The Wall Street Journal, October 29, 2020, Death of Credit Starves Detroit’s Housing Market
In 2013 Detroit filed for bankruptcy which led to a very slow comeback following the years proceeding. While non-profits, governments, and corporations are working to channel money back into the local neighborhoods, the economic impact has disproportionately affected the Black community. Black residents have been stated to be shut out of access to financing and therefore have been shut out of the opportunity to build wealth due to not being able to be a homeowner with a mortgage.
Detroit is making a comeback after years of decline that led to a bankruptcy filing in 2013. But large swaths of the city are left behind, starved of the housing credit needed to revive them. No purchase mortgages were made last year in almost a third of Detroit’s census tracts, and fewer than five each in another third, according to data from LendingPatterns.com, a mortgage-data analysis tool.
The impact runs disproportionately along racial lines in the majority Black city. Detroit’s Black residents are largely shut out of access to financing, making it tougher to attain homeownership, the key to building wealth for most Americans.
Nonprofits, governments and corporations are trying to channel money back into the city’s neighborhoods. But making mortgages in Detroit is a convoluted task. The dearth of credit is largely a consequence of battered property values plus a commercial reality that depresses them further: Lenders can’t earn money on tiny mortgages, so they don’t make them.