Role of the Real Estate Sector in Neighborhood Change

摘要

The role of the real estate sector (brokers, agents, appraisers, lending institutions, and government mortgage insurance programs) in the early stages of racial change and general decline in neighborhoods is examined. Study and control neighborhoods were investigated in Norfolk, Va., Rochester, N.Y., and Dayton, Ohio, all of which were marginally or centrally affected by racial change. In the objective indicators of decline, only two neighborhoods evidenced consistent patterns. In one Dayton neighborhood, the signs were pervasive -- negative consumer attitudes, high unemployment levels and crime rates, and greater welfare caseload totals and relative property value decline than in other areas. In the other neighborhood, a section of Rochester, decline was evident in rising unemployment levels, conversions from owner to renter occupancy, and physical deterioration of housing. The real estate market pattern was keyed to consumer behavior and was deeply rooted in racial perceptions. While the lender perceived greater risks in the study neighborhoods, the real estate agent was the key actor in directing buyers to Federal Housing Authority or Veterans Administration financing rather than conventional loans. Race may have been a contributing factor in determining the type of mortgage, but cases of overt discrimination could not be isolated. Rochester real estate actors played an important role in reinforcing and perhaps accelerating the downward spiral of decline by overreacting to the forces of change and magnifying the signals of decay. Case studies of the cities and neighborhood dynamics, a discussion of real estate practices, and sections on long - term financing and real estate sector perceptions, interactions, and information flows are provided. Appendices contain study data.