Ownership rate slips to 29%; state ranks No. 45 in the U.S.
BY GITA SITARAMIAH and MARYJO SYLWESTER
Pioneer Press
U.S. Census data released this week show big gains in homeownership for Asian and Latino households in Minnesota between 2000 and 2005, but the homeownership rate for blacks slipped to 29 percent in Minnesota from 32 percent in 2000. Minnesota ranks No. 45 in the 50 states and the District of Columbia for homeownership among black households.
The overall homeownership rate in Minnesota rose slightly to 76 percent in 2005, and the rate for white households increased to 79 percent.
In Wisconsin, the situation was not quite as stark: Wisconsin ranks 17th for homeownership nationally and 35th in the country for homeownership among blacks.
The obstacles to homeownership are partly economic. The median income for Minnesota's black households is $25,000, less than half the state's overall median household income of $52,000. It's also less than the national median income of $31,000 for black households. With the Twin Cities median home price at $235,000, homeownership is out of reach for many.
"People can talk about the economy being up, but that's not noticeable in the black community," said Bobby Hickman, 70, a St. Paul activist. "You can go up and down the street, and I don't hear anybody saying the economy is great. How would we know? People don't have the incomes for homeownership."
"With a $25,000 income, you're not buying a home anywhere now," said Chip Halbach, executive director of the Minnesota Housing Partnership, a St. Paul-based nonprofit that promotes affordable housing. "Even with the innovative programs, you can't be reached."
Besides lower incomes, blacks face other obstacles, said Debbie Montgomery, a St. Paul City Council member, such as higher incarceration rates and the loss of middle-income jobs resulting from shifts such as the eventual closing of the Ford plant in St. Paul.
She also noted that homeownership comes harder for single-parent families, which are more prevalent in the black community. Married couples make up more than half of all the households in the state, but just 25 percent of black households. "We've got a lot of social issues here," Montgomery said.
Michael Brock, a Realtor for Keller Williams in Shoreview who is black, said he's observed some cultural differences between blacks and other groups. "Some ethnic groups band together and assist each other in buying homes," he said. "That doesn't happen in the black community as much as with the Hmong community and the Middle Eastern cultures I'm seeing."
Some blacks who buy homes become victims of predatory lending or are more vulnerable to foreclosure when times are tough because of lower income levels, experts say. "You have a problem with an existing population holding onto their homes and not a lot of new purchasing power, middle-income African-American households just buying now," Halbach said.
Then, there are those in a position to buy who may not even know it.
"There's a lot of people who don't think they can ever afford a home and they don't ever pursue it," said Cheneta Hughey, a Realtor with Coldwell Banker Burnet in Minneapolis who is black. "They may not realize their rent is as much as a mortgage."
Besides, taking out a $200,000 mortgage might be too overwhelming for some. "If you grew up in a culture of renters, that's the comfort level," said Marques Celestine, a mortgage broker and partner in Banneker Finance and Mortgage of Minneapolis who is black.
Minnesota Housing Finance Agency Commissioner Tim Marx said homeownership rates among minorities are a big priority for both government and business leaders because those groups are growing fast and homeownership is a primary vehicle for building personal wealth and neighborhood stability.
Shawn Huckleby, executive director of the state's Emerging Markets and Homeownership Initiative, is coordinating the first stages of an effort by state and business leaders to help bridge the homeownership gap between whites and minorities.
Kim Gill, a paralegal with the U.S. Army National Guard who is black, earns $45,000 a year and got $10,000 in federal and state first-time homebuyer money to help buy her $168,000 town home in Cottage Grove. The money is forgivable if she lives there for five years. "That's automatic equity for walking into the house," said Gill, 23.
Gill knew about such programs because she had a friend who is a Realtor, but it may take a while for such programs to take hold.
"Being very realistic, numbers are not going to change dramatically overnight," Huckleby said.
"We're talking about housing patterns that have been in place for generations."
Gita Sitaramiah can be reached at 651-228-5472 or [email protected].
Kim Gill, a paralegal with the U.S. Army National Guard who is black, earns $45,000 a year and got $10,000 in federal and state first-time homebuyer money to help buy her $168,000 town home in Cottage Grove. The money is forgivable if she lives there for five years. "That's automatic equity for walking into the house," said Gill, 23.
Source: Poineer Press, Oct. 03, 2006