The frustration of trying to invest in my hometown

> Banks don't use race as criteria for loans, just as auto insurance companies don't use race as criteria for setting rates.

If this article is correct, then this claim is wrong. Banks may not directly use race as a criteria, but the claim is that they use race as a criteria for property value, and then use property value as a criteria for loans:

> Five of his properties were in a decent state of repair and some had sitting tenants, while three needed a complete refurbishment. ...One bank finally sent someone on location to assess his properties 12 weeks later. They valued the buildings at zero dollars and just over a dollar per square foot for the land only. As the rules for most banks say a property must be valued at a minimum of $50,000 (£39,000) to get a line of credit against it, his case was shut.

Counting a building with active tenants paying rent as being valued at $0 is ridiculous.

> Counting a building with active tenants paying rent as being valued at $0 is ridiculous.

Depends on how much rent they are paying, what other large costs repair costs might exist for the building, and whether anyone is buying in that neighbourhood.

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 them into apartments and commercial real estate people would basically assume you're dealing with a slum lord. These are the kinds of assumptions that government codifies. They don't care that you're black or brown or white. You're just a name on a form to them. What they care about is that your proposed development meets X, Y and Z which triggers scrutiny A B and C (which was all originally passed to curtail slum lords back when the municipality got rich on a boom of local industry 0-70yr ago and could afford to drive them out).

And of course the bank knows all this and they figure that into their calculations when they're deciding whether or not to lend to you and what interest rate you'll get.

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 with these accusations. And the problem with this case, there's nothing you can do. You can't even inundate the bank with calls to stop their racism, because they didn't even bother doing any investigative reporting to see if the bank is following some sort of stated or unstated racist policy - so you have no facts to stand on. The article doesn't say it, but it is clear as day that there is a lot of risk in redevelopment of these properties. For one thing, nobody has done it yet. There is a reason why these properties are abandoned and nobody took a flyer on their redevelopment. Maybe it is oversight by existing real estate developers, but maybe they know something you don't. Locally, there is a building, in a prime location, that has stood abandoned for years - turns out though the building and land is cheaper, redevelopment would mean doing an environmental cleanup that was ostensibly cost-prohibitive. The city didn't even want to reposes it even though they could (the property owned lots of bank taxes).

It's irresponsible journalism to do this.

>Properties in black areas are priced 23% lower than in white areas, says Andre Perry

As always, whenever a line like this is presented, the reader is invited to assume that the reason for that is racism. Is that true though? I have no doubt that this fact is true as stated, but no effort has been done to explain 'why' this fact is. It could be the case that banks are racist (and even in that case, there are multitude of modalities for racism so you still need to do the legwork), but it could be a thousand other reasons. And it is important to know.

>They compared my eight historic properties to farmland 14 or so miles away, and they compared my buildings to an abandoned car wash.

I mean, yes, I believe it. Banks are weird like this. They are banks. They don't understand the nuances of the business you're in. My farmer friend got denied a loan (and even used farm collateral) for replacement of a machine to aide in drainage tiling because it wasn't deemed a farm-centric operation by the Farm Credit bank (or something like that). To be fair, he did use the tile machine to contract out the service as a side-gig but that's a distinction without meaning. Farmers always have side-hussles that fund farm operations.

>JP Morgan Chase, the largest bank in the US, launched its Advancing Black Pathways programme just over a year ago.

I don't know anything about the program, but if it is debt-based (as opposed to investment for equity), then I have mixed feelings, because 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.

Well this is why we need more Dumb Bankers. It would work out better than bailing out the mindlessly ambitious pseudosmart ones every 2 years. Nature has provided us a surplus. We must use it.