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Foreclosures take a heavy toll on predominantly black neighborhoods

This article first appeared in the St. Louis Beacon, Oct. 20, 2009 - On the first day of the month, Veronica Macklin watches for the economic indicator in her neighborhood that says more to her than the ups and downs of the Dow Jones:

She notes the number of U-Hauls on the streets of north St. Louis.

Macklin attributes the regular spike in moving activity to homeowners who have gotten foreclosure notices that their homes are on the auction block -- and to renters who can't afford next month's rent.

"My heart goes out to those who are in financial binds,'' said Macklin, 40, who grew up near Hickey Park, in a neighborhood of sturdy little brick homes built after World War II.

"We haven't seen anything yet,'' she added. "I'm more scared now than I've ever been. One day you see a house and people are there, and the next day they aren't.''

Macklin, a counselor in the Rockwood School District, lives in the one-story home she grew up in. She bought the house from her mother and stayed put, while many of her friends moved out of the neighborhood. About 90 percent of the residents of Macklin's neighborhood are African American, according to the U.S. Census Bureau.

"This is my home,'' Macklin said.

But she is worried about falling home values in her community, an area that has been hit hard by foreclosures.

In the month of September, 19 property owners who live in Macklin's ZIP code -- 63147 -- received some type of foreclosure notice, according to RealtyTrac, which tracks U.S. foreclosures. The list of bank-owned properties numbered 46.

To put it in perspective:

  • The foreclosure rate within the 63147 ZIP code area is 36 percent, nearly 10 percentage points above the national rate of 27 percent, according to RealtyTrac.
  • The rate is double the city's foreclosure rate of 16 percent and triple the state's rate of 12 percent.
  • The average foreclosure sales price in the 63147 ZIP code was $33,235.

Macklin said she has always been able to afford her mortgage because she lives within her means; it's the way she was brought up. But she was shocked when an appraisal of her property showed that it has dropped in value by thousands of dollars in recent months.
"It was ridiculous; I was in disbelief,'' said Macklin, who paid for several more appraisals before she accepted the new bottom line.

She is skeptical of recent economic forecasts that the recession is ending.

"Not in my ZIP code,'' Macklin said.

Impact of economic segregation

Macklin will believe the recession is over when she sees results. For now, though, residents of her neighborhood continue to lose their homes because of unemployment -- particularly, workers with limited skills and education who are being bumped by more experienced workers who were recently unemployed, she said.

"If you're not working, how are you going to pay the house note? How are you going to pay for a place to live? They are doubling-up and tripling-up with someone who still can,'' Macklin said.

The city's leaders need to invest in her neighborhood now while it is still "salvageable,'' she said. On her street, for example, she knows older residents who have owned their homes for decades. But there are also newer residents, primarily city workers and their families. Within blocks are foreclosed homes that stand abandoned and have become nuisance properties.

Todd Swanstrom, a public policy professor at the University of Missouri-St. Louis, says that one of the lasting legacies of historically segregated cities, such as St. Louis, is the economic disparity of the neighborhoods -- what he terms "economic segregation."

While all communities in the region have been touched by foreclosures and the recession, Swanstrom said, it is clear that the pain is deeper and more widespread in low-income and minority neighborhoods, where a majority of residents lack the safety nets and resources of middle-income Americans. Those neighborhoods are heavily concentrated in north St. Louis and some of the inner-ring suburbs.

"People who don't have assets and resources to fall back on really get hurt by unemployment, and we know there is a second wave of foreclosures related to unemployment,'' he said.

Today's economic segregation is a result of "place," Swanstrom said, and it can be traced to the blatant housing discrimination of the early 20th century. After the Supreme Court struck down the city's segregation ordinance in 1917, the real estate industry basically drew a line that limited where African Americans could buy homes.

"And those borders, which correspond in many cases to Delmar Avenue, still constitute the demarcation between black and white St. Louis and middle-class and poor St. Louis,'' he said. "We are still being influenced by that openly discriminatory and coercive set of policies that was shaping the market.''

Even after the fair-housing reforms of the 1960s, segregation remained embedded in the culture of the city, he said. While the white middle class moved to the suburbs -- along with a changing job market -- African Americans were left behind.

The city of St. Louis lost tens of thousands of industrial manufacturing jobs during the latter part of the 20th century due to globalization and the substitution of technology for labor, Swanstrom said. The deindustrialization of the economy took a heavy toll on the black working class, which had found decent paying industrial jobs, even though they were often excluded from higher-paid unionized jobs.

"You can go around St. Louis and see the abandoned factories,'' Swanstrom said. "Black workers were not able to follow the jobs out to the suburbs.''

The income disparity between the city and county remains telling: Per capita income in St. Louis was $16,108 in 1999, compared to $27,595 for St. Louis County, according to statistics from the U.S. Census.The legacy of Jim CrowEconomic segregation reinforces the poverty cycle because where you live influen

ces your success in school and your ability to get a job, Swanstrom said.

"There is evidence that being a poor person in such a neighborhood generates negative outcomes. It's less safe. There are no grocery stores. You pay more for retail goods. You have to go farther for retail goods. You don't have access to jobs. The stress of crime and other issues leads to other issues,'' he said.

While the white middle class can avoid living near the poor, data show that the black middle class is more likely to live close to the black poor -- another legacy of deeply embedded racial discrimination and housing patterns that prevent upward mobility, Swanstrom said.

"The government is not mandating it; there are no Jim Crow laws, but the black middle class is often not able to convert success in the job market into living into advantaged places,'' he said.

Swanstrom has studied economic segregation in a number of U.S. cities, including St. Louis. He says the solution lies in creating viable mixed-income communities, which would require a determined regional approach.

"It's not just a local problem -- because what happens is that the suburbs are sucking the life out of the older parts of the region and they zone out the poor,'' he said. "They try to attract only upper middle-income homeowners.''

Mary Delach Leonard is a veteran journalist who joined the St. Louis Beacon staff in April 2008 after a 17-year career at the St. Louis Post-Dispatch, where she was a reporter and an editor in the features section. Her work has been cited for awards by the Missouri Associated Press Managing Editors, the Missouri Press Association and the Illinois Press Association. In 2010, the Bar Association of Metropolitan St. Louis honored her with a Spirit of Justice Award in recognition of her work on the housing crisis. Leonard began her newspaper career at the Belleville News-Democrat after earning a degree in mass communications from Southern Illinois University-Edwardsville, where she now serves as an adjunct faculty member. She is partial to pomeranians and Cardinals.

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