Massachusetts ranks at the bottom for minority homeownership
Boston Business Journal (CFED)
By: Mary Moore
March 8, 2013
Massachusetts ranks at the bottom compared to other states in the rate of homeownership by people of color, according to data recently released by a think tank in Washington.
Among homes that were owned in Massachusetts in 2011, 32 percent were owned by households of color compared to 69 percent that were owned by whites, according to the Corporation for Enterprise Development.
The gap between minority homeowners and white homeowners puts the state at the bottom of the national pack. In Massachusetts, that ratio of white homeowners to minority homeowners is 2.15 compared to, say, New Mexico, where the ratio is the smallest in the nation at 1.11.
Only New York ranks lower than Massachusetts, with just 28.5 percent of its homes owned by people of color and a 2.32 ratio between white homeownership and minority homeownership.
While the report that CFED issued on Jan. 30 is the most recent assessment of this disparity in Massachusetts, previous reports have shown similar gaps.
"It's a really sad reflection of the overall racial wealth gap in Massachusetts," said Margaret Miley, executive director of the Midas Collaborative in Allston, a local partner for the CFED's report. "We've got a lot of segregation. We've got communities of color where people are not gaining these assets."
The situation has only grown worse for people of color since 2004, when minorities owned 38.7 of owner-occupied homes in Massachusetts compared to the 32 percent in 2011.
Affordable housing advocates say there are a number of factors at work, including the high cost of housing in Massachusetts and the state's large rental housing stock. Other factors, they said, include a historic lack of access to credit, discriminatory mortgage practices, and the fact that minorities generally have less financial support from their families.
The total rate of homeownership in Massachusetts has fallen since 2005, a trend that complicates the problem, said Kasey Wiedrich, a CFED researcher. The total rate of homeownership in Massachusetts fell to 62.1 percent in 2011 from 64 percent in 2005, according to CFED, making the state among the lowest 10 states for homeownership rates.
And Massachusetts is also among the nation's least affordable places, Wiedrich said. In 2011, Massachusetts was the third most expensive state in which to buy a home, beaten only by Hawaii and California.
"If I went to Atlanta and bought a house for what I'd pay for a condo in Boston, I'd probably be sitting on five acres and you'd think I'm the governor," said Darnell Williams, president of the Urban League of Eastern Massachusetts.
Minorities have a much harder time accumulating wealth without homeownership as a foundation, Williams said. A study released in February by Brandeis University showed that the number of years that families have owned their homes is a major contributor to the gap in wealth between whites and minorities.
"We receive less inheritance and less money for the down payment on a home," Williams said. "So we end up in the renting category and the buying category."
This becomes an even bigger concern, Williams said, as minorities reach retirement age and are on a fixed income, when they have less money coming in but continue to pay the same rent.
This problem may not be new, Miley said, but it is still discouraging.
"The acuteness of the racial wealth divide has been around for a while," Miley said. "It's dispiriting to see it's still there."
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