On Sunday, March 25, one of the Occupy activists asked whether it would be possible to map out foreclosure hotspots in Oakland. The maps below are preliminary results of my findings.
I got public data from the City of Oakland (light brown parcels), public data from Alameda County (light gray parcels), and foreclosure data from the San Francisco Chronicle. This map now shows the 5,187 parcels that were sold at auction between January 2009 and the end of February 2012.
I have exported the data to a PDF file so that you can see a lot-by-lot view, with street names. Caution! Please do not left-click on this link! The file is 16.5 MB. If your web browser is set to open and view PDFs by default, it may overwhelm your web browser and even cause your computer to lock up. Please download directly (right-click and select “Save link as…”), and then open the file with a PDF reader. Detailed information only becomes visible when you zoom in to 1000% (1500% preferably). It may take more than one minute for the file to open on your computer.
In my view, this is what GIS (geographic information system software) is for. I pray that this analysis is used for some form of social justice. Consider: 4% of the properties in Oakland were foreclosed between Jan 1, 2009 and Feb 29, 2012. That means 5,187 families were forced to move out of their homes. Conservatives, who claim to support family values, are still promoting the policies that have caused this humanitarian disaster. And it is highly racialized: the further southeast you go in Oakland, the higher the percentage of African-Americans. Both the proportion and absolute number of African-Americans in Oakland have been declining significantly over the past 20 years, and it is not voluntary. They are being forcibly displaced through the legal but unethical means of deregulated rents and deregulated mortgage lending.
Here are some summary arguments against deregulation and “free”-market policies:
1. Poorer American families often did not have access to regular mortgage-lenders for either initial purchases nor for refinancing of homes. Instead, sub-prime lenders entered “the poverty business” and loaned at far higher rates, variable rates, and ‘teaser’ rates with balloon-payments that were expected to default.
Why would lenders design loans that were expected to fail? Wouldn’t that be self-destructive for the lending agency, too? No, not after 1999, when the Republican-dominated Congress repealed part of the 1935 Glass-Steagall Act that separated deposit (savings & loan) banking from investment banking. Once this regulation was repealed, loans could be bundled (‘securitized’) into investment-instruments, and the risk could be passed through to investors. This is what Goldman-Sachs did: it sold mortgage-backed securities to AIG. The brokers at AIG assumed that the name of this financial product was self-descriptive: that the security was secure because mortgages are secure.
Thus, deregulation meant that the lender no longer bore the risk, and therefore could sell higher-risk, higher-profit mortgages. Those mortgages were designed to fail, which harmed both investors and the millions of American families who have been forced out of their homes. Notice! This is legal. What was not legal was Goldman Sach’s knowledge that it was selling financial products that it knew to be unsound. Their knowledge was demonstrated by their own purchase of insurance against defaults–Goldman actually profited from the 2007 mortgage crisis–and when the Obama Administration revealed this, Goldman promptly paid the $550,000,000 fine without complaint. In other words, the fine was too low; the corrupt practice was profitable enough to justify the penalty.
(source for most of this: Michael Lewis, The Big Short)
John McCain, in a radical departure from his fellow Republicans, wants to reinstate the portion of the Glass-Steagall Act that separates savings & loans from investment banking. However, other Republicans are still calling for more deregulation.
By the way: does anyone know of a time and place where deregulation actually did help promote economic growth? I know plenty of instances where highly-regulated economies have grown rapidly, such as the U.S. from 1935-1973, Scandinavia since 1925, South Korea, Hong Kong, and Singapore since the 1950s, and China and Viet Nam since 1978. When and where have deregulation actually helped increase overall wealth? Maybe India after 1991?
2. Conservatives now claim that banks were ‘compelled’ to lend irresponsibly to poorer families because of the Community Reinvestment Act of 1978. In fact the role of the CRA was precisely the opposite. The mandate of the CRA was quite narrow: banks had to provide credit in areas where they were taking deposits. In other words, poorer families were making money, and saving money, and depositing it in banks; but the banks would not offer loans in poorer, racial-minority neighborhoods. Unfortunately as a consequence of CRA banks chose instead to close up branches in urban neighborhoods with higher concentrations of minorities. So in fact few CRA-regulated banks were lending to poorer households in cities like Oakland during the Bush-era bubble.
(source: Elvin Wyly, 2010, “The subprime state of race.”)
To quote Wyly: “Challenging today’s inequalities requires a vigilant politics of measurement and mobilization. The new racial state operates by hiding in plain sight, obscuring racism by declaring the good intentions of lenders and the bad qualifications of consumers, by emphasizing technocratic financial details and the virtues of deregulated market discipline” (Wyly 2010:53). Amen, Elvin! This data counts as measurement. Since it was requested by members of Occupy Oakland, my hope is that it can be used towards further mobilization.