Worcester Business Journal

wbjournal.com | May 24, 2021 | Worcester Business Journal 11 e difficulty would-be homeowners have in obtaining mortgages for homes in the poorest and most racially diverse Central Mass. neighborhoods stifles attempts at revitalization Economic suppression Rich dreams, poor dreams Racial discrimination in mortgage lending and home ownership – a key aspect in building wealth in America – creates neighborhoods of have's and have-not's in Greater Worcester, where educational success and economic development are harder to achieve. Part 2 of this joint five-month investigation between Worcester Business Journal and the Worcester Regional Research Bureau explores how this discrmination destabilizes the region's poorest neighborhoods and creates obstacles to economic improvement, particularly in a way to include existing residents. Read the entire WRRB report on www.wrrb.org. WBJ and WRRB have put out this joint digital edition for all this research and are conducting a webinar event exploring potential solutions to these problems. For details on the webinar in the coming weeks, visit WBJournal.com. D owntown Fitchburg has struggled to attract new growth when so many people are following jobs to more prosperous areas or finding affordable areas elsewhere. It only compounds the problem when residents looking to buy a home down- town are the least likely to be able to be approved for a mortgage of any neigh- borhood in Worcester County. at find- ing, part of a joint five-month investiga- tion by the Worcester Business Journal and Worcester Regional Research Bureau into racial discrimination in mortgage lending in Central Massachusetts, high- lights how persistent problems can be in improving some of the region's most racially diverse and worst-off neighbor- hoods economically. "Getting more homeowners into a neighborhood that might have some challenges can be stabilizing. People feel invested in the neighborhood, not just their home," said Liz Murphy, Fitchburg's director of housing and development. "Homeowners can see the whole neighborhood as part of their home," Murphy said. "ey're buying more than just a house." Downtown Fitchburg, the poorest Census tract in Worcester County, isn't alone in having difficulty not only attracting residents but in particular those looking to buy there, to literally be invested in the neighborhood. In Worcester, three of the poorest neighborhoods – downtown, the Canal District and Vernon Hill – also struggled with some of the worst mortgage approval rates in Central Mass. ough the sample size was small, measuring just 2019, the only recently available year, the data illustrates the difficult task in front of city and state officials and their community partners. Many of the same people who are looking to buy in such neighbor- hoods may have the least amount of money to put into a down payment, or a troubled credit history making them less attractive to lenders. BY GRANT WELKER Special to the Worcester Business Journal What each of those neighborhoods have in common, aside from economic troubles, are their difficulty in getting people who want to buy a home in those neighborhoods approved for a mortgage. At least 17% of prospective homeowners were unable to get a mortgage in 2019, and in downtown Fitch- burg that rate was 26%. ese poorer neighbor- hoods are some of the most racially diverse in Central Mass. In Worcester, for ex- ample, the top 10 U.S. Census tracts by income have 90% white homeowner populations, while the bottom 10 are 65% white. City of Fitchburg officials and their partners see a need for more homeown- ers and are working to use government tools to help the process. "People need to be invested in the neighborhood," said Marc Dohan, the executive director of NewVue Com- munities, a Fitchburg nonprofit aiding prospective homebuyers. "at's key. A renter can be invested. A homeowner can be invested," Dohan said. "You need a good mix." Partnerships and public aid Cities have help available from state and federal agencies to aid residents looking to buy homes. e state agency MassHousing helps with down payment assistance, much of it for lower-income households and to Gateway Cities, diverse and economically challenged communities, such as Fitch- burg and Worcester. In the past five years, MassHousing says it has financed $3.4 billion in mort- gage activity statewide, with 43% of that taking place in Gateway Cities. Worces- ter, easily the biggest Gateway City by population, has received the most funding at nearly $166 million. Another nearly $46 million went to Fitchburg. "e effects of homeownership on a neighborhood are tremendous because you're building roots," said Mounzer Aylouche, the vice president of home- ownership programs for MassHousing. "You become a major contributor to the micro-economy of that community." Continued on Page 12 Mounzer Aylouche, vice president at MassHousing Liz Murphy, director of housing and development for the City of Fitchburg, stands in front of City Hall, the renovation of which is a key part of the plan to revitalizing the city's low-income Main Street neighborhood. PHOTO/EDD COTE

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