Speaking of the geography of financialization, Alex Schafran had a fantastic post at Polis last December on race, foreclosure, and rhetoric surrounding the “death of the fringe suburb”.

In forthcoming work done with my colleague Jake Wegmann, analyzing real-estate data in the region since 1988, we can show that the zip codes to which African Americans migrated were doing well in terms of median home value until 2005, long after the migration had begun. Not just well overall, but well against San Francisco’s Cole Valley, one of the most gentrifying places around. Their presence in the fast growing portions of deep suburbia did not cause the crisis, and their decision to move made sense. If you were black and middle class, moving to places like Antioch and Patterson seemed like a good deal — a chance at a piece of the American pie and a rational economic decision. Nobody realized how shaky the terms of the deal would turn out to be.

This is one of the many reasons that Chris Leinberger needs to change his tune. I agree that sprawl was a bad idea, that growth on the fringe helped bring the economy down and that urban centers are the heart of our global future. We’ve known this since suburbanization began in earnest two generations ago. But we failed to stop it.

Now the “fringe” in Northern California alone is home to millions. And in the 24 Bay Area cities [analyzed by Schafran], almost half a million of the 850,000 residents are not white. These are generally hard-working families who followed the same suburban path the white masses went down a generation or two ago — except much farther from city centers and with worse debt, less job security and no real mass transit. This is a generational raw deal hatched at every scale of our urban development.

The foreclosure crisis is a national tragedy that hand-wringing about the failures of sprawl will not undo. Predicting the “death of the fringe suburb” is reminiscent of the harmful language used to describe cities in the days before urban renewal, when we labeled the neighborhoods of the working classes and communities of color as “slums” and “ghettos,” bulldozing what we could and redlining the rest. This massive and exceptionally racist failure of urban policy in the post-war era laid the groundwork for this crisis more than a half century ago. While we were busy destroying inner cities and building nice suburbs, we denied African Americans the right to move out as well.

Schafran’s post is well-worth reading in full, particularly for the compelling maps he has produced.

Why is this a landscape whose origins can be traced at least in part to financialization? There are a number of reasons, including the disproportionate impact of public-sector austerity (and accompanying job losses) on the African-American middle class that Schafran refers to, the general hunger for exurban expansion produced by the reliance of the various invented products at the heart of the financial crisis — collaterialized debt obligations, credit default swaps, and so on –on a steady supply of new homes and fresh mortgages, the role of the financial sector in foreclosure fraud, and the ties between the mortgage market and the shadow banking system.

[Friend-of-the-blog Peter Nunns also wrote about Leinberger and Schafran’s posts. Also, earlier posts on mammoth in defense of understanding suburbia and on the American home as a (now-busted) machine for making money.]