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. Future phases of the research will analyze data from the 2000 Census and include the cities of Washington DC and Chicago. “The 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.
The data showed that while homeownerships rates for minorities are virtually unchanged in the past 10 years – a 33 percent black homeownership rate in the City of Los Angeles that is a full 25 percentage points lower than that of whites and 30 percentage points below the national average –a small percentage of black families moved outside the city of Los Angeles when their incomes rose.
“Of concern, however, is the fact that recent data from the third quarter of 2003 shows white homeownership reached 68.4 percent nationwide, but black households were again 25 percent lower,” said Gabriel.
Painter pointed out that the vast majority of blacks choose to in Los Angeles neighborhoods with established black populations. “The more affordable single-family home are in outlying area such as San Bernardino and Riverside Counties, but those areas historically do not attract black households,” he explained, adding that homeownership rates of black households are the most sensitive to changes in income.
The research also showed that blacks are concentrated in areas with the highest 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.”