Editorial note: We wrote the first two parts of this post and 95% of the third part before Baltimore broke out into massive rioting. We’re presenting it mostly as we would have otherwise. It’s still far too early to write anything but breaking news about yesterday’s events. The irony of needing to take a break from finishing a 12,000 word essay about how hard it is to live in the city to watch it be burned and looted isn’t lost on us, and we hope it’s not lost on readers.
In Canadian retin, we touched on issues endemic to marginal neighborhoods and the attitudes which those in better neighborhoods take toward problems that are not their own to live with. The young family we talked about on Sunday aren’t the only ones finding it difficult to get along in a marginal neighborhood. In part two we wrote some about what our own experience as a Waverly homeowner has been.
We bought our house in 2009. Personally, we were at a point in life where buying a home made a lot of sense. Nationally, the worst of the bubble and subprime crisis was over. The Obama administration was giving away $8000 tax credits to first time buyers. It may not have been the ‘bottom of the market’ but in 2015 we’re not even sure if that phrase really has any meaning anymore. The idea of a market that fluctuates back and forth between favoring buyers and sellers seems a little old fashioned in a post-recession world where the housing market is truly, deeply and undoubtedly fucked.
We paid what was a fair price for our house. It was a recent renovation and our buying it was the sort of thing that Baltimore’s boosters and cheerleaders would point to as an outstanding success story: a first time buyer is able to stay within his budget and get a beautiful house in a diverse neighborhood that’s walkable, bikeable, close to the Farmer’s Market, etc etc. The house was even a former rental, and having it bought by an owner-occupant is ostensibly a good omen for the neighborhood.
We went into it with our eyes open. We knew that we were leaving some money on the table by buying in Waverly. Our eyes are still open, and we don’t much like what we see. Neighbors who trash your street and tell you to go fuck yourself every single day and a constant fear of crime is only one of the ongoing battles you’ve got to fight when you own a home in a marginal neighborhood. The other, more insidious struggle is financial: fought against shady investors, thieving corporations and the incompetent and uncaring bureaucracy of the city itself.
The Chop as Financial Case Study
Our first big step away from the happily-ever-after ending you read in every first time home buyer newspaper article was when Wells Fargo went ahead and increased our mortgage payment by 24% instantly. Mind you- we have a 30 year fixed rate FHA mortgage. The source of the increase was an escrow shortage. This was more than three years ago. Now, we’re not going to go back and break down the exact math- that’s our business anyway. The point is that our escrow should never have fallen so short after only a couple years of ownership. The company that underwrote our mortgage should have done a better job of figuring out what would be needed for escrow payments in the first place. Failing that, Wells Fargo should have reviewed it more closely when they assumed the mortgage, which was fewer than 60 days after closing. To wait two years and send us a letter saying ‘Pay this large four figure sum right now or watch your monthly payment go up 24% is bullshit.
Of course, we probably wouldn’t have an escrow shortfall at all if the city had its financial house in order. The city treats homeowners like a cash cow while most agencies and departments have gone years, decades without audits. Here’s a typical news story. Do you remember when that son of a bitch Ed Norris stole all that money? What? You don’t remember because you were not here in 2004? Let us remind you: He stole it because nobody even knew it was there in the first place. That was ten years ago and City incompetence and corruption has only grown worse since then. Would you like a recent example? One could write a whole book about city corruption so we’re just going to stop now and get back to making our point.
Anyway, we have no desire to do business with Wells Fargo. Wells Fargo fucked our city good during the subprime crisis. They fucked us so good they couldn’t even get away with how good they fucked us, having to settle an eye popping $175,000,000 discrimination suit over recent Baltimore lending practices. Part of the reason why our neighborhood and others like it look so bad, and are so far from improvement is a direct result of Wells Fargo’s unethical and illegal lending and foreclosing practices in Baltimore.
So Chop, if they jacked up your mortgage payment and you hate Wells Fargo anyway, why don’t you just refinance? Glad you asked.
We would love to refinance. It makes good financial sense for us too, since our credit is better now than when we bought. It’s very good, in fact. Interest rates are better too, and we should qualify to take more than a full point off our mortgage. Point and a half, even. For those of you who don’t know what a point and a half means: it means several hundred dollars a month. We also make a little more now and can show better earnings than we could in 2007-8.
In fact, last year we strolled on into M&T and had a chat with our banker. “How’d you like to start receiving several hundred a month from an existing customer who’s never missed a mortgage payment?” We said. “Sure.” They said, “Great. Let’s put the wheels in motion.”
