Panel Paper: Affordable Housing Goals and Access to Mortgage Credit: Housing Policy and Patterns of Residential Segregation

Saturday, November 10, 2012 : 11:15 AM
International B (Sheraton Baltimore City Center Hotel)

*Names in bold indicate Presenter

Michael Norton, Temple University; Research for Action

This paper adopts a spatial approach to examine the distribution of mortgage credit across the Philadelphia region to broadly provide insight into the way historical patterns of differential access to mortgage credit have evolved in the 21st century.  Departing from the assumption that space itself matters in different ways for different individuals and institutions this paper explicitly foregrounds the importance of where mortgage credit is deployed to better understand how different actors’ relationship to space can shape the capacity of space itself to support a satisfying way of life for residents while simultaneously generating continuous profits for space-less institutional actors.  Investigating the relationship between the institutional actors that issue and secure mortgage credit and the federal government, this paper sits at the intersection of differential access to mortgage credit in the primary market, secondary market purchasing patterns and Federal housing policies that structure both primary and secondary markets.

The principle challenge for this paper is to extend the expansive literature detailing the myriad inequalities present in primary mortgage markets into the secondary market.  In particular, this paper will examine the relationship between Fannie Mae and Freddie Mac purchasing patterns and neighborhood quality in the Philadelphia region in the lead up to the recent housing bust.  From a policy perspective, this paper will directly examine the relationship between the GSE’s performance meeting their affordable housing goals and neighborhood quality in the region.  As a region historically characterized by rigid patterns of racial and economic segregation, the Philadelphia region provides a useful market to assess the impact of Federal policies designed to expand mortgage credit to historically underserved borrowers and communities.  By directly examining the spatial relationship between access to credit and neighborhood quality in the Philadelphia region, this paper will contribute to a better understanding of how Federal housing policies does, or does not, influence differential access to mortgage credit across a persistently segregated metropolitan region.