For the Trump Administration: Affordable housing means middle-income housing for counties with 43 million people

The Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) are proposing regulatory changes to the Community Reinvestment Act (CRA) that make it easier for banks to get an “Outstanding” rating while underserving people and communities with low- and moderate-incomes (LMI) that it was meant to help.

Under the new proposed CRA list of qualifying activities, financing for affordable rental housing intended for middle-income households in “high-cost” counties would qualify as CRA credit to banks under their community development obligations.[1] What this means is that banks will get as much credit financing the construction of affordable rental housing designed for middle-income individuals and families as they would for rental housing focused on low-income individuals and families.

This change would impact 32 counties across the U.S., including some of the most populous ones, encompassing 43 million people or 13% of the United States population. The impacted places are cities like Los Angeles, San Diego, Miami and most of metropolitan New York. The list encompasses not only cities, but places like Humboldt, Madera and Tulare counties in California. These areas are included not because of high housing costs but most likely because low-income levels are driving up cost burden ratios. These are rural places of high poverty, in which low-income housing is crucial. What will be the incentive for banks to provide community development loans or investments to build rental units for low- and moderate-income families in these areas, when they can finance more profitable rental housing for middle-income families and get the same credit?

The list shows the impacted counties, and the income range for what qualifies as middle-income in these areas:high cost counties

(Source: American Community Survey 1-year table B25106 and S0101, FFIEC Median Family Income report 2019 https://www.ffiec.gov/medianincome.htm)


[1] High-cost is defined in the proposed regulation as a county in which 40% or more of the households pay 30% or more of their monthly income for housing.

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Redlining and Neighborhood Health

Before the pandemic devastated minority communities, banks and government officials starved them of capital.

Lower-income and minority neighborhoods that were intentionally cut off from lending and investment decades ago today suffer not only from reduced wealth and greater poverty, but from lower life expectancy and higher prevalence of chronic diseases that are risk factors for poor outcomes from COVID-19, a new study shows.

The new study, from the National Community Reinvestment Coalition (NCRC) with researchers from the University of Wisconsin–Milwaukee Joseph J. Zilber School of Public Health and the University of Richmond’s Digital Scholarship Lab, compared 1930’s maps of government-sanctioned lending discrimination zones with current census and public health data.

Table of Content

  • Executive Summary
  • Introduction
  • Redlining, the HOLC Maps and Segregation
  • Segregation, Public Health and COVID-19
  • Methods
  • Results
  • Discussion
  • Conclusion and Policy Recommendations
  • Citations
  • Appendix

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