Their initial offer was a very good deal. We could move to a 15 year mortgage from a 30 and still manage to save about $250 a month, owing only about $400 at closing. Wonderful. The little guy finally wins one. Not so fast.
In our case the refinancing process took months. The more time that went by, the more “issues” popped up. Each time an “issue” was raised, our prospective payment went up a little more. To the point where 15 years no longer made sense. But then came the big issue: They sent out an appraiser who barely gave the house a cursory glance before he went to pull comps. He didn’t do a good job of pulling comps either- didn’t distinguish between condition or sale type, just said ‘Your house is worth X dollars, good luck.’
It was a low number. Absurdly low. Punch in the gut low. So low he’s lucky we didn’t assault him physically. This kind of bullshit cursory ‘appraisal’ never would have happened just across the road inside the White L. In the White L there’s a difference between the auction of a shell and a turnkey conventional sale. In Marginal Baltimore, apparently there isn’t. The final offer from the bank was within half a percent of what we were already paying every month. After several months of being strung along the only satisfaction we got was hanging up on a mortgage broker. Perhaps we might have better luck if we tried again, perhaps not.
That whole experience happened before our roof deteriorated to the point where we need a new one. This Winter’s snow was the last straw. We’ve already had a very good roofer out here twice, and now that we need another repair we really haven’t got much choice but to suck it up and buy a whole new roof in the $2000-3000 range for a house we only intended to keep 7-8 years to begin with.
But Chop, you say that could happen in any neighborhood. It is our contention that scenarios like needing a whole new roof in the first ten years are much more likely to occur in marginal neighborhoods where people fix what they can as best they can, not necessarily the right and thorough way. When we say our house was a rehab, it was a Waverly rehab, not a Canton rehab. It’s a nice house, don’t get us wrong, but we could see right from the start where some compromises had been made and it’s meant constant updating/upgrading of little things and more maintenance than would be necessary on a truly top-quality job.
It’s irksome to realize we need a roof at this particular moment, because while we were at sea in February we decided that this would finally be the Spring we got around to the expensive project of replacing the back door, which has looked like this since we were robbed three years ago.
Oh yeah, we didn’t mention that in the last post where we were bitching about quality of life issues but someone broke into our house and stole two televisions, our bicycle, several bottles of liquor and various other items of value. Broke into several neighbors’ houses as well. So one of our many home improvement projects has been putting bars on our windows. Do you live with bars on your windows? We’re here to tell you, it’s pretty fucking depressing.
We’re trying to build a savings account, you know? It’s necessary. When your work is dangerous you sometimes get hurt on the job- like we did last year. We nearly lost a leg and honestly we could have easily been killed. Good thing we also shell out for life insurance. Not being able to work again until we were fit for duty meant our five figure savings dwindled to zero figures before we were back to work again. We’ve built it back up past where it was, but we can’t save and buy a roof and buy a door and meet the dozens of other obligations that pop up all the fucking time when you’re working class. We just gave the IRS $600 because whoops they got some bad information in 2013 and here’s what you really owed. Laptop just died too. It’s always something when you’re near the bottom. The nearer you are, the more somethings it is.
But we need to hold off on the roof because here’s our homeowners’ insurance agent sending us a nasty letter. Looks like they’ve chosen us ‘randomly’ to have the outside of our house inspected. Now they’re telling us we’re obliged to repair the cement steps and the porch overhang or risk being dropped. So whatever funds we had for home improvement are going to be dedicated to the porch first, even though it’s about 6th or 7th on our priorities list.
We’re doing a DIY job of mending the steps. We have the skills and the tools and can do it easily enough, but it’s a lot of work and takes several days. When we finish the work and want to sit down and open a bottle of beer, satisfied with a job well done, what do we have to look at as a view from our porch? The trash pile in back and the burned out shell in front. We wish we could explain to you what it feels like to take pains to maintain your house in a neighborhood where so many others are dilapidated. We don’t have the words. We work hard on the ships at sea and we come home and work hard taking care of our house and we want to feel pride in it but we can’t. It’s not possible to feel pride in a humble thing. Humility is the opposite of pride. Nothing is so humble as a house in Waverly.
