Wednesday, January 9, 2019

Housing and Transportation are linked

Affordable housing and transportation are linked.  Each has related structural inequalities that affect communities.

Since the 90's, when Hispanics began inhabiting the mill houses and endeavoring to set-up shop in tiendas and taco stands, Waughtown of Winston Salem has grown to be considered the prominent Hispanic Barrio of our small city.   Waughtown is in fact quite diverse, yet it sits on the wrong side of the real estate “tracks” in Winston-Salem. In 2013 and 2017 the city re-evaluated and depreciated the tax values of our homes.

The devaluation has repercussions on borrowing money from a bank.  Loans become out of reach,  even for professionals with good credit.  In 2016, I bought a quarter acre lot two blocks away from my house thinking it an opportune investment.  Buying it from was a bit scary and I was leery that the minimum bid of $2,800 seemed too good to be true, even for a bank-cast-off, liability of land that had once been the sight of a burned down house.

I got excited envisioning how the new construction would beautify the community. I found a young couple interested in building on the lot.  This couple took a year and a half to find an architect, and then a builder willing to build the 3 bed 2 bath single story handicap-accessible house of their dreams.   The couple was trying to keep cost down because they weren’t sure how their new home value would compare to the neighbors' homes.   Their ideal house was slated to cost $157,000.

Redlining happens when banks will not invest in neighborhoods they don’t value, and most folks think it is a thing of the past.  Don’t we have a more modern way to fairly access mortgages?  There must exist a more equitable way to get new homes built, right?

But the reality is that banks don’t see neighborhoods like Waughtown as desirable or safe investments.   When the couple went to the bank to get a mortgage to build, the bank agreed to lend only a fraction of the cost.  Based on what they considered comparable values, the bank would only lend $90,000 for the construction of a new home.  That’s a loan for only 57% of the cost to build.   How can a young couple afford a $67,000 down payment? Our new construction dreams were up in smoke.

Sweat equity seems to be the only way projects happen in Waughtown.   Recently the lot sold in a cash transaction to a Hispanic couple who had family living on the same street.   I broke even on the venture and became even more grateful for industrious Hispanic neighbors who see value when others see red.

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