Blacks in Annapolis are more than three times as likely as whites to be turned down for a housing loan in Annapolis and are refused loans at a rate higher than other blacks throughout Anne Arundel County and Baltimore City, according to a study by an economist.
Joseph E. Cater III, an economist for the Office of Policy Development and Research at the U.S. Department of Housing and Urban Development, issued the 23-page report May 1.
The Annapolis resident volunteered to study loan approval and denial rates after the city's Human Relations Commission decided in December to investigate whether Annapolis banks discriminate against minority loan applicants.
Annapolis residents filed 654 loan applications in 1990, Anne Arundel County residents filed 10,792, and Baltimoreans filed 52,949.
Of whites, blacks, Asians and Hispanics, blacks had the highest denial rates in all three areas.
Denial rates for blacks were highest in Annapolis at 29.5, compared with 8.4 percent for whites. Anne Arundel County had a denial rate of 24.3 percent for blacks, 10.7 percent for whites, 11.4 percent for Hispanics and 5.6 percent for Asians.
The denial rate for blacks in the Baltimore area was 26.1 percent, compared with 10.4 percent for whites.
The number of Asians and Hispanics applying for loans in LTC Annapolis was too small to be statistically significant.
Not everyone found the results of the study startling.
"I'm not surprised," said Trudy McGowan, a member of the Annapolis Human Relations Commission. "For years, I've noticed that people who are not from here are given loans before our own African-Americans. I've been denied housing [loans] myself.
"My son's wife, who is white, was told she would be able to get a loan," she said. "But when [my son] went in with her, they were told they didn't qualify. It's just so unfair."
The 15-member volunteer commission agreed to conduct the investigation at the request of Alderman Carl O. Snowden, a Ward 5 Democrat.
The alderman said he became concerned about discrimination by lending institutions after reading about a national survey by the Federal Reserve Board that showed blacks and Hispanics were denied loans even if they had the same credit ratings as whites.
"I wanted to know if, on a local level, we were reflective of the nation," Mr. Snowden said. "I felt it was important that we have an official study done. I was startled by its conclusions."
Donald Aronson, chairman of the commission, said he, too, was surprised.
"I can't believe [banks] would consider race in this day and age," Mr. Aronson said. "It's just inconceivable to me. I'm trying to find other reasons for this. But I look at this almost as a progress report, a way of saying, 'Annapolis, we have a way to go.' "
Robert Henel, president and chief executive officer of Annapolis Bank and Trust, blamed the cost of housing in relatively upscale Annapolis for the disparity in loan denials.
"I honestly think that the institutions [provide loans] on a nondiscriminating basis," Mr. Henel said. "I think banks make an effort to be very conscious of everybody and try to make loans to everyone who qualifies."