Mapping Foreclosure: By Waves, By Dots

From a distance, the Boston housing market looks more like a wave, or one of many troughs in a receding tide. Some parts of the city are further down than others, just as some tidemarks around the country stretch farther out to sea. Up close, the steps backward or forward are small, like the fitful trudge of horseshoe crabs.

At a meeting of Mayor Menino’s Foreclosure Intervention Team Wednesday morning, there were some steps forward to report from an especially beleaguered area around Hendry Street in Dorchester. A tenant facing eviction from a house recently in mortgage trouble was about to sign a one-year lease. The city was offering to buy five three-decker condos that were taken by foreclosure. There was an offer to buy a three-decker beset with mortgage trouble and a legal dispute. And the city was in discussions with the US Dept. of Housing & Urban Development over a vacant property around the corner on Coleman Street. Buyers had agreements to buy two other houses on Hendry Street and Clarkson Street. And one more three-decker on Hendry Street would soon be up for auction.

The Hendry Street area was also getting attention from the police, as well as outreach to property owners and tenants. And, to help break the deadlock on foreclosed housing throughout Boston, the Mayor’s administration had also filed a home rule petition to impose a surtax of 10%.

The rest was putting the numbers in perspective.

“We’re not as bad as ’93 and ’94, but we never want to get there,” said the mayor. “And all the predictions we get are the worst is yet to come.”

Officials say one sign that more trouble is on the way is that only 30% of the adjustable-rate mortgages they’re concerned about have jumped to a higher interest rate.

“Nine hundred eighty-two loans have already reset,” said mayoral advisor Pat Canavan. “We’re anticipating in the next few months, through April of ’08, 750. So, we’re not at the peak of this issue yet.”

Also growing is the percentage of properties for which banks fail to find a new buyer. That means the party holding the mortgage takes title, dotting the city’s map (above) with one more “Real Estate Owned Property” or “REO.” According to the Dept. of Neighborhood Development (DND), in 2005, 48% of the foreclosures in Boston ended up as REOs. In 2006, it was 81%. Last year, the figure was 93%. Currently, the city has 565 REO properties.

DND figures put the number of foreclosure petitions on Residential property in Boston at 2432, which is up from the 2006 total by 75%. There were 703 foreclosure deeds, which is up from the 2006 figure by 169%. According to DND’s Deputy Director, William Cotter, the totals are evenly split between property owned by occupants and investors.

Cotter says 76% of the foreclosed properties are in four parts of Boston: Dorchester, Roxbury, Mattapan and Hyde Park. In parts of those areas with concentrations of subprime lending and foreclosures, he explained, property values fell last year by 10-15%.

“There are other neighborhoods in our city that are not affected in any way,” he added, “but this value is directly related to the problem.”

City officials say their prevention programs reduced the number of potential foreclosures by 30%.

“This effort today,” said Cotter, “and the effort of the mayor is to stay ahead of those things—stay ahead of the REO properties and the abandoned and vacant property, so that we can minimize the overall impact. If we can do that, the decline may not be as low, and we can help the market recover more quickly.”

As in years of decline during the early 1990’s, early 1980’s and much of the 1970’s, a small amount of time could make the difference between a house fit to market and a house damaged by vandals or plundered for materials such as copper pipes.

Even if worse things have yet to strike the Boston housing market, it’s still possible to go from foreclosure sale to profitable investment in a single day, even when a property’s losing value. Records show that’s what happened January 31 with a three-decker on Armandine Street in Dorchester. One buyer purchased the three units from three different lenders for a total of $299,000. Then, in what might be called a condo deconversion, the whole house was sold the same day to a pair of buyers for $450,000, with a 10% down payment. The same three units sold in 2006 for a total of $810,000.

Hendry Street Foreclosures: Fluke or Portent?

When it comes to property owners around Hendry St in Dorchester, Leonard Habiyakare, Jr. is an exception. While some have sold out over the past few years, and others succumbed to foreclosure, Habiyakare has been struggling to keep his three-family house, which is at the end of the street. With help from ACORN, he managed to get his mortgage modified, but he still has trouble finding tenants.

“It is very—I have to say—very strange,” he said in a recent interview on Neighborhood Network News, “because you walk down the street, and there’s no neighbors. Actually, I only have two neighbors—like down the street. I have two houses next to me, and the others all have plywood.”

When Mayor Thomas Menino announced a foreclosure intervention plan for Hendry Street last Thursday, things were still going downhill. Officials at the announcement stood in front of four three-deckers in a row that were vacant and boarded up. The house across the street—though still occupied—had a “for sale” sign. And, before the announcement was over, a tenant in Habiyakare’s house, Donia Jefferson, came out to say the company servicing the mortgage wanted her out by Tuesday.

