What’s Kept Black Families Out Of Atlanta’s Housing Market

Stephannie Stokes / WABE

When it comes to the falling rate of homeownership, the discussion usually focuses on millennials.

But in metro Atlanta, the number of African Americans buying homes dropped by half between 2005 and 2015, according to the Harvard Joint Center for Housing Studies.

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And that decline isn’t only because of changing lifestyles.

Caught In The Crisis

One reason traces back to the foreclosure crisis and its disproportionate impact on black households.

Annie Manning sits in the lobby of her senior high-rise community in the Old Fourth Ward and describes the home she purchased in the 1990s.

It was in a recently built subdivision in Stone Mountain, and it was a good price. Manning says she never had trouble paying the mortgage.

In 2005 she refinanced and got a loan with an adjustable interest rate. She says the lender promised it wouldn’t go up by more than a percent.

“I took his word for it that it would be 1 percent. No more than that,” Manning says. “Oh my god. After the two years was up, I got a bill 4 percent. And then six months later, another 4 percent.”

Manning says she couldn’t keep up, and in 2008, she lost the home.

Risky loans, like the one Manning chose, were concentrated in black communities, especially in Atlanta, according to an Urban Institute study. Atlanta Legal Aid Society Attorney Sarah Bolling Mancini says there’s evidence those communities were singled out.

“There have been a number of lawsuits based on racial targeting of subprime loans,” she says. “There’s a body of evidence that supports the fact that that happened.”

The result of that became clear during the crisis: black neighborhoods in Atlanta and nationally saw the highest foreclosure rates.

John O’Callaghan, president and CEO of the Atlanta Neighborhood Development Partnership Inc., says those foreclosures had a particularly devastating impact.

In the African-American community before the recession, 90 percent of household wealth was in the home, he says.

“Wealth is not income; wealth is what you’ve created to start a new business or send a family member to college,” O’Callaghan says. “Wealth is very important to family stability and generational growth.”

And with the foreclosures, their wealth was stripped away. That’s made it so some couldn’t buy a house again, while, others, like Annie Manning, wouldn’t want to.

“When I moved to the city, there was some organization that was contacting me,” Manning says. “I could get a home, another home. And I was like, ‘No way.’ I refuse to go into a home. I like this now. When I pay my rent, my utilities are included, so I’m good.”

She says, for her, less is best now. It’s less stress.

“Many people are reluctant or skeptical to make that leap again to homeownership, because of the experiences they’ve been through and not wanting to repeat that,” says Emory University professor Michael Rich, who studied the foreclosure crisis in Atlanta.

Still, the overall decline of black homebuyers does have Rich concerned. Nationally, the homeownership rate for minorities is at levels going back decades.

And owning a home remains a route for upward mobility, many experts say.

“I think the real challenge is what can be done to provide pathways to make it easier for minority households to become homeowners,” Rich says.

Unable To Buy

But it’s not simply those caught in the foreclosure crisis who aren’t buying homes. There are also families like Sandricka Hardy-Bradley’s, who are looking to make their first purchase and can’t.

Hardy-Bradley says she dreams of owning a house with space for her two daughters and husband in the quiet suburbs.

“I was raised in a house,” she says. “That’s just my whole vision, just to raise my kids in a house, in a neighborhood, backyard, good schools. That’s just my whole vision. That’s the where I see myself at.”

Hardy-Bradley says she can pay rent in this southeast Atlanta townhouse for a lifetime. But it won’t ever be hers.

“Purchasing your home, you can pay it off in 10, 15, 30 years,” she says. “It’s yours, you can leave it to your kids and their kids, because it’s yours, it belongs to you. I’m excited to leave my kids something.”

Hardy-Bradley says her family has the income to buy. And they even took a homebuyers’ class. But the loan officer couldn’t get them the right mortgage.

“Actually, she approved us for $90,000. That’s not much. The cheapest one that I found that I wanted was $140,000,” Hardy-Bradley says. “So technically $90,000 wasn’t going to get it.”

She was looking in Ellenwood, Georgia, one of the more affordable parts of the metro area. And yet, she had to put her dream on hold.

These days, Hardy-Bradley’s struggle isn’t unusual.

“I would say eight out of 10 clients that I see will not be able to qualify for a mortgage at this time,” says Michele Calloway of the real estate company ACRE Group.

Calloway serves mainly black and Hispanic homebuyers. And she says the lending environment has changed.

“Prior to the crisis, the loan guidelines were more lenient. There were lots of products on the market,” she says. “But now there isn’t.”

In general, since the crisis, banks have cut back on lending – especially to people with less-than-perfect credit scores.

Jeffrey Hicks, president of the black trade group the National Association of Real Estate Brokers, says it’s often minorities who are left out.

“You know, we look at how many loans were approved in terms of African-American loans, and loans approved for whites and Asians and Hispanics,” Hicks says. “And some of those numbers are very disturbing.”

The real estate site Zillow analyzed data from 2015 and found black applicants in Atlanta were denied mortgages at more than twice the rate of whites.

“The regulatory environment has definitely constrained credit access to the hardest hit people who were impacted by the foreclosure crisis,” says Alanna McCargo with the Urban Institute.

So after losing homes and savings, McCargo says, black homebuyers have encountered this new obstacle, tighter lending – right as housing markets pick up.

“There’s a real concern that people are going to miss out on this wealth building opportunity,” she says. “So it’s sort of a generational crisis in the making. When you’re not able to participate in homeownership, it’s a setback over time for many families.”

McCargo says this doesn’t mean banks should go back to loose lending like before the crisis. Instead, she asks whether they can find a happy medium.

Sandricka Hardy-Bradley is optimistic about her case.

Banks look for two years of income. And she and her husband have been in their current jobs for just a year. So, she believes 2018 is going to be “the one.”

“Next year I will be in my own home and it will be mine,” Hardy-Bradley says. “Like it will be my home, I’ll be paying a mortgage, not rent. So just make sure you keep my contact information and check back with me next year around this time.”

That’s when she’ll be a homeowner, if the housing market – and lenders – allow it.