People in the Rust Belt Look to Payday Loans for Aid

The Rust Belt

People in the Rust Belt of America are looking to payday loans for help with the housing crisis. The Associated Press released a data study collected by the U.S. Postal service showing that areas hit by the recession of the 80s are still suffering.

Cities like Flint Michigan, Columbus Ohio, Buffalo New York and Indianapolis Indiana are some of the emptiest areas in the U.S. Cindy Olejniczak of Buffalo said, “I’d move in a heartbeat if I had somewhere to go right now.”

Approximately one in every three homes in her neighborhood are boarded up and vacant. Her area is so bad, pizza delivery isn’t even an option anymore. “It’s almost like you wish they would just level the whole neighborhood,” she added, “and start rebuilding again from scratch.”

The government allotted over $6 billion for leveling and rebuilding, but analysts say that the money will only make a small dent in the housing problem. Approximately 4 million vacant homes have been uninhabited for 90 or more days, according to the AP.

The Federal money

The money coming from the Federal government will be given out based on a complex formula that involves local rates of foreclosures, high-cost mortgages and vacant properties. Unfortunately, the hardest hit areas won’t be able to be completely turned around.

For example, neighborhoods west of Columbus Ohio are deemed one of the most vacant in the U.S. Its only residents are a few apartment dwellers in a mostly-vacant building, chained off parking lots, a payday loan store, numerous abandoned retail stores and a strip club. Roughly 70% of the area’s houses are vacant and there aren’t enough funds to completely rehabilitate the entire area.

Government concern

The government is highly concerned with the number of abandoned residences throughout the nation and see it as a potential detriment to the economy’s much-needed growth.

Jennifer Vey, researcher for Brookings Institution stated, “Empty housing feeds upon itself…as more houses stand vacant, property values and tax revenues drop. The drop in property values leads to fewer buyers, which leads to more vacancies. It becomes a vicious cycle.”

It’s no wonder the government is trying to focus on rebuilding neighborhoods. In the late 1960s Flint, Michigan’s factories employed thousands of residents. Now, only one is still open. All the others have been vacant or torn down over the years, driving residents out of the neighborhood. City officials are considering bulldozing huge parts of the city, noting that almost one out of every three homes are vacant. They know that abandoned homes bring looters.

Critics

“I think the direction the city is going in isn’t helping the low-income and middle-class people,” said Rev. Leroy Owens, leader of a Christian outreach ministry that owns rental properties. “The lower-income people need a place to live, too. They are getting discouraged.”

Despite future plans to introduce low-income housing and middle-class developments, some residents believe that it is too late. Many of the low-income residents have already left, looking for affordable housing elsewhere. It’s not likely they will be returning when “there’s nothing to return to” says Owens.

Remaining residents

Staying in the Rust Belt is proving to be a struggle for residents. It’s difficult to see their cities slowly decay as a result of the recession. Residents manage to remain in their homes with the help of outreach programs, payday loans and charity organizations. It’s an uphill battle, but they are committed to waiting in their homes for the recession to come to an end and hoping things will revive.