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The frustration of trying to invest in my hometown

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Re: The frustration of trying to invest in my hometown

#111

Post by treis »

yardie wrote: post #107
throwaway0a5e wrote: post #35

Earlier quoted context omitted.

It's not racism unless you subscribe to highly inclusive definitions of racism. It's just that government is mostly made up of people who are upper middle class or higher and government reflects their values so development they consider "nice" is facilitated and regulatory roadblocks are added to development they are suspect of. If you told HN that some random dude buying a bunch of dilapidated buildings and make the…

> government is mostly made up of people who are upper middle class or higher Go to your city hall or their website and see if they have an organizational chart. For some of us one thing will overwhelmingly stick out. For others it's just business as usual. > the municipality got rich on a boom of local industry 0-70yr ago and could afford to drive them out This did not happen. Local industry collapsed and ushered in…

>Go to your city hall or their website and see if they have an organizational chart. For some of us one thing will overwhelmingly stick out. For others it's just business as usual.

I assume you mean that they're all white. Which isn't true at all. Birmingham, as an example, has had black mayors for 40+ years now. Most of the cities in the south are like that. Whites fled to the surrounding suburbs leaving political power to the Blacks that remained.

Re: The frustration of trying to invest in my hometown

#112

Post by Apocryphon »

macspoofing wrote: post #37

I hate these kinds of articles. There are thousands of reasons why this gentleman was denied a loan for redevelopment of these properties, and it is just taken as a truism that it must be racism. The article doesn't even attempt to justify this view, and simply expects the reader to take it at face-value. This is serious stuff. If there is institutional racism, then we need to stamp it out. You cannot be frivolous wi…

> debt is the fastest way for a new business to go underwater. Starting a business is hard enough, and when you have debt hanging over you, it makes it so much harder to survive because business is cyclic - you have bad quarters and good quarters, and debt will inflate a bad quarter and put a damper on the good quarters.

Meanwhile in startups:

https://www.lightercapital.com/blog/startups-turn-to-non-dil...

Re: The frustration of trying to invest in my hometown

#113

Post by joshspankit »

tomcam wrote: post #102
raziel2p wrote: post #69

Earlier quoted context omitted.

How are you able to tell the state of the buildings in such details from the article alone? Unless I'm missing something, Rice pretty much addresses your comment in the article: "It's one thing to do this with one building," he says, "if it is small and falling apart. It's another thing to do it with eight buildings with sitting tenants."

You’re right, I can’t be certain, other than being reasonably familiar with this business. That’s a lot of real estate. He doesn’t specify how many are paying. If he had enough tenants to move the needle and the buildings were up to code he would have little trouble getting a loan. I’m also willing to bet some serious money that either the buildings aren’t properly permitted for tenants, or that the previous owners w…

> ... he would have little trouble getting a loan.

Here’s the crux.

If you’re willing to argue that he should have little trouble, then excellent: we’ve got a barometer for whether discrimination is a factor.

Re: The frustration of trying to invest in my hometown

#114

Post by luckylion »

kiplkipl wrote: post #101
luckylion wrote: post #99

Earlier quoted context omitted.

"Banks are racist" is my very short summary of the supposed situation. The problem I have with such explanations is the same I have with "women get 20-30% less money for the absolute same work". Since labor is the major cost factor in most industries, any company exploiting that arbitrage would stomp their competitors. Why wouldn't anyone want to get rich off of lending to minorities? Pecunia non olet, I'm sure even…

A) They are doing it B) Markets aren't perfect C) You have to fight against, or change the influence of (through, say, commentary in the media), the government's funding and regulation. >Are the shareholders mostly white? It's my understanding that most large investors are pension funds, insurance companies and the like, not individuals. Who owns and benefits from the funds?

If "they" are doing it, where's the issue? Markets may not be perfect, but they're not that bad, especially when huge profits are waiting to be collected with little risk.

> Who owns and benefits from the funds?

Everybody that gets any kind of pension or has any kind of insurance. Is your point that the majority of those may be white and therefore they should've let them crash?

Re: The frustration of trying to invest in my hometown

#115

Post by johnyzee »

ShamelessC wrote: post #104
johnyzee wrote: post #74

> Financial reparations to African American communities are key, argues Prof Baradaran This seems obvious and fair. Blacks have never been given a fair chance in America. > In 1863, when President Lincoln signed the Emancipation Proclamation, black Americans owned less than 1% of US total wealth. Nearly 160 years later, this number has barely budged. Just setting slaves free did not, in any way, put them on equal foo…

You might be right about the "most" qualifier (although I hope you're not) but have you been paying attention to the protests and media/editorial coverage of the black lives matter movement? It seems many white people are finally starting to grasp the idea that black people have always been severely disadvantaged in this country. A good example is the popularity of the "white fragility" concept and a broader effort t…

I partly base the 'most' part on seeing how widespread the idea is here on HN, which I generally consider to consist of reasonable, and mostly liberal leaning, white people.

Honestly, though the BLM movement is a nice gesture, it seems mostly prompted by the string of high-profile police brutality cases, and limited to that. I haven't seen a real agenda of change beyond that, like, for example, the suggestion of reparations, or other significant economic initiatives.

