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The Buffalo News
published a series of articles
and an OP-ED on the Buffalo housing crisis this week. Each article
had a particular take and as the events of the week unfolded, from
the auction of nearly 2000 houses and open lots, a second key (pun)
development occurred with the consolidation of First Niagara Bank
with Key Corp – the #2 and #3 banks in the WNY region.
The
Monday (10/26) edition had two stories – both front page. One
dealt with putting pressure on banks with their zombie houses and the
other dealt with house buyers at the upcoming foreclosure action.
The
zombie house article focuses on the actions of Buffalo Comptroller
Mark Schroeder and his attempt to force JP Morgan Chase (I remember
when those were 2 separate banking firms) to hasten its action on
foreclosed houses by withdrawing money from the Wall Street giant and
putting it into a local bank – First Niagara. Of course the banks
try to blame New York's
foreclosure process as being “too long,” but that argument is
easily shot down by Katie Lockhart of the WNY
Law Center with the statement
that if they have a high number of foreclosures, they should “hire
more lawyers” to handle them. This, of course, flies in the face
of capitalism which has as its goal creating
more profits at the hands of fewer workers.
Seriously, that is a logical answer and we all know that capitalism
is far from logical. That and lawyers are really expensive. It's
easier to let the house fall into total disrepair, have Erie County
demolish it and then reimburse the demolition than to pay for
lawyers.
Early
in the article is a telling statistic about foreclosure numbers.
They are higher in the affluent white suburbs than in the minority
dominated city. Is that the real problem? Zombie houses driving
down the house values of the affluent? 800 zombie houses and only
122 located in Buffalo proper. That's 678 spread out through the more
white and affluent areas than in the county. This
“crisis” is not about the poor, lower class minorities – it's
about the housing values in the segregated white suburbs.
Buffalo
and Erie County politicians are proposing legislation to reform the
process and make the banks more responsible for communication with
the mortgage holders, but this is just an attempt at reforming
capitalism. Might as well rearrange deck chairs on the Titanic. It
will be about as productive. The
banks will fight anything that makes them responsible.
A
second article on Monday told of how auction prices are going up,
driving out of the auction people who buy houses for rental purposes.
It misses the point that people are also buying houses to “flip”
them – something that the Buffalo are TV stations cover quite well.
Houses bought and then quickly resold at a profit. It does mention
that housing prices are being driven up by the building of the
Buffalo Medical corridor – a large amount of taxpayer subsidized
and funded construction of medical research and manufacturing
complexes that will bring in many high paying jobs. Property
managers are buying up homes and hoping to fix them up in order to cash in on the new medical industrial base. Most of the people
currently working in these jobs live in the suburbs though and add to
the increasing traffic congestion and parking woes. Buffalo could
address this by adding to the Metro-Rail and bus service routes.
There is talk of this. And that is where it is locked right now –
all talk. Hopefully Buffalo and Erie County make a greater effort to
expand public transportation, which would decrease the amount of
traffic and parking woes in the city.
On
Tuesday the News
covered day one of the official auction and the hopes that some
people had. First time home buyers, immigrants hoping to score a
place to live in an affordable city, and property managers –
hoping to score properties that they could develop and make money on.
In an auction that normally see 4-500 bidders, nearly 1200 were
present, Prices were higher in years past and even open lots were in
demand.
In
a paradoxical paragraph, the writer reports that Buffalo has a high
vacancy rate and that the houses are unlivable. How long have they
been vacant? Why is the city not pursuing the property owners (read
banks) more vigorously? So
why auction off junk? In the hopes that it gets developed? And for
whom? The poor who lack homes or are they hoping to cash in on the
medical corridor?
On
Wednesday, in an Op-Ed Piece, a member of the Buffalo Business
Council (lamely) tries to defend the banks. The usual lines here –
the law to too difficult, the process is too long, there are too
many properties, and the lines go on. So don't blame the banks.
Right. Who created the sub-prime loans? Who gave bad loans to
people that should not have received them? Who put African American
and other minority applicants into sub-prime mortgages when a regular
“plain vanilla” mortgage would have guaranteed that the loan
would have been paid off in due time? Who red-lines communities?
Who sent loan officials to African American churches to recruit
minorities for sub-prime loans? I have seen too many stories on
Democracy Now and The
Real New Network on how banks
did all of the above and, when caught red handed, did everything they
could to get out of trouble while keeping their hands in the cookie
jar. This does not include articles in The Nation, In
These Times, The Progressive, Z Magazine, among
others, including periodicals in the capitalist press. No, I don't
buy the Op-Ed. It is an opinion piece that has been shown time and
time again to be a lie. Why
the News wasted
precious ink on it is beyond my understanding. Nobody that I've
talked to believed the banks' story.
Saturday
saw an article on red-lining – a policy where banks and the
government look at areas where the communities are “safe” to
invest in and places where investment is to be avoided.
Theoretically the government
has stopped redlining, but the banks have continued it and expanded
the way which they practice it. The new method of redlining
involves where bank branches are set up, Plain and simple, not in
areas where there are large African-American and
other minority populations.
Banks have been called out on this, fined, and have agreed to open
up branches in these communities, but will this really change
anything? If you think
“Yes,” read the next section.
The
last series of articles concern events that were made public on
Thursday and have been
expanded on every day since. This involves the merger of the #2 and
#3 banks in the Buffalo / Western New York region into one. Monopoly
capitalism at its finest. Branches will be consolidated and closed, most likely in the poorer areas of the city. Call it “back-door
redlining.” Workers will be laid off, and the people of Buffalo will have a more
difficult time accessing the financial services they need. This, of
course, after the Buffalo comptroller withdrew $45 million from JP
Morgan and put it into First Niagara. The biggest concern was about
how this merger would affect stock holders, not everyday people,
like depositors or workers.
So,
what to do? That is the question. The
“socialist solutions” are as follows:
First:
Buffalo and Erie County need to follow the example of North Dakota
and open up a Municipal (Public)
Bank of Buffalo. Use the tax dollars to fund it, make loans to the
people of Buffalo and Erie County and get away from the corporate
banks that are damaging our communities. And the Bank of ND has an
added benefit – the interest from loans goes to help with the
budget. And the Bank also stayed away from the sub-prime loans,
thus avoiding the crisis. It also has the freedom to negotiate with
home owners about loans and works to keep people in their homes.
Added bonus for the people of the community all around. At
a minimum Buffalo and Erie County should put their finances into
credit unions. Public
banks and credit unions are the only way to escape the clutches of
the Wall Street bankers. And how to staff? The unemployed tellers &
managers from the Key-First Niagara bank merger. This will provide
jobs as well to people who have the knowledge and skills already.
Second:
The corporate banks need to
be billed for property upkeep on the zombie houses. No way around
that. The empty houses could be “seized” by the city and used as
homeless shelters. Bill the banks for that as well. And if a house is too
unsafe for habitation, have the banks pay for the demolition. The
empty plot could be redeveloped or turned into a community garden –
good food for the impoverished neighbourhoods. There are a number of
organizations in the Buffalo and Erie County area that know how to do
this very effectively. The
News has reported on
several of them over the years.
Third:
More public transportation. This works to create jobs for Buffalo
Metro and alleviates congestion on the roads and in the parking areas down-town. Public transportation in Buffalo has suffered over the
years and revitalizing it will address problems that people in the
region will have. And businesses talk about how workers have
problems getting to work. A properly staffed (with buses and
drivers) public transportation system will help workers and
businesses across Erie and Niagara counties.
And
those are solutions you can take to the bank and live on.
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