People of Color Pay More for Mortgages From White Brokers, Study Finds
Next City and others have reported extensively on discrimination within the mortgage industry. Borrowers of color are treated differently, secret-shopper tests report, and they are denied mortgages more frequently than their white counterparts, even when controlling for credit score or other financial metrics.
Now, a study from finance and real estate professors Brent W. Ambrose, James N. Conklin, and Luis A. Lopez finds that home borrowers of color who use a white mortgage broker pay higher fees than similarly qualified white borrowers do.
The professors examined 300,000 mortgages that originated between 2003 and 2007 and found that “the premium a minority pays depends critically on the race of the mortgage broker.” The analysis uncovered that Hispanic brokers charged Hispanic borrowers a premium compared to a comparable white borrower; white and black borrowers paid around the same fees from a black mortgage broker, and any person of color who used a white mortgage broker paid more, on average, than a white borrower.
The study will be presented early next year at the American Economic Association conference.
New York Judge Kicks Back Inwood Rezoning
A New York Supreme Civil Court judge annulled the rezoning of Manhattan’s Inwood neighborhood, City Limits reports.
Judge Verna Saunders said the city did not address community concerns or do due diligence during the environmental review process.
Inwood’s rezoning, approved by City Council last summer, was slated to bring new development to the neighborhood, which the New York Times has called “the last affordable neighborhood in Manhattan.” Next City has previously reported on neighbors’ efforts to stall the rezoning until protections for tenants and small businesses were put into place.
“Today is a day of hope for the Inwood community and for all working-class communities of color across New York City who are under threat of predatory rezonings. Judge Saunders has rendered a verdict against the approach the Economic Development Corporation took to rezoning, an approach that put profits before people,” said State Senator Robert Jackson, a member of Northern Manhattan Is Not for Sale, a coalition of residents that has fought the rezoning.
The city has said it will appeal.
Why Chinese Restaurant Owners Are Happy That Chinese Restaurants Are Closing
The share of Chinese restaurants in major cities in the U.S. is shrinking, and many Chinese restaurant owners couldn’t be happier, the New York Times reports. That’s based on data from Yelp, which found that five years ago, an average of 7.3 percent of all restaurants in the 20 largest metropolitan areas were Chinese, compared with 6.5 percent today, and on anecdotes from Chinese restaurant owners who say they’re reaching retirement age and have no children who can take over the business.
That’s a good thing, many owners say. Their children “are pursuing professional careers that do not demand the same grueling labor as food service [does],” the Times said.
“These people came to cook so their children wouldn’t have to, and now their children don’t have to,” Jennifer 8. Lee, a former NYT journalist who has chronicled Chinese-American restaurants, told the Times.
The pattern follows that of other immigrant groups, the Times said. Children of immigrants are less likely than their parents to own their own businesses, and many see more economic mobility than their parents.
One restaurant owner, Tom Sit, who owns Eng’s in Kingston, New York, summed it up: “I hoped [my daughters] have a better life than me,” he said. “A good life. And they do.”
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.