“Buy it, let him stay, charge him rent,” shrugged the friend. “Tell him if he misses a month you’ll kick him out.”
City Limits Magazine
The group was waiting for a foreclosure auction to begin, as it does each Thursday afternoon in the cavernous jury-selection room of Brooklyn’s Supreme Court. There, small-time realtors and investors--mostly young immigrant or ultra-orthodox Jewish men--bid on houses people like the screaming guy lost because they couldn’t make their mortgage payments. The auctions have been going on for years in the boroughs. But lately, more homes are headed for the block. Totals for 2003 aren’t in yet, but preliminary data compiled by the Furman Center for Real Estate and Urban Policy indicate that foreclosure claims in Brooklyn rose from 2,629 in 2001 to 2,970 in 2002--an increase of about 13 percent. During the same period, the Bronx saw a 27 percent increase: from 915 claims to 1,164.
One reason for the rise in foreclosures seems to be the economic downturn that began needling New York City in early 2001 and then stabbed with a vengeance after 9/11. According to statistics compiled by the Community Service Society, the increase in joblessness is steepest among blacks and Latinos, particularly men without college educations who do blue-collar, clerical or administrative-support work.
During the national economic boom of the 1990s, many in this demographic saved enough money to buy homes for the first time. Some purchased one-family dwellings; others chose multiplexes where they could live but also get tenants to help pay the mortgage.
These were fat years even for struggling neighborhoods. During the 1980s and early 1990s, the New York City Housing Partnership, Neighborhood Housing Services, and other groups worked with the government and banks to build and rehab affordable housing for sale to lower-income buyers, and to help those buyers obtain mortgages. The groups aimed to revitalize neighborhoods by helping people with modest incomes achieve financial independence. Home equity, the thinking went, would create stable individuals in settled, prosperous communities.
The Jeffersonian ideal of property ownership has always loomed large in the nation, and it was boosted when President Clinton set a goal to raise the national homeownership rate to 67.5 percent by the millennium. Today, 68 percent of American households own their homes. HUD wants to raise that rate two points in the next three years, as well as bring homeownership rates among minority households up to the same level as whites’.
But lately, hoary ideals have brushed against a bad economy. Since New York’s recession began over two years ago, many homeowners and their tenants have had work hours cut, or been laid off altogether. According to the New York State Department of Labor, since May 2001, unemployment in Brooklyn has gone up from 5.7 to 9.1 percent. In the Bronx, it has shot from 6.2 to 10 percent.
Housing counselors say they’re seeing more people of modest income who have missed mortgage payments and gone into default or foreclosure. At Neighborhood Housing Services, Ken Davis, director of the agency’s Foreclosure and Predatory Lending Prevention program, says that since early 2003, his office has been doing foreclosure counseling for 10 or 15 more clients each month than it used to. “It’s a 25 to 50 percent increase,” notes Erskine Kennedy, a coordinator with the same program.
