Homeownership beyond the reach of many black Americans – Silicon Valley
The dream of homeownership still eludes many black Americans.
We remember the racial divide that particular weekend. It is the 100th anniversary of the massacre of black Americans in Tulsa. The prosperous neighborhood known as “Black Wall Street” was destroyed by a white mob. The deadly riot began on May 31, 1921, killing hundreds of people in crimes that were never prosecuted. The attacks too devastated the economic dynamic created by the city’s black residents.
Today, half a century after the civil rights movement attempted to erase decades of government-sponsored racism from the home buying system, black families are still much less likely to own homes. their house. And those who own tend to live in homes that are worth much less than others.
Nationally, 42% of black households live in a home they own compared to 72% of white households, according to Zillow’s compilation of 2019 census data, the latest data available.
Five of the six California metropolitan areas studied have homeownership rates below the national standard, and racial gaps were greater than the United States spread across four of those areas. Note also that the rate of ownership of blacks in Tulsa is 39% against 71% for whites.
Income, credit history, education and career choices contribute to this deficit. But we cannot ignore the historically racist heritage of housing which includes prohibiting blacks from owning in certain neighborhoods and a lending process that is still not fair to many minorities.
Such economic cleavages only add to a lingering racial wealth gap, fueling the tensions that were a factor in civil unrest across the country during the time of the pandemic.
“The problems caused by historical discrimination will not be resolved quickly, but addressing issues such as improving access to credit, fairer lending standards and reducing exclusion zoning could make buying more efficient. accessible and make significant progress towards closing the wealth gap, ”economist Zillow Treh Dit Manhertz.
“The problems run deep and perpetuate inequalities,” he says. “An intentional, focused and dedicated policy is needed to fix this faulty system.”
Property differences are not uniform across the country.
My trusty spreadsheet – filled with Zillow’s analysis of 49 major metropolitan areas, plus Tulsa – found that the biggest racial property gap was in Minneapolis, the racial unrest flashpoint of the year. last after George Floyd was killed below the knee of a police officer.
In Minneapolis, 25.6% of blacks lived in homes they owned – the lowest of those 50 subways – compared to 76.4% of whites.
The second largest gap was in Milwaukee, where 26.7% of blacks owned (second lowest) versus 70.1% for whites (33rd). Then came Pittsburgh, where 31.4% of blacks owned (eighth lowest) versus 73.1% for whites (# 22).
The smallest gap was in Washington, DC, with 50.6% black ownership – (the highest in the country) versus 72.4% for whites (# 24).
Next is the Los Angeles-Orange County subway, a hard place to own. Homeownership for blacks is 34.6% (12th lowest), while 56.5% for whites, the lowest homeownership rate in the United States
Then comes Orlando, with 48.5% of blacks (fifth in importance) against 71.4% for whites (29th).
The challenge is not just a weak black property.
Black-owned properties are also much less valuable. Considering how homeownership can improve a family’s finances, lower values limit the possibilities for black families to build generational wealth.
Owners generate more owners. A good example is that parents use a second mortgage to help their children make down payments.
Just look at what Zillow’s valuation calculations show nationwide: Blacks owned homes with a typical value of $ 229,182 in the first quarter of 2021 – 18% less than whites.
Again, the regional spread is lousy.
The worst was Detroit, where black-owned homes were worth $ 112,383 – 48.4% less than $ 217,797 for white owners. That gap was a bit higher than that in Birmingham, Alta., Where black homes are worth $ 111,050 – 48.3% less than white homeowners’ $ 214,797. Then came Buffalo, NY, where black houses are valued at $ 112,217 – 45% less than $ 202,558 for whites.
The Riverside and San Bernardino counties metropolitan area had the smallest gap: black houses were worth $ 436,440 – just 2% less than $ 445,347 for whites. Next is Portland, with black houses at $ 450,661 – 4% less than $ 467,006 for whites. Then came Las Vegas with black houses at $ 309,412 – 6% less than $ 330,568 for whites.
In Tulsa, black houses are worth $ 109,308 – the lowest of the 50 subways – compared to $ 170,527 for whites. That’s 36% less – the eighth largest gap among the 50 subways.
Who helps whom?
While thinking about these racial gaps, let’s think about helping homeowners in the age of the pandemic.
The historically low rates designed by the Federal Reserve – good for buying or refinancing existing loans – helped borrowers who probably didn’t need much help. Homeowners who couldn’t make payments qualified for generous forbearance programs.
Remember that blacks are 60% less likely to own than whites. They were therefore much less likely to reap the benefits of cheap loans and help with housing default.
Perhaps worse, the resulting spike in real estate prices will make ownership difficult for all first-time buyers, making the chances of blacks improving their ownership interest even more difficult.
How California subways performed in Zillow’s study, ranked by their ownership gap.
San José: 27.5% black ownership (lowest n ° 3) against 61.8% for whites (n ° 47) – gap of 34.3 points (n ° 16). Values? Blacks at $ 1.25 million versus $ 1.43 million for Whites. That’s 13% less – gap # 40.
Sacramento: 34.3% of black property (n ° 40) against 68.6% for whites (n ° 40) – difference of 34.3 points (n ° 16). Values? Blacks at $ 453,275 versus $ 496,468 for Whites. That’s 9% less – gap # 46.
San Diego: 29.0% of black ownership (n ° 46) against 61.8% for whites (n ° 48) – difference of 32.8 points (n ° 23). Values? Blacks at $ 575,152 versus $ 744,052 for Whites. That’s 23% less – gap # 22.
Interior Empire: 45.5% of black property (n ° 10) against 71.4% for whites (n ° 29) – difference of 25.9 points (n ° 42). Values? Blacks at $ 436,440 versus $ 445,347 for Whites. That’s 2% less – the smallest gap.
San Francisco: 34.9% of black ownership (n ° 37) against 60.1% for whites (second lowest) – difference of 25.2 points (n ° 45). Values? Blacks at $ 946,828 versus $ 1.27 million for Whites. That’s 25% less – gap # 15.
LA-OC: 34.6% black ownership (# 39) versus 56.5% for whites (lowest) – 21.9 point difference (second smallest). Values? Blacks at $ 618,485 versus $ 901,582 for Whites. That’s 31% less – gap # 10.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be contacted at [email protected]