Minorities Face Wealth/Homeownership Gap; Housing Has Greatest Power to Disenfranchise and Greatest Power to Increase Wealth
WASHINGTON -- Government policies and market practices have contributed to creating the wealth gap between minorities and whites, and because homeownership is the most powerful driver of wealth for most people, the nation must expand homeownership among minorities.
This was one of the major themes that emerged from the NeighborWorks(r) America Reporters Roundtable held this week.
“Although for generations minorities have earned less, have had less access to education, the biggest factor that has created the wealth gap and the one that can close that gap is homeownership,” said Kenneth Wade, CEO of NeighborWorks(r) America.
“If you are denied access to homeownership, you are denied access to building wealth,” said Wade. “Housing has the greatest power to disenfranchise and the greatest power to close the wealth gap,” he added.
Wade echoed the findings of Tom Shapiro, Pokross Professor of Law and Social Policy Brandeis University, roundtable participant and author of the book “The Hidden Cost of Being African American.”
Shapiro took a civil rights perspective on the wealth and homeownership gap saying, “Closing the racial homeownership and wealth gap needs to be at the forefront of the civil rights movement in the 21st century.”
Adding to the day’s mix was J. Philip Thompson, professor of Urban Politics; Massachusetts Institute of Technology, who discussed the impact of homeownership on the political process.
“To increase civil participation, you need to increase property ownership,” Thompson said. “People who reside in the same place over time are more civic-minded and participate in the political process. Permanence and residency correlate highly to civic participation,” he said.
During a two-hour roundtable with journalists, homeownership advocates and academicians debated a number of issues. Among the major topics:
-- While current efforts to increase minority homeownership are working, more public and private resources are needed to move the nation out of the wealth gap dilemma.
-- There is a positive correlation between counseling, and buying and keeping a home.
-- Homeownership counseling is shifting from pre- to post- purchase education for homeowners in an effort to forestall a potential increase in foreclosures among newly minted homeowners.
In some local markets, high housing costs have housing advocates turning attention to post-purchase counseling to sustain gains made in homeownership.
“A lot of people who take sub-prime loans, qualify for conventional loans,” said Ester Cadavid, vice president and chief development officer, Los Angeles NHS, and one of the panelists. “There are a lot of mortgage products out there that many people do not have to use.”
Askia Aquil, executive director, St. Petersburg, (FL) Neighborhood Housing Services spoke about one family who - through the work of counselors - were brought back from the brink of losing their home. “We showed them that the long-term gain of keeping their home far outweighed a short-term remedy of selling the house to stay afloat.”
Roundtable speaker Lee Higgins, applied research manager, NeighborWorks(r) America, noted that NeighborWorks Organizations build long-term relationships which contribute to preserving homeownership and building wealth.
He noted that in the first 18 months of the Home Ownership Preservation Initiative run by Neighborhood Housing Services of Chicago, 940 foreclosures were prevented saving the home for the families and allowing them to build wealth.
Wade has pledged to triple from 700 to 2,100 the number of homeownership counselors certified across the nation-increasing national capacity to serve more than two million individuals each year by 2007 through the NeighborWorks(r) Center for Homeownership Education and Counseling (NCHEC). NCHEC - pronounced n-check - is the largest initiative of its kind to bring families of modest means into the economic mainstream by helping them achieve one of their primary goals in life: buying and keeping a home.
About NeighborWorks(r) America
NeighborWorks(r) America provides financial support, technical assistance and training for communities across the nation, including the NeighborWorks(r) network - a nationwide network of more than 235 community development organizations working in more than 2,700 urban, suburban and rural communities across America. These organizations engage in revitalization strategies that strengthen communities and transform lives. In the last five years alone, NeighborWorks(r) organizations have generated more than $8.5 billion in reinvestment and helped more than 500,000 families of modest means purchase or improve their homes or secure safe, decent rental or mutual housing.
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