Crime and housing affordability can determine if households transition from renters to owners
Los Angeles -- Where a minority family chooses to live heavily influences their decision to rent or own, according to the results of a study at the University of Southern California Lusk Center for Real Estate (www.usc.edu/lusk) that examined pathways to minority homeownership. In an effort to help narrow the widening gap in homeownership among blacks and Latinos compared to whites, the Lusk Center’s Stuart Gabriel, Ph.D., and Gary Painter, Ph.D., embarked on a three-year study funded by the National Association of Realtors to track pathways to homeownership. “Racial segregation and homeownership disparities remain endemic to metropolitan housing markets. By researching the causes, we hope to find ways that public policy and financial markets can relieve the gaps in homeownership,” said Gabriel, director of the Lusk Center. “That is crucial, because homeownership is the primary vehicle for wealth accumulation in America,” added Painter, the Lusk Center’s director of research.
The first part of this study analyzed 1990 Census data for Los Angeles County, Washington DC and Chicago. Future phases of the research will analyze data from the 2000 Census. “The 1990 data was especially rich and plentiful, yielding information on ethnicity, age, marital status, income, education levels, the number of people in a household and their origins,” explained Gabriel.
Of concern, however, is the fact that other recent data from the fourth quarter of 2003 shows the homeownerships rate gap between minorities and whites is virtually unchanged since the 1990 Census. “White homeownership reached 75.5 percent nationwide last year, but black households were at 49.4 percent and Hispanic households reached 47.7 percent,” said Gabriel.
Pointing to 1990 data from Los Angeles County, Painter said that the vast majority of blacks choose to rent in Los Angeles city neighborhoods with established black populations. “The more affordable single-family homes are in outlying areas such as San Bernardino and Riverside Counties, but those areas have only recently begun to attract greater numbers of black households,” he explained. He added that a move to outlying suburbs is a distinct pathway to homeownership, but only a small percentage of black families moved outside the city of Los Angeles when their incomes rose.
In the Washington, D.C., area, black homeowners were most likely to congregate in Maryland’s Prince Georges County and in Chicago, the majority of black homeowners bought affordable properties in Gary, Indiana.
The research for Los Angeles, Chicago and Washington DC also showed that black renters are concentrated in segregated areas that have high crime rates, a significant deterrent to homeownership. “When a city works to lower crime rates, they are rewarded with stable neighborhoods that attract homebuyers, employers and retailers that all bring in tax revenues,” said Gary Painter.
The full research paper can be found here.