Post-re­ces­sion black home­own­er­ship lag­ging

Northwest Arkansas Democrat-Gazette - - NEWS - JANIE HAR In­for­ma­tion for this ar­ti­cle was con­trib­uted by Corey R. Wil­liams and An­ge­liki Kas­ta­nis of The As­so­ci­ated Press.

SAN FRANCISCO — The na­tion’s home­own­er­ship rate ap­pears to be sta­bi­liz­ing, but blacks aren’t shar­ing in the eco­nomic re­cov­ery, ac­cord­ing to a re­port by Har­vard Uni­ver­sity’s Joint Cen­ter for Hous­ing Stud­ies.

The cen­ter said the dis­par­ity be­tween rates of home­own­er­ship for whites and blacks is at its high­est in 70-plus years of data. Asians and His­pan­ics are also see­ing gains in home­own­er­ship.

Ex­perts say rea­sons for the lower home­own­er­ship rate for blacks range from his­toric un­der­em­ploy­ment and low wages to a re­ces­sion-re­lated fore­clo­sure cri­sis that hit black com­mu­ni­ties par­tic­u­larly hard. In 2004, the pin­na­cle of U.S. home­own­er­ship, three-quar­ters of whites and nearly half of blacks owned homes, ac­cord­ing to the Har­vard study.

By 2016, blacks’ home­owner rate had fallen to 42.2 per­cent and lagged 29.7 per­cent­age points be­hind whites, nearly a per­cent­age point higher than in 2015.

“It has al­ways been his­tor­i­cally and sys­tem­i­cally harder for blacks, and we were see­ing there a lit­tle bit of progress, and now we’re back at square one,” said Alanna McCargo, co-di­rec­tor of the Hous­ing Fi­nance Pol­icy Cen­ter at the Ur­ban In­sti­tute, a think-tank fo­cused on in­ner-city is­sues that pub­lished a sim­i­lar re­port.

An AP anal­y­sis of U.S. Cen­sus Bureau sta­tis­tics shows some pock­ets of the Mid­west and Cal­i­for­nia had the low­est home­own­er­ship rates for blacks, while some ar­eas of the South had the high­est.

Low in­ven­tory adds to the prob­lem, said Jeffrey Hicks, in­com­ing pres­i­dent of the Na­tional As­so­ci­a­tion of Real Es­tate Bro­kers, which was founded in 1947 to pro­mote fair hous­ing op­por­tu­ni­ties for mi­nori­ties. The At­lanta area has only about 30,000 prop­er­ties for sale through real es­tate agents, com­pared with ap­prox­i­mately 100,000 about 13 years ago, he said.

“You had sub­di­vi­sions go­ing up ev­ery­where in terms of newer homes,” Hicks said. “We haven’t seen that resur­gence of new hous­ing stock.”

Blacks snapped up homes at the peak of the hous­ing bub­ble, lured by gen­er­ous lend­ing and a glut of af­ford­able prop­er­ties, hous­ing ex­perts say.

Gra­ciano de la Cruz, 70, grew up in San Francisco, the child of a Filipino fa­ther and a black mother. In the 1960s, the city con­demned his mother’s house for re­de­vel­op­ment in the his­tor­i­cally black Fill­more neigh­bor­hood. She was given a hous­ing voucher and be­came a renter, los­ing any eq­uity she could have passed to her chil­dren.

He and his wife, Buena, who is Filipino, must now sell their own home of two decades to pay off a debt that stemmed from a “picka-pay­ment” loan with World Sav­ings Bank in Au­gust 2006.

They asked for a loan with a fixed rate, but the lender said an ad­justable rate pack­age would meet their needs. The ini­tial monthly pay­ment for the pick-a-pay­ment loan was about $1,700.

Then her health de­clined, and he lost his job. In 2014, Wells Fargo, which had pur­chased World Sav­ings, is­sued a no­tice of de­fault. By then, the monthly pay­ments had mush­roomed to roughly $3,000.

“I can’t sleep,” de la Cruz said. “I fear I might get a knock on the door, and the banker will come up with sher­iff’s agents talk­ing about, ‘You got to leave now.’”

The pick-a-pay­ment loans drew wide gov­ern­ment scru­tiny. In 2010, Wells Fargo agreed to pay $24 mil­lion to end an in­ves­ti­ga­tion by eight states, in­clud­ing Cal­i­for­nia, into whether lenders later ac­quired by the bank made un­sus­tain­able mort­gages with­out dis­clos­ing the terms.

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