Native Hawaiians, Pacific Islanders and the Uneven Housing Market Recovery

Authors: Elora Raymond*, Clemson University
Topics: Pacific Islands, Urban and Regional Planning, Economic Geography
Keywords: Native Hawaiians and Pacific Islanders, Mortgages, Inequality, Housing
Session Type: Paper
Day: 4/11/2018
Start / End Time: 8:00 AM / 9:40 AM
Room: Riverview I, Marriott, River Tower Elevators, 41st Floor
Presentation File: No File Uploaded

In the emerging financial system of market-based credit, dealers provide core infrastructure by creating prices and liquid markets. These functions are not easily regulated or backstopped. Instead of capital controls and safety and soundness regulation, the Fed has averted crisis and steered markets by acting as a dealer itself. Quantitative Easing (QE) is an emblematic example of this shift. During QEI, the Fed purchased $1.25T in residential mortgage backed securities. QE lowered mortgage payments, boosted local demand and contributed to housing market recovery. As such, QE was a housing policy which in dollar terms was far larger than other Obama-era recovery policies.

The housing market recovery from the 2007-2009 recession was marked by rising housing wealth inequality between racial and ethnic groups in ways that cannot be fully explained by the subprime and foreclosure crises. While the drivers of inequality leading up to the crisis have been studied, less research has focused on how policy during the recovery period exacerbated inequality.

What are the consequences for equity of the new financial system, and of emblematic housing and financial policies like QE? I examine the impact of the 2008-2009 QE I refinance boom on Native Hawaiians and Pacific Islanders in Los Angeles and Honolulu. I examine whether these groups were less likely to take advantage of lower rates, and the spatial distribution of the refinance boom following quantitative easing. Based on pilot studies, I expect to find that QE I exacerbated spatial inequality and contributed to the uneven housing market recovery.

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