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Upscale Black enclaves face changing neighborhoods

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Baldwin Hills resident Jack Horn places a leash on his daughter’s American Eskimo dog, while his wife looks at him and laughs. “You are going to walk the dog this morning?” she asks.

“Yes. I promised our daughter, Nettie, I would make sure her dog is not eaten by coyotes,” explained Horn, who adds with a laugh, “I can meet new White people out walking their dogs. I saw White people jogging in the ‘Jungle’ yesterday morning.”

Horn is referring to the community known as the “Jungle,” or Baldwin Village. He’s begun to use his walks to observe new neighbors who don’t resemble the old timers in the area.

During this particular walk, Horn ends up on Don Diablo Street to visit a high school friend—real estate developer Charles James. The developer is building a speculative home in his upscale Baldwin Hills neighborhood.

Horn describes the project as a high-tech dwelling an entertainer might own. The view from the house includes skyscrapers in Westwood, downtown Los Angeles, and everything between.

“You know more than likely, Blacks will not be able to afford this house,” Horn jokingly tells James.

He is alluding to the trend in the local real estate market—gentrification.

“We now live in a global community,” James responds, “and gentrification is simply a by-product of that.”

Stuart Gabriel, professor of finance at the UCLA Anderson School of Business, agrees with James.

In an interview, he describes how Los Angeles belongs to a small group of cities around the globe known in academic literature as superstar cities. In the United States, these municipalities are New York, Boston, Washington, D.C., and Los Angeles.

“These superstar cities, are all coastal and highly desired places in which to live by rich foreign nationals,” he says. “That means a higher demand for properties in those cities. This demand is governed first and foremost by global factors, regional factors are simply a reaction to the global factors.

The global factors are usually foreigners investing in the superstar cities real estate due to governmental instability in their home countries; foreign nationals are believed to want a sound investment in a stable country. They do not want to invest somewhere that may be threatened by civil war, military coup, or an unstable  economy like Greece,” Gabriel explains. Consequently, the UCLA professor said foreign nationals purchase prime property in Bel Air, Pacific Palisades, Malibu and Beverly Hills.

“Regional factors that also impact housing in the superstar cities include local investors going into areas like Venice, Mar Vista, Culver City, Westchester and the Hollywood Hills and demolishing smaller, less elaborate, affordable real estate  middle-income Whites might buy, and building multimillion dollar homes,” he says.

“This creates a trickle-down effect, where Whites who may have bought homes in White affluent neighborhoods, look for alternatives in places like Baldwin Hills, View Park, Windsor Hills, Ladera, and Leimert Park. Consquently, Whites are realizing you can get more bang for the buck in these areas. These investors and some potential home buyers come with all cash, while some African Americans who want to buy in the area, often have to rely on a Federal Housing Administration loan. I’m sure real estate developer Charles James would prefer all cash for his Don Diablo project.”

Real estate buyers are often required by banks to provide a property appraisal, a calculation of real estate value based on recent real estate sales within a neighborhood as a prerequsite to funding a loan.

Robert Wilson, a real estate appraiser, believes he has home value analysis down to a science. He is eager to produce an accurate and precise analysis, because this is his livelihood, and  like many other African American appraisers, he feels that business seems to be bouncing back.

As an appraiser, Wilson often hears about individuals who buy real estate in Baldwin Hills, View Park and Ladera because they can make more money on such investments than what they can get from banks at current interest rates. Wilson even believes he may have discovered a Beverly Hills resident doing just that.

While surveying recent sales in Baldwin Hills and View Park, Wilson kept encountering the name Lisa Fields on the title of several properties. Researching Fields, Wilson found that she resides in Beverly Hills and appears to have recently purchased four homes in the Baldwin Hills and View Park area; two remain vacant and two have been leased out.

Wilson believes individuals like Fields are speculators who drive up the prices of property that ordinarily African Americans would purchase. This forces Blacks who want to live in those areas to look elsewhere because of limited inventory.

“It’s funny,” Wilson says. “Years ago many Whites had no idea that this area existed. I have a friend, a broker who lives in Manhattan Beach. He said he has traveled La Brea for years commuting home and bypassing Baldwin Hills, View Park, and Ladera, and never knew these homes existed. These communities were hidden gems.”

Steven Ernest Sailer, a journalist for Udare and Takis magazines, writes about race relations, gender issues, politics, and immigration. He believes subconsciously that Whites are attracted to View Park, Baldwin Hills and Ladera for more than the affordable prices. There is also the idea of elevation.

