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 Estatecolor> that examined pathways to minority homeownership.
In an effort to help narrow the widening gap in homeownership among blacks and Latinos compared to whites, Lusk Center's researchers Stuart Gabriel, Ph.D., and Gary Painter, Ph.D.color>, 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," says Gabriel, director of the Lusk Center.color> "By researching the causes, we hope to find ways that public policy and financial markets can relieve the gaps in homeownership."
"That is crucial, because homeownership is the primary vehicle for wealth accumulation in America," adds Painter, the Lusk Center's director of research.color>
The first part of this study analyzed 1990 Census data for Los Angeles County; Washington, D.C.; and Chicago. Future phases of the research will analyze data from the Census 2000.
"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," says 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," Gabriel says.
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," Painter says. 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, Ind.
The research for Los Angeles, Chicago, and Washington, D.C., 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," Painter says.