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» VISIT US ONLINE @ DSNEWS.COM 15 HOME AFFORDABILITY GAP INCREASES AMONG MINORITIES Since 2012, homebuyers earning median salaries in the 30 largest metros in the United States have found themselves increasingly priced out of their markets. But the affordability gap for middle class households has been especially rough on Hispanic and African-American buyers, according to a new study by Redfin. Redfin's report states that in 2016, Hispanic families could afford 18 percent of homes for sale in the 30 largest U.S. metros, while African- American families could afford 14 percent. Both rates were down 11 percentage points from 2012. Meanwhile, while middle class white families saw a 12 percent affordability drop over the same time period, white households earning median incomes could afford 30 percent of the houses in those same markets last year, Redfin reported. Independent of ethnicity, housing affordability for middle class families overall dropped 12 percent between 2012 and 2016. According to Redfin, national incomes have risen 2 percent since 2012, but national housing prices rose far more, jumping 26 percent. Nearly half the houses for sale in the 30 largest metros were affordable to median earners in 2012; less than a third were affordable to them last year. Affordability issues for Hispanic and African-American buyers has been particularly pronounced in the West, Redfin reported. In fact, these buyers have been all but priced out of the market in Denver, Los Angeles, Portland, San Francisco, San Diego, and Phoenix, where fewer than 5 percent of homes for sale were affordable to Hispanic and African-American buyers last year. While Denver had the smallest number of homes available to minority buyers last year (2 percent), the city was also home to the smallest racial gap in housing affordability—middle class whites could afford 8.3 percent of homes. On the other side of that coin was Minneapolis, where 66 percent of median- earning whites could afford homes, while Hispanic families could afford about 25 percent and African-American families could afford just over 5 percent. Las Vegas had the largest declines in affordability for families making the median income; African-American buyers saw affordability drop -26.5 points and Hispanic buyers saw a decline of 24.6 points from 2012 to 2016. Meanwhile, metros known for their relative affordability, like Atlanta, Tampa, and Kansas City, saw double-digit declines in the share of listings that were affordable on African- American and Hispanic median incomes, Redfin reported. St. Louis was the only metro that saw increases in affordability for both Hispanic (up 5.4 points) and African-American families (up 4.3 points). St. Louis was also the only metro where overall middle class affordability, including for median income white households, did not change significantly over this period. "American cities are at risk of losing both the economic and racial diversity that has been their hallmark," said Redfin Chief Economist Nela Richardson. "Middle class homebuyers are being priced out of America's largest cities at an alarming rate, as the home affordability gap gets wider. Given the significantly lower rates of homeownership among African-American and Hispanic families, the reduction in affordable listings has even more dire consequences for income inequality when broken out by race." But, Richardson added, there are solutions. "For one, federal and state governments can do much more to be influential in local housing policy," she said. "at's where the crisis starts—at the neighborhood level— when people vote against inclusionary zoning policies, making it difficult or impossible to build higher-density, affordable housing in a community. Federal and state governments can reward communities that change to inclusionary zoning practices by offering them infrastructure investments to improve the neighborhoods. at way, inclusionary zoning is more appealing to longtime residents." FINTECH CHARTERS MAY HAVE BUMPY ROAD AHEAD New leadership at the Office of the Comptroller of the Currency and various state regulators is just one of the hurdles that could stall the OCC's initiative to grant FinTech companies national bank charters, according to the ForeSight report recently released by Mercator Advisory Group. Last year, the OCC announced its intent to allow FinTechs to apply for special-purpose national bank charters, and in March, after reviewing public commentary, the office published a draft of its guide for evaluating such applications. According to the ForeSight report, the landscape has changed since the OCC's first move on this initiative, and it could stall—or even halt altogether—its progress. For one, according to Steve Murphy, Director of Mercator's Commercial and Enterprise Payments Advisory Service, FinTechs may not even have interest in the oversight and regulations that traditional banks experience. Changes in leadership at the OCC could pose an obstacle as well. President Trump named attorney Keith A. Noreika to replace omas J. Curry as head of the Office of the Comptroller of the Currency in early May. Curry had served in the post for five years and introduced the initiative back in December. "e OCC made a bold move in seeming recognition that financial services is rapidly changing, assuming that FinTechs may wish to be regulated like any other national bank," Murphy said. "e initiative was championed by then-Comptroller omas J. Curry, however, who left office in early May, and his permanent replacement may have a different view." Various state regulators could also impact the initiative as well, as many have entered litigation with the OCC, claiming it's an overstep of federal power. "State regulators have been primary objectors to the OCC's move, and in April filed a lawsuit that challenges the federal regulator's authority to implement this particular form of national bank charter," Murphy said. Mercator's ForeSight report also delves into the overall implications of the FinTech charter initiative, both on the U.S. regulatory structure and the bank-chartering process.

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