Urban disinvestment revisited: Subprime mortgage lending and slum housing in the city of Los Angeles

The plight of central cities in the U.S. has been an area of great concern for urban policy makers and community activists over the past several decades. Amidst stark demographic and economic restructuring in urban areas during the 1960s and 1970s---especially in Eastern, "rust-belt" cities---researchers identified processes of urban disinvestment, which produced negative consequences for residents of many central city neighborhoods. One group of researchers focused on disinvestment on the part of financial institutions, while others investigated disinvestment in the urban rental housing stock by property owners seeking to maximize economic return.;In general, these two streams of urban disinvestment have been analyzed separately, and there has been relatively little investigation of these processes after the 1980s or in cities that were not part of the industrial "rust-belt." To fill this gap, I revisit both of these strands of urban disinvestment in a relatively understudied context, the City of Los Angeles. Specifically, I seek to answer two research questions: (1) what is the relationship between subprime refinance mortgage lending and neighborhood characteristics? and (2) what factors lead to deterioration in multifamily housing conditions? Analyzing extensive data on mortgage lending and property conditions in Los Angeles, I uncover processes of urban disinvestment in the city during the past decade.;As in many parts of the country, Los Angeles experienced a rapid growth in subprime---i.e. high-cost---mortgage lending during the 1990s, and this growth tended to be concentrated among residents of low-income and minority---particularly majority African American---neighborhoods. While conventional "redlining" may not be as common today, subprime lenders seem to have filled the gap left by traditional lenders in these neighborhoods. Along with disinvestment by high-cost mortgage lenders, I find that, although Los Angeles does not fit the stereotype of disinvested "rust-belt" cities, there is a strong relationship between deteriorated housing conditions and tax delinquency. These findings have several implications for how outreach and enforcement programs are targeted and implemented and raise questions for current theories of neighborhood change and urban disinvestment.