AILSA CHANG, HOST:
All week, as part of our series on American democracy called We Hold These Truths, we've been looking at property ownership in this country and the structural barriers facing Black homebuyers. Today we pick up where we left off yesterday - the flight out of Compton, Calif. You see; as Black residents streamed out of that city for safer neighborhoods and more space, many turned to a region that promised a new start only to become targets of predatory schemes. Producer Janaki Mehta and I travel east of Los Angeles to the Inland Empire.
JONAKI MEHTA, BYLINE: When Billy Ross would come visit his cousins in the Inland Empire back in the 1980s, it was mostly desert and vineyards.
BILLY ROSS: I remember, you know, coming out here, and none of this existed. This park is, like, 15 years old. These houses were built, like, '06, '07, '08.
MEHTA: Ross, who's 45, lives here now just walking distance from this local park in a city called Rancho Cucamonga. We stopped in front of some kids playing on a swing set.
What would you say is the character, the identity of the Inland Empire?
ROSS: It looks and feels safe, and I think that's what a lot of people are looking for, people especially who jump ship from places like where I came from.
MEHTA: Where Ross came from is Compton, once a majority Black city south of downtown LA. He grew up there in the '80s and early '90s, and memories of Compton still bring up conflicted feelings for him.
ROSS: It was magical, and it was incredibly challenging. Like, you know, we'd sit on the porch. I'd get my hair braided. Somebody would walk down the street. Man, you coming down the street? No, yeah. Give me about an hour or so. Let me finish getting my hair braided. That's how I grew up, and that was magical. And it was also messed up, too. It was the kind of environment where I bought my first pistol at 13, 14 years old.
MEHTA: Why? What went through your head at 13, 14 that made you think, I need a pistol?
ROSS: It was dangerous. I mean, it was dangerous. And it was kind of, like, the thing to do, too.
CHANG: This is around the time when the crack epidemic hit. Jobs started leaving Compton and South LA. Police violence against Black people was intensifying, and there was a housing shortage in the city. Owning your own piece just got harder and harder. So a lot of people in Compton began turning their gaze 50 miles east to a region called the Inland Empire. It was exploding with new construction. Ross' relatives would tell him about the huge, gleaming houses there.
When they would describe how they imagined life to be, what is the image they painted for you or for other people who lived in Compton?
ROSS: I think it was fly. It was supposed to be fly, you know? It was like, what? You guys are going to buy a five-bedroom house, and you guys are going to have a pool? Like, what? That's super-fly. You know what I mean? Like, so - and people were willing to commute for that.
MEHTA: They were willing to commute four to five hours round trip for that. By the early 2000s, so many Black residents from Compton had moved into the Inland Empire, one of its neighborhoods became known as Little Compton. But there were still a lot of people in Compton who insisted the right thing to do was to stay - people like Ross' father.
ROSS: His philosophy was, don't move; improve. And we hear that, you know? We hear that a lot...
CHANG: What does that mean?
ROSS: ...Black folk. It means what it says. In the places where we are en masse, there is often an incentive to leave, and that's messed up.
CHANG: Think about how messed up it is, he says, when the place where you grow up, the place you identify with becomes the place you think you need to flee to have a better life.
ROSS: Better - that's so complicated, that word better. We got to leave our communities. You see what I'm saying? Like, we - you don't have a lot of other groups having to make that decision. Like, you got to leave your community to be OK.
MEHTA: But eventually, leaving his community was the best option. After Ross graduated from college, got married and was getting ready to have a kid, he and his wife Tamara (ph) wanted what lots of people would want - safety, more space, good school districts. And the Inland Empire offered all of that.
CHANG: Ross zeroed in on a four-bedroom house with a three-car garage in Fontana. The whole lot was almost 8,000 square feet, and it would cost $525,000. He met a loan officer who offered him a loan with amazing terms - minimal down payment, no proof of income or assets, nothing - just a credit check. That's it.
Was there any part of you at the time when you were looking at the terms of this loan - were you thinking, this is too good to be true?
ROSS: Maybe. There was this kind of feel that this is a secret, and it's being brought to the masses now. That was even part of the pitch. Like, you know, I remember this feeling like, oh, yeah, this is, like - this is the kind of loan white people use. You know, like, why would you use your own money - you know what I mean? - to buy a house?
MEHTA: It was so easy. They told him if he had any problems down the road, he could always refinance. He and Tamara had great credit scores, so they signed their papers. And by June 2006, they moved into their house in Fontana. And immediately Ross threw himself into the pleasures of suburban life.
