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This dissertation examines the overlap of the racial composition of a neighborhood and the existence of a dual mortgage market in which prime and subprime lenders serve different neighborhoods and borrowers. Does subprime lending represent the democratization of credit or does it serve to track people by race? This dissertation employs Home Mortgage Disclosure Act Data, U.S. Census Data and the HUD Subprime Lender List to identify subprime loans. I use Hierarchical Linear Modeling to predict the likelihood of subprime for a borrower in Philadelphia, Baltimore, San Francisco and Alameda County California. The findings demonstrate that blacks and borrowers in black neighborhoods have a higher likelihood of originating a subprime loan than whites or borrowers in white neighborhoods. Further, blacks borrowing in largely white neighborhoods have an even higher likelihood of originating a subprime loan compared to their white neighbors than do blacks borrowing in largely black neighborhoods. These findings indicate that subprime lenders not only serve different neighborhoods, but also different borrowers regardless of the neighborhood in which they are borrowing and support the existence of a dual mortgage market that is defined by race. The results from the analysis examining the consequences of subprime lending for neighborhoods indicate that after controlling for neighborhood characteristics, the positive relationship between earlier and later rates of subprime lending disappears. Also, while higher rates of subprime refinance lending were associated with a decrease in neighborhood median income in 2000, subprime lending was associated with positive changes in median house value and percent of homeowners that are black in the neighborhood, although the effects of subprime on median house value disappeared after controlling for neighborhood conditions. The study points to the continued difficulties that black borrowers and borrowers in black neighborhoods face in obtaining a fair loan. As lending practices are reformed, it is important to keep in mind the need to ensure that minority borrowers who are in the position to afford a home loan maintain the ability to get a loan, but increased care must be taken to ensure that they obtain the ability to do so on fair terms. / Sociology

In the wake of Emancipation, African Americans viewed land and home ownership as an essential element of their "citizenship rights." However, efforts to achieve such ownership in the postbellum era were often stymied by credit discrimination as many blacks were ensnared in a system of debt peonage. Despite such obstacles, African Americans achieved land ownership in surprising numbers in rural and urban areas in the South. At the beginning of the twentieth century, millions of African Americans began leaving the South for the North with continued aspirations of homeownership. As blacks sought to fulfill the American Dream, many financial institutions refused to provide loans to them or provided loans with onerous terms and conditions. In response, a small group of African American leaders, working in conjunction with a number of the major black churches in Philadelphia, built the largest network of race financial institutions in the United States to provide credit to black home buyers. The leaders recognized economic development through homeownership as an integral piece of the larger civil rights movement dedicated to challenging white supremacy. The race financial institutions successfully provided hundreds of mortgage loans to African Americans and were a key reason for the tripling of the black homeownership rate in Philadelphia from 1910 to 1930. During the Great Depression, the federal government revolutionized home financing with a series of programs that greatly expanded homeownership. However, the programs, such as those of the Federal Housing Administration, resulted in blacks being subjected to redlining and denied access to credit. In response, blacks were often forced to turn to alternative sources of high cost credit to finance the purchase of homes. Nevertheless, as a new wave of African American migrants arrived to Philadelphia during post-World War II era, blacks fought to purchase homes and two major race financial institutions continued to provide mortgage loans to African Americans in Philadelphia. The resolve of blacks to overcome credit discrimination to purchase homes through the creation of race financial institutions was a key part of the broader struggle for civil rights in the United States. / History

This dissertation explores the ways in which housing markets based on mortgage-backed homeownership develop in an emerging economy. This is a case study of the institutions, actors, and financial practices at play. It contributes to the debates in the areas of the financialization of housing, the production of urban space, and economic globalization. I focus on developments in Peru from 1990-2014. During this period Peru’s national government implemented the country’s first major housing policy, which focused solely on the provision of homeownership and more specifically, making it easier for households to borrow money for the purchase of a new home. Through these actions, the government laid the foundation for a housing market that would be based on access to credit. This was a fundamental shift in Peru. This dissertation examined these developments and asked a number of questions. How were homeownership and the production of mortgages supported through Peru’s national policy? How had global actors and institutions facilitated