The Influence of the Home Owners' Loan Corporation on Housing Markets During the 1930s

Fishback, Price V.; Flores‐Lagunes, Alfonso; Horrace, William C.; Kantor, Shawn; Treber, Jaret

doi:10.1093/rfs/hhq144

Cited by 36 publications

(7 citation statements)

References 30 publications

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“…2 Harriss (1951) is an early and invaluable study on the HOLC. Recent studies include Courtemanche andSnowden (2011), Fishback, Kantor, Flores-Lagunes, Horrace, andTreber (2011), Rose (2011), andFishback, Rose, andSnowden (Forthcoming 2013 Table 1 also compares both farm programs to the HOLC, the sister relief program in the nonfarm field. The terms of the farm loans were slightly more generous in some dimensions, made possible by significant cash subsidies and capital investments to the FLBs from the Treasury that were not paralleled in the HOLC.…”

Section: Discussionmentioning

confidence: 99%

A Primer on Farm Mortgage Debt Relief Programs During the 1930s

Rose

2013

SSRN Journal

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Section: Discussionmentioning

confidence: 99%

A Primer on Farm Mortgage Debt Relief Programs During the 1930s

Rose

2013

SSRN Journal

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“…Tracts in the treatment group could actually have portions that are in control areas (and vice versa). 29 Because I do not observe lending behavior, I cannot determine the extent to which discriminatory practices spilled over into yellow-lined areas. The border tract analysis may be more sensitive to positive or negative spillover effects compared to using a wider geographic bandwidth.…”

Section: Estimation Strategymentioning

confidence: 99%

Persistence of Prejudice: Estimating the Long Term Effects of Redlining

Krimmel¹

2018

Preprint

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As part of a New Deal initiative to minimize home foreclosure, federal government officials and local real estate professionals graded each neighborhood in America's largest cities on its perceived credit risk. Using recently digitized maps that precisely show neighborhoods marked with red ink (highest risk) or yellow ink (slightly lower risk), I document that surveyors disproportionately assigned the most restrictive credit rating to neighborhoods with black residents. Nearly 90 percent of African Americans in 1940 lived in a census tract marked for credit redlining. Comparing credit-restricted "redlined" census tracts to adjacent "yellow-lined" tracts, I estimate the long-run effects of redlining on housing and neighborhood outcomes. Between 1940 and 1970, redlining was associated with large differential declines in housing supply and population density; homeownership rates and racial composition did not change differentially from their 1940 baseline though. Once discriminatory lending was outlawed during the mid-1970s, there was moderate convergence in homeownership rates and racial composition. However, housing supply and population density remain persistently lower in formerly credit-restricted census tracts relative to their credit-favored neighbors.

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“…Wheelock (2008), White (2010), Courtemanche and Snowden (2010), Fishback, Lagunes, Horrace, Kantor, and Treber (2011), and Rose (2011 provide background on this. In general, the "double trigger" theory of borrower default emphasizes the importance of negative income shocks combined with lower property prices.…”

Section: The Depression Foreclosure Crisismentioning

confidence: 99%

The Prolonged Resolution of Troubled Real Estate Lenders during the 1930s

Rose¹

2014

Housing and Mortgage Markets in Historical Perspective

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This paper studies how building and loan associations (B&Ls) slowly unwound their obligations following a set of financial shocks during the Great Depression, with a special focus on a group of particularly troubled B&Ls in Newark, NJ. Investors in B&Ls disagreed over whether to realize losses on foreclosed real estate holdings, and those investors favoring liquidation were unable to force action after legal developments nullified statutory withdrawal privileges. In the medium run, a market-based resolution mechanism developed in the form of a secondary market for B&L liabilities. Liability holders barred from withdrawal incurred large losses while liquidating their investments on this market. At the same time, B&Ls used the market to avoid realizing some losses by exchanging foreclosed real estate for their second-hand share liabilities. More formal resolution ultimately took place from 1938 to 1943, first consisting heavily of closures, and then of reorganizations. Reorganizations were spurred by a large scale federal intervention arranging for the creation of bad banks, liquidity injections, and liability insurance.

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The Influence of the Home Owners' Loan Corporation on Housing Markets During the 1930s

Cited by 36 publications

References 30 publications

A Primer on Farm Mortgage Debt Relief Programs During the 1930s

A Primer on Farm Mortgage Debt Relief Programs During the 1930s

Persistence of Prejudice: Estimating the Long Term Effects of Redlining

The Prolonged Resolution of Troubled Real Estate Lenders during the 1930s

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