ROSS: The newness of it was cool. This is a one-story house, and it has space inside and outside. And I could water my own grass like my father did. You know, I had grass.
CHANG: Life was great in Fontana that first year. Ross' career in real estate was taking off. His wife was climbing the ranks as a prosecutor. They were growing their family.
ROSS: And then by the fall of '07, all hell broke loose.
CHANG: The global financial crisis struck. Almost 16% of all the homes in this region went into foreclosure, making the Inland Empire one of the hardest-hit places in the entire country. Many homeowners sought help from the Fair Housing Council of Riverside County, where Rose Mayes is the executive director. She remembers during this time, the phone would not stop ringing.
ROSE MAYES: And, you know, when you hear people crying on the telephone, you hear people just begging you, somebody must listen to us.
MEHTA: During all these phone calls, Mayes says she noticed a pattern. Most of the foreclosures were happening in very specific ZIP codes.
MAYES: 92502, 92503, 4, where you find Hispanics and African Americans - those are the ZIP codes.
MEHTA: Where you saw a lot of subprime loans.
MAYES: Yeah, a lot of subprime loans.
MEHTA: This pattern played out all across the U.S. Black and Latinx borrowers got more high-cost, high-risk mortgages than any other borrowers. Lenders were aggressively trying to sell as many loans as possible, and they targeted some of the most vulnerable people with the riskiest products. They would often steer home buyers who could have qualified for conventional government mortgages into riskier loans that put more money in the lender's pockets, telling buyers they could have a bigger house or lower payments or both.
CHANG: Ross says that even someone like him, a person with real estate industry know-how - even someone like him became a target of the system. And the reason for that, he says, is because the real estate industry has always preyed on Black people.
ROSS: So when the subprime crisis was developing, why the hell were we targeted so precisely and systematically for these products? Why the hell do I, fresh out of college with an 800 FICO - why do I get pitched on the secret?
CHANG: By 2008, Ross says his house was worth half of what he paid. Their mortgage payments were twice what his neighbors were paying to rent homes along his street. So he tried to refinance again and again, but the lenders refused because as long as Ross kept paying his mortgage every month, they had no incentive to cut him a better deal.
ROSS: And I say, oh, I know this game. And it was - that was tough because you have made a commitment, and the commitment is tied in a way to your identity. Like, you see yourself as a certain type of person. So we wrestle with that. And I think Tamara and I ultimately decided these people don't give a damn about us, and they are content to bleed us dry. So we ain't going to pay no more.
MEHTA: So they stopped paying, and Ross knew he and Tamara's credit scores would tank. They would have to swallow that hit for years. He knew that. But he also knew it was the only chance they had to hang onto this house.
CHANG: Eventually, their gamble worked. A lender finally agreed to help them refinance, and in 2019, Ross was able to sell that house in Fontana. The memories of all of that stress still bring tears to his eyes, but Ross says he considers himself one of the lucky few who made it out despite a system he thinks is designed to keep Black people on the bottom.
ROSS: It really makes me sad. It makes me sad - ain't a whole lot of us on this side where we're able to function and kind of take advantage of some of the things that this society has to offer. A lot of us, we don't own property. We don't have equity in the stock market. We don't have equity in this country. We don't own stuff, and ownership is equity.
MEHTA: And that is why Ross isn't wasting his second chance. He's been building a new home in Fontana. And he recalls a recent conversation with a loan officer who was trying to lock him into a loan now, promising him that if he didn't like the terms, he could always refinance down the road.
ROSS: And in my mind, I'm thinking, like, this guy is asking me to gamble. And I told him - I said, dude. I said, I'm Black. I said, we've been there, done that. We're going to measure twice and cut once. And we're probably going to keep this house forever whether we live in it or not. It's going to belong to our children.
CHANG: But he says it's not just about leaving behind a house for his children. It's about passing the baton to the next generation and the one after that so that one day they will have something to call their own.
(SOUNDBITE OF SZA SONG, "DREW BARRYMORE")
CHANG: Tomorrow on this show, how the mortgage crisis changed the way lenders finance homes, making it even harder for many Black Americans to get their foot in the door and to build wealth through homeownership.
[POST-BROADCAST CORRECTION: This story incorrectly states that Billy Ross is building a house in Fontana. The house is in Rancho Cucamonga.]
(SOUNDBITE OF SZA SONG, "DREW BARRYMORE") Transcript provided by NPR, Copyright NPR.