homeownership and its financing? And lastly, were homeownership strategies being used as a tool for urban development? For this research, I applied an institutional approach to highlight the deliberate ways in which homeownership was supported in Peru. I focused on international, national, and local officials as well as developers and lenders who influenced the availability or scarcity of mortgage finance and the construction of new homes. I focused on the political and economic arrangements that transform the built environment into pieces that can be bought and sold. I collected data for this research from 1.) archival records and documents from Peruvian institutions and international financial institutions (IFIs) and 2.) interviews with representatives from these organizations, often identified in the records (n=36). Data from archival research and interviews were used to explore the interplay between interests, power, and ideas between national and international institutions. This allowed me to bring the temporal chain of events into focus and develop the causal connections between actions and support from IFIs. I also examined the extent to which the government’s agenda and priorities coincided and diverged from the priorities set forth by the IFIs. Findings illustrate a compelling story about an important aspect of modern day urbanization in a globalizing world where efforts are underway to expand transnational networks of finance and investment. Homeownership is not a natural phenomenon as we may be led to believe; instead, it reflects interests aimed at expanding the financial sector, investment in the built environment and, ultimately, the global economy. Overall, by examining the institutional and spatial nexus buttressing homeownership in Peru, this study demonstrates how land and housing across the globe are being incorporated into a market system and subsequently, how these practices intensify the accumulation of capital in cities. In Chapter 3, I trace the institutionalization of homeownership in Peru and the key motivations behind such actions. Since the 1990’s, the government has introduced policies and programs that promote homeownership as the primary response to the country’s lack of affordable and adequate housing. Similar to the US, the government has taken a leading role in arranging the housing and finance sectors for the creation of a mortgage-based housing market. Peru’s homeownership policy has embraced many neoliberal principles and is aimed at the restructuring of the housing market. The national government created the conditions so that the private real estate market could be arranged for the extraction of value. The premise being that once ‘enabled’, the private sector could meet the housing needs of low-income and other vulnerable populations. The government’s general approach was to reduce market informality (i.e., through titling and registration) and build confidence among residents and the private sector in a seemingly predictable institution of ownership and housing finance (i.e. through financial incentives and public promotion). Findings show that efforts to integrate these markets resulted in housing assistance for the creditworthy and created the assumption that one needed a loan to live in a house. Housing became increasingly treated as a product to be bought and sold on the market instead of a social good. And homeownership as the lynchpin tying the housing and financial sectors together. Chapter 4 highlights the role of IFIs in developing homeownership in Peru. Findings show that the government worked closely with IFIs to set up a strong mortgage market that would support widespread homeownership and the development of a secondary mortgage market. The national government and IFIs shared varying levels of consensus around engaging the private sector in housing provision, financial sophistication and standardization in mortgage lending, and deepening the financial sector. The case of Peru is useful for understanding the role of the national government in developing institutionalized mechanisms for housing finance and how this role has been facilitated by IFIs. These findings serve as an empirical example of global capitalism at work. Chapter 5 demonstrates how mortgage-backed homeownership in Peru was also linked to place-making and urban development. Housing constructed and purchased with FMV subsidies was developed in urbanizing areas and concentrated in certain neighborhoods. This was not by accident and instead, the concentration of FMV properties throughout Peru revealed the speculative nature of such decision-making. Homeownership was part of a larger strategy to root investment in certain places and create more value within the built environment upon which loans could be made. Mortgage-backed homeownership requires certain amenities and structuring that create and protect the value of housing and the surrounding neighborhood. In this way, housing policies have the power to generate a particular type of urban development to segregate groups and to concentrate investment in certain places. Finally, it is important to recognize that these findings are not unique to Peru. Practices to support mortgage-backed homeownership are taking hold across the world and are being led by national and international actors. I refer to the spread of these practices as the globalization of homeownership. The concept captures the economic, political, and ideological aspects of mortgage-backed homeownership. First, this research revealed the spread of a homeownership ideology. Despite the recent housing crisis that led to financial repercussions