Milano’s Alex Schwartz Publishes Underwater America Report
Despite rising home prices in many parts of the country, approximately 9.8 million households are “underwater”— that is, households “owe more on their mortgages that their homes are worth,” says a new report published by the Haas Institute. In Underwater America, urban policy, planning, and community development experts including Milano School of International Affairs, Management, and Urban Policy professor, Alex Schwartz, found that an estimated 28.7 million Americans (nearly 1 in 10) live in the 100 hardest-hit cities where a significant number of families are considered underwater. Schwartz, no stranger to housing policy, has lectured across the U.S. and abroad, and is often tapped to comment on the housing crisis in various news and media outlets.
“The federal government has not addressed the problem as effectively as it could have,” says Schwartz. “This is especially true of Fannie Mae and Freddie Mac, who have been prohibited by their federal regulator from reducing the mortgage principal for underwater homeowners.”
The first report of its kind, Underwater America also provides evidence for “the legacy of predatory lending” that has disproportionately affected African American and Latino communities. According to the report, African Americans and Latinos comprise 40 percent of the population in 71 of the 100 hardest-hit cities. “Many of these places were targeted by subprime lenders during the boom years of the housing bubble and they are still suffering the consequences,” explains Schwartz.
Underwater America states that the housing crisis if far from over for the millions of households living underwater.
When asked if the crisis will be over in the foreseeable future, “who knows,” Schwartz responds. “The crisis cannot be resolved when as many as 20% of all homeowners are under water, with much higher percentages of underwater households in many parts of the country.”
Read more about the report in a New York Times op-ed piece by Schwartz’s co-author, Peter Dreier. To learn more about Alex Schwartz’s work, visit his faculty bio page here.