This story was originally published by Reveal from The Center for Investigative Reporting, a nonprofit news organization based in the San Francisco Bay Area. Learn more at revealnews.org and subscribe to the Reveal podcast, produced with PRX, at revealnews.org/podcast.
As a Democratic candidate for president, Pete Buttigieg, the 38-year-old former mayor of South Bend, Indiana, has struggled to win African American and Latino support, polling in the single digits. He’s countered with promises to fight housing discrimination, boost African American homeownership and close the racial wealth gap.
He has argued that these measures are necessary to combat the legacy of redlining – the government-sponsored lending discrimination of his grandparents’ generation. “Redlining didn’t just force Black Americans to live in segregated neighborhoods,” Buttigieg recently tweeted, “it robbed them of billions in economic opportunity.”
But a review of government lending data by Reveal from The Center for Investigative Reporting shows that Buttigieg, who already has faced criticism for overseeing a massive home demolition program in South Bend’s predominantly black and brown west side, did little to confront the legacy of redlining in his own backyard when he was mayor. Nor did he help African American and Latino families live the American dream of homeownership.
In fact, under Buttigieg, home lending in South Bend looked a lot like an old redlining map – with the vast majority of mortgages flowing to white families buying in majority-white neighborhoods.
South Bend is a racially diverse city. About half of the city’s 100,000 residents are white, another quarter are black and 15 are percent Latino, according to the Census Bureau. Geographically speaking, half of its neighborhoods are majority white, while in the other half, a majority of residents are people of color.
Yet Reveal’s analysis found that from 2012, when Buttigieg took office, until the end of 2017, banks and other mortgage lenders helped 3,749 white families buy homes, compared with 347 black families and 315 Latino families. In all, about 80 percent of home loans went to white families buying in white neighborhoods.
Home loans by race in South Bend
South Bend, Indiana, is a racially mixed city. About half the residents are
white, another quarter are black and 15 percent are Latino. A Reveal
analysis found that during most of Pete Buttigieg’s tenure as mayor from
2012 to 2019, the vast majority of mortgages went to white homebuyers.
800 home purchase loans
American Indian or
Native Hawaiian or
Other Pacific Islander
Source: Home Mortgage Disclosure Act, Reveal analysis
Credit: Gabriel Hongsdusit/Reveal
Records from the Federal Deposit Insurance Corp. show that banks opened six new branches in South Bend during Buttigieg’s time in office – all in majority-white neighborhoods.
“Redlining around here already existed prior to him coming in,” Henry Davis Jr., a long-serving member of the South Bend Common Council, said of Buttigieg. “He just exacerbated it.” Now, said Davis, who represents parts of the city’s west side, the city feels “more segregated than ever.”
The Buttigieg campaign did not dispute Reveal’s findings, but spokesperson Sean Savett provided a statement saying that addressing housing discrimination is one reason Buttigieg is running for president.
“Pete has seen the impact that decades of racial segregation and racial inequities have had in his city and across the country, and he knows it requires the full force of the federal government to undo these injustices,” the campaign said. “Mortgage discrimination is a federal crime that requires federal enforcement, and it’s unacceptable that our country is moving in the opposite direction as the Trump Administration works to undo rules that address racial discrimination in the housing market.”
The Buttigieg campaign also pointed to the candidate’s proposals to increase African American homeownership, part of Buttigieg’s Douglass Plan announced last year, which he describes as “a comprehensive and intentional dismantling of racist structures and systems” combined with “investment of unprecedented scale.”
Judith Fox, a law professor at the University of Notre Dame who served on the advisory board of the federal Consumer Financial Protection Bureau, said the lack of traditional bank lending to people of color in South Bend has left African Americans and Latinos vulnerable to predatory rent-to-own agreements and land contracts, in which families can easily lose their homes after even one missed payment and be left with nothing.
This is especially disturbing, she says, because homes in South Bend are relatively affordable – the median list price is $124,000. Many families end up paying more in rent than they would on a mortgage – if banks would only give them a loan. “It’s the perfect storm of nightmare,” Fox said.
According to the Eviction Lab at Princeton University, the eviction rate in South Bend is among the highest in the country.
Still, Buttigieg takes pride in his housing record.
In his political memoir, “Shortest Way Home: One Mayor’s Challenge and a Model for America’s Future,” Buttigieg writes of his “data-driven management” of housing policy – which manifested in the demolition of more than 1,000 homes in South Bend, most of which were on the city’s primarily black west side.
To do this, Buttigieg redirected money provided by then-President Barack Obama’s Treasury Department, which was originally designed to help struggling homeowners who were behind on their mortgage payments. In his book, Buttigieg says the money otherwise would have been returned unspent and cheered it as “creative lawyering.”
According to Fox, the demolitions won Buttigieg some fans back home. “The houses were torn down because they were abandoned,” she said. “Drugs lords were moving in, people were camping out and the neighbors were complaining. This has gotten lost in the national narrative.”
But for Davis, the city councilman, Buttigieg simply bulldozed blight and replaced it with nothing.
“You get rid of vacant and abandoned housing, but it’s still in the neighborhood,” he told Reveal. “You’re knocking down houses – so what’s next? Next never came.”
This story was edited by Esther Kaplan and copy edited by Nikki Frick.
Aaron Glantz is a senior reporter at Reveal and author of the book “Homewreckers: How a Gang of Wall Street Kingpins, Hedge Fund Magnates, Crooked Banks, and Vulture Capitalists Suckered Millions Out of Their Homes and Demolished the American Dream” (Custom House).
Glantz can be reached at email@example.com. Follow him on Twitter: @Aaron_Glantz.