You recall Ben Bernanke? The former Federal Reserve chairman? The guy who was in charge of America's entire money supply?
This week, Bernanke told an audience the mortgage market is so tight that even he is having a hard time refinancing his own home loan. Bloomberg reports that when the audience laughed, Bernanke said, “I’m not making that up. ... I think it’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions."
We relay this story for one reason: the tight lending market is hindering economic development efforts here in Dorchester, it appears.
In recent months, the Times reported on plans to bring a cafe and bakery to Dorchester, as well as a serious attempt to build a bowling alley north of the current location of City Slickers Bar and Grill.
Both reports were accurate, but both have also hit a roadblock when it comes to financing, according to sources. (Note: Neither party was asked for comments by the Times.)
Since the banking crisis of 2008, banks and credit unions have become much more hesitant to lend to any home or business that presents even a small amount of risk. Record low interest rates don't help, since there's a considerably smaller amount of reward for lenders to do business with borrowers without significant resources. We can't say we blame the lenders for not wanting to stick their necks out.
This leads us to questions asked in a previous post:
- What is the long-term plan to repair Dorchester's downtown structures?
- How do we encourage private owners to make the necessary improvements?
- Does Dorchester need a "building improvement fund" to match the efforts of business owners?
It's worth exploring.