Dallas’ new responsible banking ordinance is a step toward racial equity
Before serving on the Dallas City CouncilI didn’t know as much about housing estates as I do now, but I knew a lot about life south of Interstate 30. I grew up in Pleasant Grove. Our community is an economically disadvantaged, majority minority area with pockets of significant concentrations of low income apartments; simply walk down Bruton Road between St. Augustine Drive and Masters Drive, or along Great Trinity Forest Way between US Highway 175 and Pemberton Hill Road.
Not surprisingly, these areas have been referred to as “targeted action area grids”. These TAAG areas are mostly scattered south of I-30 and come under special police scrutiny due to high rates of crime and violence.
Since I became a member of the Dallas City Council, most developers who have approached me have been interested in using low-income housing tax credits to finance apartments, but I have always pushed back. Additionally, banks are contributing to this problem by investing in many of these subsidized apartments, rather than investing directly in individuals and small businesses in Southeast Dallas and other underserved areas. Allowing low-income tax credit housing to substitute for home loans south of I-30 is a modern red line and prevents minorities from getting rich through homeownership.
I-30, the freeway that runs through Dallas from Mesquite to Grand Prairie, is more than a physical barrier separating the northern and southern parts of the city. It is an arbitrary boundary that separates the city’s predominantly white population to the north from the city’s predominantly black and Latino communities to the south.
It is also an economic barrier, promoting economic growth in North Dallas and contributing to economic decline in South Dallas. For decades, the practice of redlining has been used by the mortgage industry to deny applicants loans based on their race. This discriminatory practice disproportionately affected people living south of I-30, resulting in significantly fewer mortgages and small business loans for blacks and Latinos. The book The color of the law provides a detailed history of practices used by US governments to racially segregate cities.
The Fair Housing Act of 1968 made it illegal to discriminate against protected classes in real estate transactions and Community Reinvestment Act 1977 demands that federal regulators encourage banks to meet the credit needs of low- and middle-income people and reinvest in minority neighborhoods that banks have long ignored. But instead of lending directly to individuals south of I-30, the banks chose to invest their dollars in low-income apartments (helping them meet CRA standards) while benefiting from low-income housing tax credits, which I think is another kind of redlining.
Lending to a developer for low-income, multi-family developments is not the same as lending to single-family homeowners. And a bank’s loan portfolio must reflect the risks to which it is exposed. But South Dallas residents would be better served with more home loans.
It is well known that changing from tenant to owner changes a life. It is the foundation for wealth creation, increased economic development, good schools and public safety. Not only does owning a home have a huge impact on the lives of homeowners and their families, but it also builds trust in a community and creates the kind of change that would generally not be possible without a bank willing to lend to all people. solvent. .
Although the city cannot regulate banks, we have a responsibility to address inequality. That’s why my city council colleagues and I, along with the city’s chief financial officer, the city attorney’s office, and community members, worked to develop a banking ordinance. responsible. This ordinance allows the city to assess the lending practices of banks that wish to be the depository of more than $250 million in city taxes and requires banks to disclose information about residential and small business loans made to borrowers in underserved areas. The goal is to help overcome systemic barriers and the lingering effects of redlining and other discriminatory practices.
Dallas can only reach its full potential when everyone shares in the wealth generated by our economy. More mortgages south of I-30 would allow wealth to grow and businesses to increase economic development throughout our city. If done correctly, the Responsible Banking Ordinance could ease the tax burden on our city residents and improve our daily lives, regardless of our skin color or which side of I-30 we live. It is a step in the right direction.
Jaime Resendez is a Dallas City Council member representing District 5. He wrote this column for The Dallas Morning News
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