Title:
The impact of high-leverage home loans on racial/ethnic segregation among homebuyers in the mortgage boom

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dc.contributor.advisor Immergluck, Daniel W.
dc.contributor.author Lee, Yun Sang en_US
dc.contributor.committeeMember Clark, Jennifer
dc.contributor.committeeMember Dawkins, Casey
dc.contributor.committeeMember Drummond, William
dc.contributor.committeeMember Stiftel, Bruce
dc.contributor.department City Planning en_US
dc.date.accessioned 2013-06-15T02:52:16Z
dc.date.available 2013-06-15T02:52:16Z
dc.date.issued 2013-04-09 en_US
dc.description.abstract Residential racial segregation has been perennially viewed as a major urban problem in the United States. Meanwhile, the single-family mortgage market has been an influential factor in determining segregation since at least the 1930s. Although many prior studies rightly have focused on the very real individual and social costs of subprime loans and related loan features, the greater leverage they afford also may have allowed some, especially minority, homebuyers to purchase properties they otherwise would not have been able to afford. Limited loan-to-value and payment-to-income ratio requirements have constrained borrowers from prime, conventional lenders, and relaxing these standards might allow some borrowers to purchase more expensive homes, possibly in higher quality neighborhoods. Additionally, if minority borrowers disproportionately obtained high-leverage loans, the effect of these loans on neighborhood choice may be greater for minorities than non-Hispanic whites. Since higher-quality neighborhoods are disproportionately non-Hispanic white or racially diverse, the increase in high-leverage mortgages might mitigate the neighborhood quality gap between minorities and non-Hispanic whites and reduce levels of racial/ethnic segregation. Accordingly, this dissertation focuses on two research questions: 1) whether high-leverage home purchase loans enabled borrowers to purchase more expensive homes and homes in higher-quality neighborhoods; and 2) whether these loans affected the racial/ethnic segregation of homebuyers at the metropolitan level. Since blacks and Hispanics comprise significant minorities in many metropolitan areas in the 2000s, I examine the questions for three racial/ethnic groups: non-Hispanics whites, blacks, and Hispanics. To answer the first question, household housing demand and neighborhood quality models are estimated using the American Housing Survey data. To answer the second question, metropolitan area segregation models are estimated primarily using the American Community Survey and the Home Mortgage Disclosure Act. Both cross-sectional and fixed-effect panel segregation models are estimated using a two-stage least squares approach with chosen instruments. I find that the use of high-leverage loans increases housing demand and neighborhood quality, holding other household characteristics constant. I also find that high-leverage loans have a substantial, negative effect on black segregation, while the effect on Hispanic segregation is somewhat ambiguous. The findings suggest that policymakers should consider the impact of regulations affecting allowable loan-to-value and payment-to-income ratios on borrowers' residential choice and urban form, as well as on default risk. en_US
dc.description.degree PhD en_US
dc.identifier.uri http://hdl.handle.net/1853/47672
dc.publisher Georgia Institute of Technology en_US
dc.subject Racial segregation en_US
dc.subject City planning en_US
dc.subject Home mortgage en_US
dc.subject.lcsh Discrimination in housing
dc.subject.lcsh Discrimination in housing United States
dc.subject.lcsh Zoning, Exclusionary
dc.subject.lcsh Minorities Housing
dc.subject.lcsh Mortgage loans
dc.title The impact of high-leverage home loans on racial/ethnic segregation among homebuyers in the mortgage boom en_US
dc.type Text
dc.type.genre Dissertation
dspace.entity.type Publication
local.contributor.corporatename College of Design
local.contributor.corporatename School of City and Regional Planning
local.relation.ispartofseries Doctor of Philosophy with a Major in City and Regional Planning
relation.isOrgUnitOfPublication c997b6a0-7e87-4a6f-b6fc-932d776ba8d0
relation.isOrgUnitOfPublication 2757446f-5a41-41df-a4ef-166288786ed3
relation.isSeriesOfPublication df7b7c2d-cd1c-48cf-ac1b-e69f299f9774
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