Insurance Woes and the Cost of Living
So we’ve got a beef with Allstate. But at least we have insurance. As we said in our last post, our neighbor burned her house down in a stupid and negligent way. We do not know if she’s got insurance. Even if she does, it is doubtful that she’s inclined to rebuild the house, as she is well over 60. If she doesn’t have insurance we’re at the mercy of whichever cut-rate investor she sells to. Either way the odds of that house being rebuilt any time in the next several years are very small. This is bad for us, but it’s even worse for the house next door.
The house next door is owned by a good neighbor, and it’s for sale. It’s a nice house for sale at a price that we definitely could not afford to sell at and it was listed BEFORE THE FIRE. We don’t know exactly why our neighbor priced her house for really what’s quite a lot less than it should sell for, but if it was worth that before the fire, what’s it worth now that it’s next to a burned out shell? This neighbor also suffered significant smoke damage during the fire, and has had to call in a damage remediation company and get rid of mattresses and had all sorts of other headaches. She’s probably got her own insurance company to deal with who are almost certainly increasing her premiums now, if they don’t find a backhanded way to drop her.
Speaking of high insurance premiums, ours are in the neighborhood of $1700 a year for what is a relatively small brick house. The national average for homeowners’ premiums is $800 a year. That means we’re paying roughly an extra $75 a month in our PITI for the privilege of living in a dangerous and violent city. And that’s just insurance.
Should we even begin to discuss Baltimore City’s property tax problem? We could save $1200 year by buying somewhere else at the same price tag. Not just the county, but almost anywhere in America. And that’s the savings for our very modest house. For us, a $1200 a year raise would be significant.
But let’s say you’re doing really well. Two good incomes and trying to raise a family. You have a nice house near Canton Square. You’re probably paying $500 a month or more just in property taxes. $6000 Every year- plus a piggyback tax on your income. Even for people who are doing very well, that’s an enormous cost when weighed against needs like child care, school tuition (Because our schools are bad. Bad bad bad very bad and not good. You can talk all you like about charters and everything else but a family’s success can’t be based around lotteries and good luck and maybes. Parents need good schools they can count on and they just don’t get that here. You could write another book just about our schools and the waste, fraud and abuse at their North Avenue headquarters.) Not to mention the typical family concerns of saving for college, retirement, etc.
But what of city services? Recycling! Those bastards at DPW throw more trash into the alley than all our neighbors combined. The more often it happens, the less keen we are on paying their pensions into old age. 311? Waverly Dad called 311 and they told him to quit calling. A professional fire department. Yes that is nice to have but if the people of our city didn’t like to set themselves on fire so often we could probably get by with a volunteer department.
Maybe you’re of the New Urbanist school that values walkability over all? Whatever. We don’t own a car now but if we lived outside the city or in a different city we could take our $2000 from just the first year of property tax and insurance savings and buy a cheap car… and get a driveway to park it in without fear of the windows being smashed once or twice a year.
Here’s the thing about walkability: it’s only worth so much. People, and especially people with young kids, who need to tote those kids around, who only go out socially maybe once a week anyway, generally need to own cars. Culture is great, but if you have to spend an extra 15-20 minutes driving to it so what? People will do that. It’s not a drawback. Outside Baltimore City we also wouldn’t need to worry about getting overbilled for ground rent, which also seems to happen twice a year now.
Water and Blood
But ground rent’s not the only thing for which we get overbilled! Should we mention the four digit water bill we had to pay two years ago because of a city mistake? We were overbilled and had basically no recourse. Oh, we went down to the Wolman building and showed them the error, but the best advice they had for us was “Well, are you sure your toilet’s not running?” For God’s sake! They told us we could schedule a hearing 2-3 months in advance, but we can’t very well decide not to ship out and earn a living because we need to wait around and dispute a water bill. (Although at least they switched the property into our name after 4 years, which explained why we never received bills and only turnoff notices.) So we had to pay it. Because Baltimore City will shut your water off. They’re shutting it off to thousands now. It almost feels like they won’t be happy until they bring back Cholera. Despite the fact that their whole system is fucked, from billing to the pipes- all they can say is ‘Pay your bill, deadbeat.’
Even if your bill is accurate, it’s too damned expensive. Water rates are rising 42% in a two year period. Do you think the water coming out of our tap tastes 42% better than the water another city? Do our showers get us 42% cleaner than they did before?
