Business press practitioners and their readers in the New York area who are suffering from crisis fatigue have a few days left to seek inspiration at the Queens Museum of Art, where an exhibit on, of all things, real-estate finance, helps to clarify one’s understanding of what we mean when we talk about the mortgage crisis.
As part of an exhibit called “Red Lines Housing Crisis Learning Center” (the website does not do it justice), the artist and urban planner Damon Rich used the museum’s 9,335-square-foot Panorama of the City of New York, the intricate architectural model built for the 1964 World’s Fair, to mark the location and volume of foreclosures in the five boroughs.
Using data compiled from county clerks and assembled by the Neighborhood Economic Development Advocacy Project, one of the unsung heroes of the mortgage crises, Rich planted a pink plastic marker (actually those things that separate a pizza from the box) to mark blocks with three or more foreclosures. Walk into the spacious room holding the panorama, proceed along the ramp that surrounds it until you’re standing over the Rockaways, and look back as though you were looking west over the city toward New Jersey. Here’s a slide show.
The Times wrote a good arts story on the show back in July.
The pink streak runs from St. Albans and Jamaica, in Queens, through East New York, Flatbush, Bedford-Stuyvesant, and Canarsie, in Brooklyn, back over to Corona, with pockets in the northwest Bronx (the poor in the South Bronx are mostly renters, I am told), and the north shore of Staten Island. Harlem had a few. Manhattan below 125th Street, where the poor also rent, was pink free.
The data come from 2008 lis pendens filings, the legal document that begins a foreclosure, collected from county clerks by aggregation firms to sell, not surprisingly, to real estate investors and financial-services firms seeking to profit from distressed properties. NEPAP used them to help make the map. I wondered what the map would look like if it included, not just foreclosures, but mortgage defaults or even delinquencies? It would be a pink-out.
I don’t think I have to draw you a picture, so to speak. The map vividly brings to focus the issues of class and race that are at the heart of the mortgage crisis, and by extension, the global financial crisis. All those mortgage-backed securities, the CDOs and CDOs-squared, with all the CDSs written on them, had to be “backed” by mortgages from somewhere. But where?
Bedford-Stuyvesant seems to have been a center of lower-middle-class homeownership and, judging from the map, New York’s ground zero in the mortgage wipeout. And, of course, the mortgage crisis is a national story, so there are similar maps to be constructed, mentally at least, for Newark, Cleveland, Chicago, etc.
The Wall Street Journal‘s Mark Whitehouse did a fine story in 2007 on the subprime wipeout’s effect on a middle class Detroit neighborhood. The movie “American Casino,” starring Bloomberg reporter and Audit interviewee Mark Pittman, dwelt at some length on the effect on Baltimore neighborhoods. The Times‘s Michael Powell and Janet
Roberts wrote and mapped the issue powerfully in May. There have been other good things done.
But the story is broad, and it is deep. It involves whole communities and entire classes, including and especially low-income strivers who had made it up the first rung of the economic ladder. Recall, for instance, that only nine percent of subprime mortgages went to first-time homebuyers, while fifteen percent of subprime loans made between 1998 and 2006 have ended or will likely end in foreclosure, as the Center for Responsible Lending showed. Then recall, according to another important WSJ story from 2007, by Rick Brooks and Ruth Simon, showing that more than half of subprime mortgages went to borrowers with prime credit. Then recall the mortgage boiler rooms, and the sex-for-mortgages frenzy of that era, as recounted by BusinessWeek‘s Mara Der Hovanesian last year. Then think about the bailout, bonuses, financial-services reform, you name it.
Finally, if you are in further need of inspiration, walk out of the panorama room into the main part of the “Redlines” exhibit, past the amusing 40-foot plywood representation of interest rates over the years, the “S&L railroad,” recalling the similarities between two real estate scandals, past the giant, hollow representation of the head of Frederick Babcock, pioneer of modern real estate appraisal, to a model of a few blocks of downtown Newark, where foreclosed-upon buildings are colored red and the mortgagor identified by a little flag on top emblazoned with the corporate logo. You’ll see on one side of Seymour Avenue, 10 of 18 buildings are in foreclosure, and the other side seven of 11. The lenders are Deutsche Bank, Deutsche Bank, Chase, Chase, Wamu, New Century, Countrywide, Lehman, etc.
The exhibit closes Sunday. Would that I had seen it earlier. Perhaps you still can.
Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.