Do you think the Occupy Wall Street movement will have any impact on the housing market?
- No. (64%, 99 Votes)
- Yes! (19%, 30 Votes)
- Maybe if it were better organized. (17%, 26 Votes)
Total Voters: 155
The right to fair housing for all in America is a relatively new development in our nation’s history.
Until the late 1950s, the code of ethics for the national real estate trade union insisted that real estate agents ought not advertise or sell homes in white neighborhoods to individuals of any other “race or nationality,” lest they compromise property values and diminish the standard of living.
Federal Housing Administration (FHA) underwriting guidelines mandated institutional redlining practices, directing underwriters to ensure properties were occupied by members of the same racial and social classes in order to maintain neighborhood stability.
It was not until the late 1960s, at the apex of the Civil Rights Movement, that these discriminatory practices in the public and private housing sectors were fully addressed and eliminated. Born from the successes of America’s most powerful and significant social movement, government protected rights to fair housing were canonized in the Federal Fair Housing Act (FFHA), the Equal Credit Opportunity Act (ECOA) and the Community Reinvestment Act, to name a few.
As civil rights became a sacred fiber in the fabric of America’s social contract, and the nation’s housing policy proliferated, home sales volume grew steadily and led to great prosperity in the housing industry for the following thirty years or so. That is, until now. [For a critique of U.S. housing policy, see the March 2011 first tuesday article, The home mortgage tax deduction: inducing debt and stifling mobility.]
The great fair housing movement of the 1960s was certainly a step in the right direction for protecting everyone’s right to shelter in America, regardless of race. However, the efforts of activists, civil rights leaders and legislators were quickly subsumed into the money-making machine by lenders and the Wall Street rentiers. [For more information on the rentier class, see the September 2011 first tuesday article, Rentiers and debtors: why can’t they get along?]
Fair lending for all, coupled with a robust federal housing policy, merely meant more grist for the lenders’ mill and thus more opportunities for profit. While members of minority groups began borrowing and buying homes at rates equal to their white, middle-class counterparts, the loans were more expensive and highly predatory.
In 2006, at the height of the subprime lending practices that created the housing bubble, 52.9% of black homebuyers financed their purchase with a subprime mortgage, 47.3% of Hispanics went leveraged with a subprime loan while a mere 26.1% of white homebuyers purchased a home with subprime financing. [Data courtesy of the Joint Center for Political and Economic Studies.]
Thus, the last 30 years of “fair” housing policy culminated in a bubble fueled by a covert and systemic form of discrimination vis-à-vis predatory loans of the adjustable rate mortgage (ARM) and subprime variety. One could say the victories of the Civil Rights Movement in America and the Federal Fair Housing Act have been effectively neutralized by rentiers’ exploitative efforts to extract as much profit as possible from everyone, especially rising minorities.
This is the “fairness” the housing industry currently operates under: equal exploitation for all.
Now, with Occupy Wall Street (OWS), we have another social movement on our hands that has the potential for changing the landscape of the housing industry and creating a new age of fair housing. This vision of fair housing is based on the fundamental notion of equitable shelter for Americans at a fair price (including the financing) without the profligate speculation and profiteering from greedy Wall Street investors.
As one of the OWS protestor’s signs read, Stop speculating on our homes!
first tuesday take: Whether or not the OWS movement has discernable goals or definable demands, one thing is clear: they are sending a message that they have wised-up, they are mad as hell and they are not going to take it anymore.
The Civil Rights Movement of the 1960s changed the landscape of the real estate market forever due to a dramatic paradigm shift in the notion of fair housing. OWS deserves a closer look by real estate professionals as it may well be another catalyst for change of epic proportions.
If it is, it will be crucial for brokers and agents to understand the political victories of the OWS protestors to better serve the homebuyers of tomorrow. [For first tuesday’s take on real estate trade union involvement in the OWS movement, see the October 2011 first tuesday article, Unions occupy Wall Street — where are the Realtors?]
re: “Occupy Wall Street: A New Wave of Fair Housing Activism?” from the Huffington Post