Untapped Resources: Can Immigrants Revitalize Decaying Neighborhoods?
Immigrants could hold the key to breathing new life into struggling communities.
It’s no secret that the real estate market leans heavily in favor of white men, as recent reports have revealed that mortgage lenders routinely discriminate against women and commercial real estate is a sea of whiteness. But now it seems that another minority group is suffering as a result of the industry’s blinkers.
According to a new study released October 2016 by the Fiscal Policy Institute and the Welcoming Economies Global Network, an immigrant-focused economic development group, immigrants could hold the key to breathing new life into struggling communities. However, land banks—quasi-government entities created to manage and repurpose an aggregated pool of abandoned and foreclosed properties—largely ignore this sector of society.
Indeed, the majority of Rust Belt cities, like Chicago and Detroit, play host to more immigrants who could qualify as homebuyers per capita than all other demographic groups. In Detroit, for example, the report showed that 209 out of 1,000 immigrant households could be eligible to buy a $50,000 home, a statistic significantly better than the 151 out of 1,000 US-born white households and 162 out of 1,000 US-born black households who also qualify for distressed home ownership.
In fact, the annual income needed to purchase one of Detroit’s many $50,000 distressed homes is just $25,000. However, 8,000 properties (one-quarter of the city’s real estate inventory) are held by the city’s land banks, and immigrants, faced with low or no credit scores and lacking the correct paperwork, face difficulty securing the mortgages needed to buy them. Ironic, seeing as immigrants have played a huge role in revitalizing struggling populations.
According to the Fiscal Policy Institute, between 1960 and 1980, 29 out of the 30 largest American cities have experienced dramatic population declines. Since 1980, however, more than 50% of these cities have seen population rebounds, with immigrants playing a pivotal role. Steve Tabocman, author of the report and director of Global Detroit, an economic development group focused on empowering immigrant communities in Detroit, agrees: “There isn’t a single great American city that has rebounded in population growth without immigrants,” he says. Those immigrants who go on to become homeowners bring tax revenues to cities and encourage economic growth.
There is, however, hope for these communities, and it comes in the form of people like Tabocman, who, along with Global Detroit, has been facilitating the process of purchasing of distressed homes for immigrants for the past year. All purchases the group have facilitated with have been for under $5,000, with the homebuyers fixing these dilapidated properties up with their own sweat equity.
It hasn’t been easy, however. Low-income, immigrant households often find it difficult to not only secure a mortgage but also find enough money for a down payment. Tabocman, however, is positive about the future.
“The efforts that encourage homeownership and/or vacant property purchase could yield significant returns by targeting immigrant groups.”
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