When we tell our story or link to a news article like the one two paragraphs up, these are not isolated incidents. We’ve all seen the pipes crack and burst in the streets every winter. About half the long term residents we know have been overbilled for water at some point, with some facing the nightmarish scenario of a leaky meter which not only causes bogus bills in the thousands, but can damage your property as well. Talking with our cousin at Easter, he has four inches of water in his Canton basement. An acquaintance recently bought in Hamilton and didn’t hesitate to describe it as the worst mistake he’s ever made in his life after suffering $35,000 worth of water damage.
We see meters leaking on our own street all the time. Water just comes up out of the ground. We’ve lost track of how many times the city has closed the street and dug up a significant portion of it. Probably 8-10 times in the last four years on our one-block stretch of street. They were digging up the next block yesterday, and they’d probably be back at it today if not for the riots.
We get letters at least once a month from the mayor designed to scare us into buying an insurance policy specifically to cover the installation of smart meters. That contract was a $100,000,000 overbid giveaway to an SRB campaign contributor. It’s one thing to take taxes and use them for good. It’s another to charge us twice as much as it normally costs to keep digging up our street all the time. Oh yeah, That insurance is a sweetheart corporate giveaway too. And it’s not really insurance. And it is very likely to increase in price after you’ve signed up for it, just like Comcast which also has a monopoly in Baltimore City.
If you’re just a few years in town and have never paid a water bill we don’t expect you would understand this thoroughly. You have not walked a mile in our soggy shoes.
When aging hipsters like the Chop complain about our taxes being so high, we’re not turning into our parents- we’re upset that the 100% tax premium we pay goes straight into the pockets of the mayor’s rich developer friends or is used to pay $38,000,000 in police overtime and millions in settlements to a police force that’s been failing its citizens for decades, failed Freddie Gray, and failed us all again catastrophically last night. That is, of course, another book of problems waiting to be written.
A Cultural Note
When we wrote this post about Authenticity we came up against a lot of misunderstanding and misguided criticism. One of the most repeated, at least, the most Retweeted, was ‘Well, I for one certainly don’t miss the Hampden that had Confederate flags all over the place!’
That’s a false choice which assumes no middle ground is possible. The people who would reduce a complex urban problem like gentrification to ‘Yoga studios good, Confederate flags bad’ have yet to reconcile that in Baltimore’s most desirable neighborhoods our historical old-fashioned overt racism has a direct connection to today’s ‘nice’ ‘good’ ‘hot’ neighborhoods. Without those Confederate flags, Hampden experiences the same White Flight that Lauraville and Belair Edison did in the 1990′s and there are no juice bars and gourmet ice cream shops and craft breweries in the neighborhood- and definitely no Rotunda project. Neighborhoods with black people in them are not readily gentrified. Capital, in the economist’s sense of the word, shies away from them. That’s a very ugly fact but it’s true, and it’s the reason you don’t find any fancy new businesses in the rest of West Baltimore. Hampden’s kitschy Hons were mostly racists who fought tooth and nail to keep blacks out of the neighborhood, and when we celebrate Honfest every year, that racism is part and parcel of the party.
Did any of the Millennials pouring in to occupy $2000/mo apartments and houses actually see Hairspray? It is a movie about racial hatred. When that movie was set in the 1960′s, and even in 1988 when it was released the notion of a fat girl wanting to dance with black guys on TV was radical. It was subversive. The genius of it was that Tracy Turnblatt was an unlikely hero. 1988 Was not the age of Lady Gaga and Glee where pop culture and the Internet celebrated outsiders. Waters was able to make such a great movie only because he was an outsider himself (footnote).
But here’s the thing: we all like to think we would have been right there with Tracy Turnblatt fighting the good fight in the 60′s but most of us would not have. Most of us would have kept to our own neighborhoods and stopped watching the Corny Collins Show altogether.
We said before that the only way to become a Baltimore insider is to live through enough of the things that make us us. The protests for Freddie Gray and the rioting are one of those things. If you live in this city and you’re one of those people who spent all of last week in your own neighborhood complaining about traffic on Facebook, Fuck You. You’re not the kind of person we want to share a city or a neighborhood with. Freddie Gray was a citizen of this city and if you look at him as ‘one of them’ and not ‘one of us’ you are part of the problem. You would have been on the wrong side of history at any time, as you are now.
History didn’t just come to an end in the last year your college textbook covered. It’s still going on. It’s happening today. We went out on Saturday to what was the biggest civil rights march Baltimore has seen in the Chop’s lifetime. We marched from West Baltimore to city hall, where we demonstrated just like we did after Ferguson and after the Zimmerman verdict. There’s other stuff we’d rather be doing. We’d rather get back to all those household repairs or go bet horses at Pimlico. But you don’t get to choose when history happens, you just get to choose which side of it you’re going to be on.