In a recent opinion piece on gentrification in the New Republic, Sailer describes how South Los Angeles is flat and living on flat land has scared wealthy White Angelenos since the 1992 riots.

According to Sailer, “A fear of apocalyptic mob violence directed toward Whites has been endemic in elite Southern California circles since at least Nathanael West’s 1939 novel ‘The Day of the Locust.” In this novel, living in the hills proves life saving for Angelenos. Standing at an elevation of 338 feet (average elevation of Baldwin Hills) gives people a false sense of security from rioters.

This isn’t the first article Sailer wrote on Whites purchasing homes in African American neighborhoods; he also wrote an opinion piece in the mid-1990s.

He  remembers the West Adams district showing the first signs of gentrification in the mid-1990s. It was a slow process. A few movie studios purchased homes in which to film shows such as “Six Feet Under,” and White gay couples also purchased homes.

The majority of homes available today in Baldwin Hills, View Park, and Ladera were once owned by African Americans foreclosed on during the mortgage meltdown in 2008. The fact is, the influx of non-Blacks purchasing such homes has diversified the last affluent historically Black community west of the Mississippi, according to a Black woman who once owned her own real estate firm. (She wants to remain anonymous for fear of losing her current job with a major real estate company).

The agent (we will refer to as “Z”) describes how news coverage of gentrification ignores how the 2008 mortgage meltdown and White control of foreclosed real estate stock ate away at the African American real estate industry.

“Z” describes how a large majority of African American realtors worked as mortgage brokers in addition to owning real estate businesses. They also had their own in-house mortgage department, which was very helpful to African Americans seeking mortgages.

“The realtor and broker would review a buyer’s loan application, and show you how to clean up your credit history,” she says. “They would take time with you and assist you in getting qualified. Once you were qualified, the same realtor-broker would contact the larger banks and get you a loan based on who had the best deal from the major banks like Chase, Bank of America, or Wells Fargo. After the 2008 meltdown, the larger banks stopped dealing with smaller Black realtor-brokers, and as a result, the African American broker almost ceased to exist.”

According to “Z,” Black realtors typically did not receive foreclosure listings. Instead, this information went to White-owned real estate firms like Joyce Essex. A staff member of the real estate firm Essex Harvey (speaking anonymously) said minority firms were overlooked because banks believed they lacked technological savvy and could not accommodate the large surplus of foreclosures.

The Consolidated Board of Realtors, an organization that represents Blacks in real estate, eventually did complain to the banks and acquired a very small number of foreclosures as a result.

Organizations like the Consolidated Board of Realtors whose members are predominantly Black offer ancillary services such as appraisals and inspections.

Nevertheless, African American real estate appraisers found themselves out of work due to a shift in who was getting real estate inventory and because banks were using broker price opinions (BOP) and in-house appraisers to appraise real estate. Banks that were bailed out by the government during 2008 took more control of the industry and spanked little guys (minority firms),” explained “Z.”

“Z” believes that a few Black firms such as Lee Coleman’s the Service Company (formerly Century 21) and Coldwell Banker on Manchester Avenue have sucessfully fought to retain their businesses but, the majority of Black realtors and  mortgage brokers now work for Keller Williams on West Manchester and Marina Del Rey. “Z” also says there are a few existing private agents like Ted Brass who have weathered the storm and stayed in business because of wise investments.

African Americans may worry about property taxes rising due to aggressive buyers making lofty offers on homes, “Z” says. She points out that African Americans may also be bothered about the prospect of losing their neighborhoods to Whites.

Sailer refers to this as a delusion because the eastside of Los Angeles is being taken over by Hispanics and now the African American westside is being taken over by Whites.

In a recent survey OW asked African Americans in View Park, Baldwin Hills, and Leimert Park about their views on gentrification. A number of survey respondents said that the thought of their communities changing from Black to White bothered them. Some polled expressed fear about White residents taking control of home association meetings. One complained about comments White residents have left on a blog, describing a “suspcious looking Black teenager carrying a back pack” (during a period of home burglaries.)

Gentrification creates an economic shift which will eventually price Blacks out of the market.

Investors like Field’s artifically increase housing value that raise property taxes. This impacts residents who are in it for the long haul.

However, many blamed banks for gentrification, not Whites.

In regards to the recent OW survey University of San Francisco Media Professor Javon Johnson believes interaction on blogs can be useful, but care should be taken when interacting with people from different cultures. He also reminds Blacks that Whites who settle in their communities tend to be liberal.

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