Re: The frustration of trying to invest in my hometown

#116

Post by reportgunner »

kiplkipl wrote: post #94
reportgunner wrote: post #62

Earlier quoted context omitted.

Well why don't black landowners simply not go bankrupt and change the statistic over the years ? Why don't black landowners support each other to make it easier for them to get a fiscal injection when needed ? > He had enough cash to buy eight buildings, all around 100 years old, in his majority black neighbourhood of Ensley, but he needed a banking loan to redevelop them. He thought it would be just a formality. Why…

Meanwhile the buyer in the white-majority area continues to buy 8, enjoys a higher leverage for the same interest, and makes a higher profit. And so it repeats. Leverage is forgiven when the faceless metaphorical person does it but, when it's given a black face, suddenly the black community as a whole has to answer to you? Why didn't GM simply not go bankrupt?

What interest are you talking about? The article said he had money to pay for 8 buildings in cash and he wanted to loan to renovate them.

I suggested that if you can't get a loan you should tune down your ambitions a bit. There are many white people who can't get a loan too, tune it down with the racist us vs them thinking. It's not like all white people gain from that one person getting more leverage.

I was talking about doing this to remove the statistics that cause the apparent racism, while you want to keep perpetuating the same mentality. Wake up or keep wondering why you are still losing.

Re: The frustration of trying to invest in my hometown

#117

Post by ethagknight »

greenie_beans wrote: post #95
ethagknight wrote: post #55

I recently led an $80mm mixed use investment in a 10 derelict properties in an offbeat part of Memphis next to a few large government housing projects. Some takeaways reading the article. Banks are not the problem; banks are just doing their jobs by trying to make securable loans. Appraisals aren’t the problem; appraisers are hired and paid to be non-creative and non-biased they assign a value to property. If a group…

What is considered "proximity" for jobs? Would that be considered jobs in the neighborhood or adjacent neighborhods? It's not terribly far from downtown Bham.

Thats an open question, but for us it is within a long walk or a short bike ride to a lot of high quality jobs. For Ensley, you are most likely hopping on the interstate to get to work. Once you have to get on the interstate, why not keep going another few miles to a stronger economy? Or even better, why not just invest closer to the jobs? For a Bham specific example, there are probably very low cost properties closer to UAB or Regions.

To make the case that someone SHOULD invest in Ensley, the investor has to make that case defensively for why Ensley instead of 3 miles east closer to downtown.

The biggest issue for Ensley, not mentioned in the article, is that Ensley was built as an industrial village for Tennessee Coal and Iron (TCI) with an absolutely mammoth manufacturing facility alongside Ensley (largest in the world, per wiki). TCI was acquired by US Steel and US Steel relocated and expanded the plant to Fairfield. Now that the jobs are gone, Ensley has struggled to survive. I would imagine the completion of I-20 was the final straw, since it is now easier to access cheaper land further out. It is unfortunate, but not unreasonable.

Re: The frustration of trying to invest in my hometown

#118

Post by ethagknight »

aliante wrote: post #56
etchalon wrote: post #45

Reading these threads, it’s always frustrating to see people insist that it can’t be because of race. “There must be a logical, mathematical reason for this!” As a graduate of the Goldman Sachs 10KSB program, one of the most shocking things I found amongst my cohort was how many of the black small business owners were struggling with credit and financing. It didn’t make any sense when we discussed their business. Oft…

Check out the area where he wants the bank to “invest.” 608 19th street Ensley. Look on Google Streetview and Google Earth. Roofs have collapsed. Half the windows around there are smashed. A few large holes in walls. What would you value buildings in that area at?

Researching deeper, I found Ensley was originally built as an industrial town for a massive US Steel plant. that plant is now gone. If the jobs are gone, its a tough proposition to invest in the neighborhood.

Re: The frustration of trying to invest in my hometown

#119

Post by tomcam »

wegs wrote: post #103
tomcam wrote: post #44

Sadly, these buildings just aren’t good investments, and he’s not a good investor. Buildings that old are subject to all kinds of safety regulations, and Birmingham is not an easy town to work through that kind of thing. No one in the city is going to stick their neck out to cut through decades of regulations only to lose their job when there’s a fire or collapse. Any new owner will be tied up in red tape and rehab r…

Racism has nothing and everything to do with it. The word 'racism' has several very different meanings, depending on which dialect of English you speak. * In my hometown, racism would have nothing to do with it. The math doesn't work out for the investment, he was denied, case closed. * In my current town, racism has everything to do with it. We've set up structural barriers to success, which correlate strongly with…

Nothing stopping you from such investments.

I put my money where my mouth is.

Re: The frustration of trying to invest in my hometown

#120

Post by tomcam »

joshspankit wrote: post #113
tomcam wrote: post #102

Earlier quoted context omitted.

You’re right, I can’t be certain, other than being reasonably familiar with this business. That’s a lot of real estate. He doesn’t specify how many are paying. If he had enough tenants to move the needle and the buildings were up to code he would have little trouble getting a loan. I’m also willing to bet some serious money that either the buildings aren’t properly permitted for tenants, or that the previous owners w…

> ... he would have little trouble getting a loan. Here’s the crux. If you’re willing to argue that he should have little trouble, then excellent: we’ve got a barometer for whether discrimination is a factor.

Sorry, I’m not following?
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