If you believe that what’s going on around the Western District and Gilmor Homes has little or no connection to your nice neighborhood down by the harbor you’re wrong. Maybe you will live in this city long enough to one day realize how wrong you are. But touching on our city’s racial problems brings us around to what is in the end the most insidious financial battle we find ourselves thrown into.
The Black Tax
As we said, when we bought a house in Waverly we didn’t harbor any illusions of the area improving dramatically. We didn’t expect to realize a very great rate of appreciation when it came time to sell. We were prepared to accept less than one percent a year, and we knew all along that if worse came to worst we could even afford to lose a little on the sale price and still end up much better than we would have been paying rent. We knew that a house in Hampden or Remington would be a better money maker, but to be honest we didn’t anticipate exactly how much gentrification is about to happen there and how quickly it would come to pass.
When we did our math in 2009, we didn’t reckon with the Black Tax. The Brookings Institution called it The Segregation Tax when they studied it in 2001, but we’re going to go ahead and keep referring to it as the Black Tax, which is what it’s always been called in Baltimore. Here’s how Emory University professor Dorothy Brown explained Brookings’ findings in Forbes:
“When most black people buy homes, we hurt ourselves economically.
Home ownership has been an important vehicle in creating a solid white middle class, but it has not done the same for most black homeowners, because blacks and whites buy homes in very different neighborhoods. Research shows that homes in majority black neighborhoods do not appreciate as much as homes in overwhelmingly white neighborhoods. This appreciation gap begins whenever a neighborhood is more than 10% black, and it increases right along with the percentage of black homeowners. Yet most blacks decide to live in majority minority neighborhoods, while most whites live in overwhelmingly white neighborhoods.”
“Put simply, the market penalizes integration: The higher the percentage of blacks in the neighborhood, the less the home is worth, even when researchers control for age, social class, household structure, and geography.”
“When blacks buy homes in majority minority neighborhoods, we increase the racial wealth gap. Whites who want to experience racial diversity at home also pay dearly.”
We’re one of those whites. We’re overpaying by hundreds every month to be in a house that’s surrounded by foreclosures and short sales, and may or may not be worth enough that we can afford to sell it. We do value diversity, and when we signed on the dotted line we put our money where our mouth is. We didn’t realize at the time exactly how rare that is. If we were naive in any way, that was it. Want to read more studies about it? Here’s a good link to go down the rabbit hole.
When you’re a white homeowner in a black neighborhood, you face the very same problems that black homeowners do everywhere, which are significant, life-altering problems even in neighborhoods of black affluence. They’re the kind of problems that force you to choose the least-bad option, and follow through on it reluctantly. That’s something Baltimore makes its residents do every single day.
Our very favorite neighbor who we’ll call Eddie lives right next door to us. Like us, he’s in his 30′s, single, an area native and making near the same salary, which in a single income household is just enough to hang on in the middle class in Maryland. He also owns his house and it’s a pretty nice one. The biggest difference between the two of us is that our neighbor is black.
When we came home this Spring Eddie announced, completely out of the blue, that he was thinking about moving to Houston. “No shit?” we said, “We’ve been thinking the exact same thing.” And we have been thinking of moving to Texas. Or Nashville, or Fort Lauderdale, or Atlanta or… just about anywhere that’s not New York, Massachusetts or California. As we said, Baltimore is not a cheap place to live. There are lots of nice cities where we can go live and have a nicer house in a better neighborhood at the same monthly payment and save up to $10,000 a year! That’s a 20% raise for us. That’s life-changing money. That’s how you get into the middle class and stay there. That’s how you save for retirement. If we were to pick Nashville, which is near the top of the list, that’s what we’d save when it’s all said and done. Working at sea, we don’t even have to worry about finding a different job.
Despite the fact that Eddie’s black and we’re white, we both looked at the same set of problems and identified the exact same solution. What does that tell you?
On Finding The Least-Bad Option-
While relocation is an attractive possibility, it’s not a foregone conclusion. We’ve already decided we want to move in the next year or two, the question is where? As the owner of even such a modest house, we’re in a much better position than we were as a first-time buyer. We could just move over to Hampden or Medfield or Remington. It would force us to go to the top of our budget, and certainly we’d be paying more monthly than we are now, even with our mortgage as inflated as it is. But it would be a solid investment. Being single and knowing how to tolerate bullshit, we could stick out the massive citywide problems from a cozy house in Hampden for another 6-8 years easily enough if our tax bill didn’t double, which is possible in Hampden. It’s a lot easier to climb a mountain of bullshit when you expect there’s a payday at the top.