To break the chain of foreclosures on Hendry, Coleman and Clarkson Streets, the city plans to invest in fixing up buildings and take legal action. During most of Menino’s tenure, the city’s housing strategy has mainly been to use a modest public investment for leveraging more units in private ownership, preferably with owner occupants. The strategy on Hendry Street is dramatically different: a heavy public investment, with outside ownership likely for what officials can only hope will be the short term. The city’s plan includes taking at least five properties for back taxes.

“This is a special project are for us,” said Menino, “and we’re going to work to make this neighborhood what it was four years ago, where people wanted to live and raise their children.”

But even the best of times on Hendry Street are part of a long, troubled history. The street has been periodically infamous for crime problems, going back at least to the anti-drug campaigns led by Georgette Watson in the mid-1980s. And the rash of foreclosures—at least 12 properties on Hendry, Clarkson, and Coleman Streets counted by city officials—quickly spread through an area dominated by absentee ownership, much of it by a trust for one family.

The family trust sold a home to Habiyakare in April, 2005. By early October, 2006, the trust sold three other properties on Hendry and Clarkson streets to a single owner. Within little more than one year, two of those properties had filings for foreclosure, as would another property purchased from the same trust on Ridgewood Street, Dorchester, in December 2006. A property sold by the trust nearby on Quincy Street would be taken by foreclosure in January of 2007, after yet another change of ownership.

The path to the foreclosure process was also quick at 19 and 21 Hendry Street. Both three-deckers were converted by the same buyers. The units for each building sold on the same day—in March and September 2006—and for the same price: $299,000. They were all on the way to foreclosure by the fall of 2007. And the last owner before the filing for foreclosure on 17 Hendry Street was involved in the conversion of a three-decker on Draper St, Dorchester. That conversion resulted in foreclosure filings on two units.

“You superimpose the housing stuff on top of all the rest of it, and that’s a recipe made for disaster,” said Davida Andelman, a community health organizer for the Bowdoin Street Health Center.

A neighborhood resident for 23 years, Andelman says it was difficult to organize Hendry St residents because fear and intimidation were “outrageous.”

“It really is crying out for owner-occupancy of the houses,” she said. “That would go a long way.”

City officials and people familiar with times of trouble for housing in Dorchester agree it will take more than market forces to fill vacancies around Hendry Street. Just across Hendry St from the four vacant three-deckers in a row is a block with 8 homes, all but two of them vacant. Still at least partially occupied is the two-family house at 27-29 Hendry St. A lender filed for foreclosure on the property more than a year ago, and the owner is also faced with foreclosure on another property in Dorchester, on Carlos St.

“We haven’t seen anything quite like this neighborhood, where in such a small geographic area there’s such a concentration of foreclosures,” said mayoral advisor Pat Canavan, in an interview on Neighborhood Network News.

Canavan said there will probably be two buyers salvaging the foreclosed houses, possibly as rental property until the neighborhood around Hendry St is stabilized.

“This is one situation where we think the private market will not work,” said Canavan. “Across the city, we don’t anticipate a whole lot of city involvement on foreclosed properties because we think the private market will take care of it.”

One observer who has been rehabilitating distressed properties in Dorchester since the late 1970’s, Patrick Cooke, agrees that it’s too soon to expect new owner-occupants to take on a home around Hendry St.

“Whoever buys it has got to be in for the long haul,” said Cooke, “and be prepared to lose money for several years.”

Though Cooke says the density and lack of open space around Hendy St would always make the area a challenge, he says the sharp rise and fall of the real estate market has also left other neighborhoods in Dorchester vulnerable.

“There are a whole lot more streets that will be as problematic as Hendry St,” he predicted.

While few streets in Dorchester have the same concentration of boarded-up buildings, signs of financial distress can be found as far away as Ashmont Street in Neponset and in the St. Mark’s area. In a conversion at 11 St. Mark’s Rd, three units that sold in 2006 for at least $325,000 apiece were all at least in foreclosure process by January of this year. And a condo in a three-decker on Ashmont St that sold less than three years ago for more than $400,000—with hardwood floors, marble countertops and Jacuzzi—is currently on the market for $250,000.

The transactions leading to foreclosure around Hendry Street also took place near the peak of a real estate market, when prices soared as multi-family houses were converted into condominiums. Though the market left many other properties noticeably improved, the flood of financing around Hendry St only made it possible for sellers to walk away before the next buyers defaulted.

