Bank of America said in a statement today that it "applies uniform practices to the management and marketing" of vacant bank-owned properties across the country, and that "any suggestion to the contrary is simply untrue." From their statement:

Previous claims by NFHA revealed numerous, material flaws in their methodology and how they represented that information publicly.  The majority of properties NFHA faulted us for were, in fact,  the responsibility of other entities to maintain and market, didn’t take into account the property condition at the time we had authority to maintain it, and included properties the bank had agreed to donate to local groups in their existing condition.

Top images from a home in Memphis, and all others, courtesy of the National Fair Housing Alliance.

About the Author

  • Emily Badger is a former staff writer at CityLab. Her work has previously appeared in Pacific StandardGOODThe Christian Science Monitor, and The New York Times. She lives in the Washington, D.C. area.