But is that something we really want to do? As we’ve seen in studies and pointed out in previous posts, white people will continue to move to white neighborhoods and reinforce a racist system, even if that’s not their personal intention. To move to a ‘nicer’ neighborhood for us means to consciously move across racial lines, and in turn to become part of the problem.
The gentrification of Hampden and Remington is a done deal, even if it’s not yet in its final stages. We could find a Hampden house we like today and move into it. It’s not too late for that, but we can forsee a time very soon when you can’t find a decent conventional sale in Hampden under $300,000- just like you can’t find them around the harbor today. To move to Hampden would mean we were forced to root for gentrification and that we’d have to welcome people we don’t care for very much, like those in the Christian Science Monitor Piece, with open arms and a ‘howdy neighbor’ instead of the more traditional Baltimore salutation of Fuck You.
Besides, we’re only a 10 minute bike ride to the Avenue where we live now. It’s not even like spending more to live in Hampden gets us that much closer to the Wine Source or Atomic/CSR or 16 Tons or the other 2-3 businesses that we actually like which aren’t overpriced and pretentious… or Chipotle, which Hampden has now.
If we’re sick of crime and drugs we could continue to go against the grain and just move to a decent middle class black neighborhood like New Northwood, Morgan Park, or somewhere near Herring Run or Chinquapin Park, but perversely, just as we can barely afford to live in Baltimore’s white neighborhoods, we can’t afford to live in a decent black one either because we can’t afford to keep paying the Black Tax, which we know would hit us hard again if we bought in any of those places. Our best friend, who is also a longtime Baltimore ‘insider’ recently relocated to Atlanta (because Baltimore has a remarkable lack of advancement options for him careerwise). He’s trying to sell his house in one such black neighborhood. It’s not going so well. Black buyers in modest neighborhoods are the last buyers to come to market in appreciable numbers, even in 2015. As we touched on when we talked about Wells Fargo, housing discrimination is still a widespread systematic problem for which no one has a good solution.
As a working class person, home equity is the only chance we’ve got to build any personal wealth at all. It’s the only Authenticity there is. It’s what all those Germans and Polish, Italians, Greeks, Jews, Ukrainians and everyone else was trying to do in their little row house neighborhoods 150 years ago. Around Chinquapin Park for example, we’d get a somewhat better neighborhood, but we’d give up the proximity and walkability that we do get in Waverly, and still have the same intractable citywide problems to deal with. Meanwhile we’d be no better off when it comes to appreciation.
Another option is to do nothing and hope that things just improve organically. That would be supremely foolish.
We want to call your attention to a very excellent Natalie Smith Sherman piece in the Sun April 3 about the latest community efforts to revitalize West Baltimore. The article opens by focusing on Sarah Littlepage, a lifelong Baltimorean who’s lived in Union Square longer than we’ve been alive. She freely admits she’s jaded and tired of fighting for change and wants nothing to do with the new efforts. We don’t blame her. Why keep going to meetings and gathering signatures and doing the thousands of other menial boring things that are civic activism when nearly 40 years of it has brought no change? When you continue to see city hall make the same mistakes it always has? The supposed appeal of the new Southwest Partnership is its size, but size may also be its biggest drawback.
The piece laments the failures of past revitalization efforts (there have been many) and the treatment of neighborhoods by large institutions, but those institutions sit on the Partnership’s board. Also on the board are the types of investors who own hundreds of units of cheap rental housing and many of the area’s more than 3000 vacant homes. Not only should they not have a place at the table, but we should be passing laws that make it impossible for anyone with $15k laying around to buy a vacant house and sit on it “until the market improves” which it never will because all the real money is flowing to the White L and “investors” themselves detract from neighborhood stability and hurt property values.
Speaking of property values, the inequality even among West Baltimore neighborhoods is staggering, with the high end of the Southwest Partnership enjoying an average household median income over $52,000 a year and home values around $170k (almost exactly where we pegged it, by the way) and the low end living well below the poverty line. When you have a mix like that living together, you get the sort of problems we described above and in the last post.
