NCRC Member Profile: Lower Marshall-Shadeland Development Initiative

NCRC’s membership includes more than 600 community-focused organizations in 44 states. Here’s an introduction to one of them, the Lower Marshall-Shadeland Development Initiative (LMSDI) in Pittsburgh.

Tell us about your organization’s mission/focus area.

LMSDI’s mission is to increase the availability of affordable for-sale and rental housing for veterans and community residents through purchasing and restoring vacant and vandalized buildings, and by engaging the for-profit sector as a partner in the solution.

Describe a current challenge in your community and how your organization is addressing this?

LMSDI’s strategy attempts to address the most blighted properties and vacant lots in the Marshall-Shadeland neighborhood, a low- to moderate-income community that is within an Opportunity Zone (the poverty rate is 20.5%). In 2020, LMSDI documented 434 vacant properties in the neighborhood. LMSDI also completed a community engagement survey in September 2020, the first one conducted in the community since 1976.  

However, numerous barriers exist to hamper the creation of affordable housing. For one, Marshall-Shadeland, a minority neighborhood, is part of a larger, citywide system of unequal home mortgage lending. LMSDI’s landmark report showed that, in thirteen years between 2007 and 2019, 906 financial institutions approved $11.8 billion in home mortgage loans throughout the city of Pittsburgh. However, just 3.5% of the loan dollars went to African Americans, and 6.8% of all loan dollars were approved in minority neighborhoods.

Second, many properties are being purchased by absentee owners, creating a destabilizing force. LMSDI’s research found that nearly half (46%) of the residential properties in Marshall-Shadeland are owned by people who do not live in the neighborhood (some owners had addresses in Fairbanks, Alaska, and Tokyo, Japan). Control and stabilization of these vacant properties is a priority for LMSDI.

LMSDI is proposing a combination of research and real-estate-related actions to stabilize and control affordable housing within Marshall-Shadeland through the use of private-market financing mechanisms. 

What prompted you to join NCRC?

We joined NCRC because it is the nation’s leading voice for community reinvestment. LMSDI’s executive director, Stanley Lowe, is a founding member of NCRC, and the director of research, Dan Holland, is a former NCRC vice president of programs. Through a combination of national advocacy, consumer and small business services, and membership support, NCRC has effectively championed fairness and an end to discrimination in lending, housing and business. These objectives align with LMSDI’s, to keep homes in Lower Marshall-Shadeland affordable, safeguard homeowners’ investments and improve access to affordable housing, and establish a neighborhood stabilization program focused on tax abatement, homestead exemptions, housing restoration, and new infill construction. As we move forward, NCRC will be a critical partner as we study and advocate for more equitable lending patterns and practices at the local, state, and national levels.

How have you collaborated, or would you like to collaborate with other organizations to successfully achieve a goal?

We collaborate with many organizations, including Operation Better Block in the Homewood neighborhood, the City of Pittsburgh, city, county, state, and federal elected officials, local financial institutions, Federal Home Loan Bank of Pittsburgh, Housing Authority of the City of Pittsburgh, local foundations, Northside Leadership Conference, the Urban Redevelopment Authority of Pittsburgh, and local residents. Through our partners, LMSDI has been able to assess and measure the level of bank investment in Pittsburgh neighborhoods, understand and itemize vacant properties, and develop a real-estate strategy to acquire and restore vacant homes in Marshall-Shadeland.

Please share a success story or memorable moment from your work.

LMSDI recently published a landmark report that yielded many surprising revelations about bank lending in Pittsburgh.

As it pertains to Marshall-Shadeland, over the course of thirteen years, from 2007 to 2019, banks approved 670 loans for $42.1 million. A detailed examination of lending in the neighborhood, which is 56.2% minority, revealed that Whites received 51.1% of all loan dollars, while Blacks received just 21.8% of all loan dollars. One bank which has maintained a branch in Marshall-Shadeland since 1930 approved just two loans to African Americans for $44,000 in thirteen years.

But our report also uncovered a wider pattern of financial institution neglect of African American neighborhoods over the past 13 years. These findings are summarized below:

1. Demographic data indicate that more than 10,000 African Americans moved out, a decline of 12.7% in a decade. The loss was smaller in Allegheny County, where 4,800 fewer African Americans were recorded over the past ten years, a 3% decrease. An inadequate wealth-building environment combined with opportunities elsewhere, not to mention the rapidly rising cost of housing, were factors in this demographic decline.  
2. Pittsburgh’s minority neighborhoods are reliant on public sources of funds for neighborhood development, where 55% of all funding comes from public sources. The opposite is true in non-minority neighborhoods, where just 8% of funding comes from public sources. This shows the lack of private bank investment in minority communities.
3. Large disparities exist in private bank lending to African Americans and to minority neighborhoods. In the thirteen years between 2007 and 2019, 906 financial institutions approved $11.8 billion in home mortgage loans throughout the city of Pittsburgh.  However, just 3.5% of the loan dollars went to African Americans, and 6.8% of all loan dollars were approved in minority neighborhoods. If 2020 figures are added in ($2 billion in mortgage loans), financial institutions approved nearly $14 billion in home loans between 2007 and 2020.  
4. The 2020 analysis indicates that lending trends for African Americans and to minority neighborhoods are getting worse. In 2020, financial institutions approved just 3% of all loan dollars to African Americans, while lenders approved 5% of all loan dollars to minority communities.
5. When average loan size by race is examined, the inequalities are equally as stark:  the average loan size for African Americans was $5,888, while it was $38,360 for Whites.  These trends inhibit African Americans’ ability to obtain home loans and build wealth.  
6. There were 551 banks that made no loans to African Americans in thirteen years, and 43 of these banks made 10 loans or more to Whites.  
7. In addition, only 14 bank branches are located in minority communities, which collectively hold a mere half-percent (0.45%) of all branch deposits in Pittsburgh. These data attest to the lack of wealth among African Americans in Pittsburgh.  

A link to the report is here: https://www.pghlending.com

Dan Holland is the Lead Project Research Analyst at the Lower Marshall-Shadeland Development Initiative