“We went through a period in basically four years in which it made no sense to buy a three-decker as a three-decker. The people who bought three-deckers were in the market for a conversion,” said Cooke.

“If we don’t change the way of mortgage lending now,” he said, “this will be a way of life.”

For more coverage on foreclosures in Dorchester, visit the Dorchester Reporter.

Primary Impressions from Boston

There are two less than enchanted views of the Democratic presidential primary vote in Boston and across Massachusetts. One is that Barack Obama should have done better, and that his charisma and high-profile endorsements failed to meet expectations for votes. The other view is that Hillary Clinton’s advantage among Massachusetts Democrats was less about her appeal as a public figure than about campaign spending and organization.

There were 116,024 votes cast from Boston in the Democratic primary alone. That’s more than twice the number cast in a primary contest 8 years ago between Bill Bradley and a heavily favored vice president, Al Gore. The number of Boston votes in all parties yesterday was also about 70% of the total vote for president in November of 2000. Both comparisons are unfair, though they place the turnout roughly half-way between a typical Mass. presidential primary and a tightly contested final vote for President.

Obama’s win in Boston (with almost 53% of the vote) was as expected as Clinton’s win in Massachusetts. It was hardly surprising that Clinton carried South Boston, West Roxbury, Brighton, and (by a small margin) Dorchester’s Ward 16 (Neponset, Cedar Grove), along with the Savin Hill area (Ward 13, Precinct 10). She also carried the main precinct in Chinatown (Ward 3, Precinct 8) with more than 60% of the vote. Citywide, Clinton got a little over 44% of the vote.

Obama, as expected, had a decisive edge in Boston’s African-American community, in Roxbury, Dorchester, and Mattapan. He carried the Back Bay, the Fenway, Jamaica Plain, and Mission Hill. He won some precincts in the South End, Roslindale (between Fallon Field and the Arnold Arboretum, and the Washington-Beech public housing and former High Point Village developments) and Hyde Park (mostly between the Neponset River and Hyde Park Avenue, north of Cleary Square; along with Sunnyside and Stony Brook areas, and neighboring Georgetowne). But Clinton won in other sections of Ward 18—Fairmount, Readville, and Clarendon Hills.

State Rep. Michael Moran said he was somewhat surprised by the breadth of support for Clinton in Charlestown. “She won the ‘Townie’ vote,” said Moran. “But the ‘Toonie’ vote went her way, too.” And Moran attributes Clinton’s win in East Boston to a combination of the older base of Italian-Americans and the newer base of Latinos, many of them recent immigrants. Clinton has enjoyed a solid advantage from Latinos in other states, especially California, but the advantage was less apparent from returns in Jamaica Plain, where all but a few precincts (such as Jamaica Hills’ Ward 19, Precinct 2) were carried by Obama.

To be sure, one factor in the Boston vote was the organizational help from Clinton supporters such as Mayor Thomas Menino and House Speaker Sal DiMasi. If it isn't necessarily fair to see Obama's win in Boston as a sign of weakness for Menino, the same goes for how Clinton's statewide victory reflects on prominent Obama supporters. Obama's margin of victory in Boston was much smaller than Deval Patrick's in 2006, but no one could say Kerry Healey's appeal to voters across the board in Boston was anything near the appeal of Hillary Clinton among the city's Democrats.


The total number of Republican votes from Boston in the presidential primary was less than the total for 2000. That could mean a drop in support for the party, though it also be the response to John McCain’s clear nationwide advantage over former Massachusetts governor Mitt Romney. But in the figures from Boston, the race was tighter than it was for the Democrats: McCain with 46%, Romney with 44%, then Ron Paul finishing 3rd with a little more than 4%. McCain did noticeably better in the Back Bay than in South Boston. That might be explained by a difference in reaction to Romney’s more persistent call for tougher control of immigration. The immigration issue might also explain McCain’s strong showing in Chinatown’s Ward 3, Precinct 8, where Republicans gave him 75% of the vote.

To invoke another unfair comparison, McCain got a bigger local share of the primary vote in 2000. That year, there were no other Republican candidates with anything like Romney's connection to Massachusetts, but there was George W. Bush. In the Boston total for 2000, McCain got 66.4% of the vote, while Bush got 27.7%. In South Boston the margin was even more lopsided, with McCain getting 72.1% of the vote and Bush, 24.1%. In the 2008 Republican primary vote from South Boston, Romney outpolled McCain by a count of 901 to 874. The difference between McCain results in the two Massachusetts primaries is partly about geography, but also about the relative discomfort with some of McCain's positions--a discomfort that could be rechanneled in November.