The Southwest Partnership is happy to report that they’re in receipt of a $200,000 grant from the Goldseker foundation, which is kind of a slap in the face in light of history. It’s enough for Goldseker to say they gave and get some good PR, and that’s it. Morris Goldseker in his lifetime put all of West Baltimore’s ragtag investors to shame. He was the single biggest blockbuster in Baltimore history and he practically invented the Black Tax. What is $200k? It’s enough to buy a few trashcans and some new signage for neighborhoods, the same kind of futile efforts going on in Belair Edison. $200k Would rehab about 3 vacant houses. It’s chump change. If you want real development, you need real money.
The real money is in Tax Increment Financing (TIF) schemes for large development. Smith Sherman’s article talks about UMD and Wexford wanting a TIF. They’ll probably get it, because the Mayor’s Idea of economic development involves giving large institutions whatever they want. Southwest partnership is already dubious about UMD’s TIF because of course they are. They’re not natural allies. At the end of the day their interests are very different.
Then there’s the Poppelton TIF. The Poppelton TIF is a fucking Fiasco. Even if everything ran perfectly with it and they got the whole thing done ahead of schedule and made a good return for taxpayers- $1500 1BR apartments in Poppelton??? It’s gentrification at best and an unrealistic total failure at worst. Time and again we see what happens when we let developers promise the moon and deliver projects that make nowhere near the money they’re supposed to.
The casual observer might say ‘Gee, we give TIF’s to projects in white areas like Harbor Point, it’s only fair we should give them to projects in black areas.’ It is our contention that we should be giving out TIF’s sparingly, if at all. We’ve got dozens of very large projects happening right now. We don’t need every single one of them all at the same time. Even as we build a brand new downtown in Harbor East, the same old downtown we’ve always had is struggling with a persistent office vacancy problem, even as Kirby Fowler continues to tell us how healthy Downtown is.
If the projects that Baltimore developers are pitching are such great ideas, such good money makers, let them find the financing on their own! Let the market sort out which ones get built! If they’re really worth building they will pay back their investors no problem and generate tax revenue to boot! At a minimum if we’re going to let big development go hog wild inside the White L, we need a system whereby they’re obliged to make some direct investment outside of it as well. Setting aside a few apartments in your ‘luxury’ development to be $1500 “market rate” units doesn’t serve Baltimoreans at all.
Finally, when Smith Sherman’s article mentioned a 1978 “wave of optimism” for West Baltimore it put us in mind of a very sensible post in the Brew on re-engineering MLK Blvd. Gerald Niely’s plan should be implemented ASAP (although it and other good ideas like tearing out the elevated portion of the JFX probably never will be) but what may be most striking is his offhand memory of what Baltimore was like in 1978:
“Until around 1980, West Baltimore held its own. East Baltimore was still under the cloud of a looming expressway, and the Hollins Market area was vying with Fells Point to be the center of Baltimore’s hipster bohemian culture.
As for gentrification, it was no contest – the West Side’s Union Square was the clear winner over southeast neighborhoods like Butchers Hill or Canton.
Then the southeast was liberated from the expressway threat while Poppleton, Harlem Park and Greater Rosemont were upended by the “Highway to Nowhere,” an isolated segment of I-70 rammed between Franklin and Mulberry streets.
The decline of the west began in earnest.”
No wonder Sarah Littlepage is tired and jaded. She herself is of an age where she’s not likely to move, unless it’s to a retirement home or a condo in Boca Raton. She chose her least-bad option decades ago and has been fighting methadone clinics and litter ever since. But what are her Millennial neighbors supposed to do when they start having kids and hear the county calling and find themselves faced with that choice- our choice? If you want to know what life is like in Marginal Baltimore, don’t take our word for it. Track down Sarah Littlepage and see what she has to say to someone who’s not a reporter.
One Step Forward, One Step Back
When a homeowner like the Chop, or like the Waverly Dad from the Reddit Post moves out of their house, what will become of it, and of the neighborhood? In the ideal scenario we sell the house at a handsome profit to another owner occupant. Studies like this one have found empirically that what’s long been conventional wisdom is true: home ownership is good not only for owners, but for neighborhoods and the houses themselves as well.
But let’s face facts- Waverly isn’t the kind of place where the best case scenario often comes to pass. We do hold out hope that our house will remain attractive to a conventional buyer, especially a first-time buyer because it’s bound to be one of only a few problem-free conventional sales in a neighborhood plagued persistently by foreclosure listings, short sales, handyman specials and other less-than-ideal listings.