across the world, policymakers in Peru continue to have faith in mortgage-backed homeownership. Findings demonstrate how norms and taken-for-granted beliefs surrounding debt-encumbered homeownership become are transferred and institutionalized. Second, efforts to support homeownership in Peru and many other emerging economies are not insular. Guidance and upfront financing to establish critical institutions to support homeownership, such as mortgage guarantees and entities developed to support the primary and secondary mortgage markets, have come from a network of transnational actors. These recommendations and projects are in line with other efforts to promote economic liberalization and open markets. Lastly, I refer to the spread of national governments devoting resources to expand access to housing finance as the globalization of homeownership. Homeownership has become an international practice to intensify land values, create a market system within housing, and promote economic globalization through mortgage-backed homeownership. As homes become regarded as commodities, actual homes, mortgages, and other practices and institutions associated with homeownership are becoming more similar across countries. The infrastructure surrounding homeownership in Nigeria, now resembles that of Peru. These practices impose market principles in the organization of housing sectors, bolster investor confidence, and promote the flow of capital in and out of housing markets. The globalization of homeownership will remain an important area of study because of the impact it has on international, national, and local economies and the stratification it imposes on households and places. Capital will flow to certain places and creditworthy households will benefit. These efforts are in line with other neoliberal reforms and reflect a reliance on the market to meet the needs of those able to participate. This is to suggest that access to mortgage credit will increasingly structure housing and spatial opportunities across the globe and likely lead to greater inequality. / Sociology

Over the last decade, the United States had experienced a boom and bust in the subprime mortgage market. The ups and downs of the subprime mortgage market became a primary factor triggering the most severe global economic recession since the Great Depression. The dissertation contributes to the literature by inquiring whether the subprime lending has exacerbated social inequity between subprime neighborhoods and other neighborhoods, through analyzing the subprime mortgage market in the Philadelphia MSA from 2000 through 2010, and focusing on two research questions: (1) the spatial distribution of subprime mortgages across census tracts; (2) the relationship between subprime intensities and housing price variations across zip-code areas. As the dissertation's study area expands from an urban to a MSA, spatial heterogeneity merits attention in this relative huge area. As a result, this dissertation not only employs a global, Ordinary Least Squares (OLS) model, but also a local, Geographically Weighted Regression (GWR) model to examine spatial variations across different neighborhoods. For the first research question, the dissertation finds: (1) a higher concentration of higher-priced mortgage for purchase and refinance in tracts with higher proportion of African-American and Hispanic residents, lower median household incomes, higher-unemployment rates, lower self-employment rates, and higher capitalization rates, after controlling for other variables; (2) the association between higher-priced mortgages and explanatory variables varies across census tracts. Because the dynamics of neighborhood subprime originations are heterogamous, the association between subprime mortgage origination and socioeconomic characteristics may be stronger in some neighborhoods than other neighborhoods. For the second research question, the dissertation finds: (1) subprime mortgage shares have a significant negative association with housing price appreciations during the housing boom period (2001-2006); (2) subprime mortgage shares have a significant positive association with housing price depreciations during the housing bust period (2006-2010); and (3) the association between housing price variations and explanatory variables differs across geographic submarkets within the Philadelphia region. The result confirms that areas where more residents obtained subprime mortgages have suffered more severely than other from the housing market's ups and downs over the last decade. The empirical results can draw broad policy implications. The primary implication is that it is time for the federal government to rethink its homeownership policy. Increased homeownership levels arising from the expansion of subprime mortgages are not sustainable, and subprime lending has exacerbated social inequity between subprime neighborhoods and other neighborhoods. The second implication is that the government needs to enforce the fair lending laws, because the cluster of subprime mortgage origination reflects the unequal opportunities of prime mortgage accessibility across different neighborhoods. The third implication is that the government needs to promote place-based policy making. As the GWR demonstrates, the dynamics of the mortgage market and housing market are uneven across different neighborhoods. Therefore, place-based making can increase the efficiency of public policy. These implications based on the dissertation's empirical results are helpful for designing more efficient, effective, and sustainable housing policies of the United States. / Urban Studies