PCRG's Mortgage Lending Study Looks Toward Peer Cities

14 Sep

Changes are coming to PCRG’s Mortgage Lending Study to make it more user-friendly, and targeted at trends we’re seeing in the lending industry. To that end, we are splitting the study into smaller, thematic publications, the first being a peer cities analysis that compares our city’s low- and moderate-income lending practices to other economically and demographically similar areas.

Although we’ve deemed it a peer cities analysis, we’re actually examining cities at the metropolitan level (MSA). Banks don’t confine their business within city, or even county limits, so it seemed wisest to expand the scope of our research to the city and its neighboring counties. Selecting peers for Pittsburgh was no easy feat, and it confirmed something we all know: Pittsburgh is a special place. Getting at “peer-ness” required sifting through loads of data, and nearly 40 variables were selected, including MSA population, poverty rate, median household income, median home sale price, and home ownership. Sixteen cities passed muster, some more so than others, and include Buffalo, Richmond, Louisville, Milwaukee, Nashville, Indianapolis, Columbus, Kansas City, Cleveland, Cincinnati, Charlotte, Portland, Baltimore, St. Louis, Denver, and Minneapolis.

The full study will be published within the next couple months, but some initial findings indicate that:

1) Pittsburgh is populous, like Portland, Denver, and Baltimore – though the city proper barely tops 300,000 people, our MSA’s population is nearly 2.4 million.

2) Pittsburgh in homogeneous, like Minneapolis, Buffalo, and Portland; of the 17 MSAs in the study, Pittsburgh has the highest percentage of white residents at 88%. In fact, no one even comes close; the nearest city on the list is Buffalo at 81%. When you include the black population at 8.2%, that leaves only 4% to comprise all other racial and ethnic groups.

3) Pittsburgh is large, like Denver, Nashville, and Minneapolis; the area of our MSA (in square miles) is double that of cities like Baltimore and St. Louis. However, the City of Pittsburgh itself is quite small –  only 1% of the land within our MSA.

4) Pittsburgh is low earning, like Buffalo, Louisville, and Cleveland; both whites and blacks have low median household incomes. In fact, Pittsburgh’s MSA has the lowest white and 4th lowest black median household income of the 17 cities.

5) Lastly, Pittsburgh is sprawling, like St. Louis, Minneapolis, and Cincinnati. Only 13% of our MSA’s population is within the city of Pittsburgh.

denial rates

Our next step is to compare Pittsburgh’s lending data with its peers (while controlling for major differences between the cities). If there is a factor or factors unique to Pittsburgh impacting low- and moderate-income communities’ access to fair lending, we hope to get closer to discovering it with this study.

For more information about PCRG’s Mortgage Lending Study, contact Alix Levy, PCRG’s Research Analyst, at alevy@pcrg.org or (412) 391-6732 ext. 202.

Alix Levy

Research Analyst at PCRG
Despite repeated attempts, Alix has always found a reason to stay in her hometown of Pittsburgh. She received both her undergraduate and graduate degrees from the University of Pittsburgh, with a one-year stint in Freiburg, Germany studying the European Union. Prior to joining PCRG, Alix was a community development consultant and adjunct professor. You can find her running around the East End, reading on her back patio, yelling about politics, and planning what to cook next.