A word about foreclosures: in their 2015 book Zillow Talk: The New Rules of Real Estate Spencer Rascoff and Stan Humphries (Zillow CEO and chief economist respectively) decided to calculate what they call the Real Foreclosure Discount (RFD) to determine the actual effect of foreclosures on home prices. They calculated the Baltimore Area market to have an RFD of 20%, which is in the top five nationally. As they put it on pages 89-90:
“You don’t need a discount to entice someone to move on a home in South Beach, or in Southern California, for instance. Miami’s discount is a scant 2.9% percent. In Sunny San Diego, the RFD is only 2.4 percent.
The flip side of this dynamic is that areas with low demand will see the highest foreclosure discounts. All sellers have to drop their prices sharply to entice people to buy at all, and that includes the sellers of distressed properties, banks. We see this most clearly in Rust Belt cities.”
They don’t say it, but their findings have everything to do with the Black Tax. A glance at Zillow right now shows twenty foreclosed homes in Waverly proper and only four in Hampden proper. While we’d like to sell our house to another owner occupant, it’s much more likely that offers made to us would come from investors in the landlord business. They can make cash offers and avoid paying interest and other charges which are most of homeowners’ monthly expenses, yet they can get away with charging ‘market rate’ rent and taking in a pretty good profit, with houses paying for themselves entirely in 5-10 years. We’re not at all sentimental about the house or the neighborhood. Would we sell to an investor? Hell yes we would.
But only if we can afford it. In the worst case scenario, we move out and put the house up for rent, becoming an investor in our own right. We’ve got no desire to do this, but it beats the hell out of losing many thousands of dollars we don’t have to lose. We know what houses rent for in this area and we’re certain we can cover our mortgage and maybe make a couple hundred every month. As hard as it’s been for us to maintain the house and contribute to and feel invested in the neighborhood, it will be twice as hard for a renter. It won’t get done. In that way, the story of the great success for the first time buyer and the neighborhood on the edge does not have a happy ending, because nothing in the neighborhood has changed.
It’s a shame, and no one is really at fault. What so many young, idealistic renters and out-of-towners can’t understand is that no matter how much a person or a family loves the city, we owe it to ourselves to try to make the best life possible for ourselves and our kids, and unless you’ve got the kind of money that can be thrown at your own problems to solve them, that usually means choosing a life outside Baltimore City. You make the least bad choice, and you follow through on it reluctantly, no matter how much you’ve loved the city.
At the End of the Day
There’s one more thing we’d like to say. For some, the least bad choice is staying in the city. For others there is no choice but to stay. Baltimore’s civic inferiority complex is a long-standing and widely accepted thing. It’s also poorly understood. Just as we find it hard to be proud of our Waverly house, most of Baltimore’s citizens have very little to be truly proud of in our city. When you have so little in which to take pride, when your life is difficult enough that it’s a struggle just to get by you do the natural thing- which is to start taking pride in merely surviving. We’ve been internalizing this bizarre pathology for 300 years in this city. To not want to see it in your children, your spouse- or yourself- is not only healthy, it’s the most important thing in life.
As we write this our city is just a few hours into recovery from the worst rioting any US city has seen since 1992. Right now there are people out cleaning up all over the city. Which is a good, positive thing. There are also those shitass liberals who work at Progressive websites and are complaining all over the Internet from their own cushy white neighborhoods in Brooklyn or Chicago that “The Media” won’t make the cleanup the main story. But the media shouldn’t.
The time for thinkpieces, hot takes, and scolding Tweets is not today. Even inside the city there are those who would be quick to claim the moral high ground. But in the city of Baltimore there is no moral high ground and there never has been. Things here just don’t work that way.
Community cleanup and volunteer efforts are a silver lining on a very Dark Cloud. They’re also not exclusive to Baltimore. People in cities and towns all over the world do that sort of thing after all sorts of disasters. But this is not an earthquake or a tornado. This is something we did to ourselves.
The National Guard is still mobilized in the streets. No one can even say for sure that the imminent danger of civil unrest is actually over. If those cops aren’t indicted and jailed things will certainly get worse before they get better. You may have your opinion about the way things ought to be, but unless you’re living under a curfew this week we don’t want to hear it. We’re not living in the world the way we think it should be, we’re living in the world the way it is.
Everyone thinks they love Baltimore, but few really know it for what it is and truly love it anyway.
It’s a city that’s hard to love.