July 19, 2005–NeighborWorks America held its first reporters’ roundtable Monday July 18, inviting the media to discuss the homeownership and wealth gap between minorities and the majority population with a panel of experts, two of whom were from local NeighborWorks organizations.

“One of the major themes of this roundtable is the growing body of knowledge that shows we must view our homeownership activities in terms of asset building, “said Kenneth Wade, NeighborWorks America CEO in summarizing one of the major themes for the day. Wade moderated the panel. “Although minorities for generations have earned less and 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 Wade.

Wade drew on data presented by the panel to note that homeowners have greater assets than do renters, and that over time their wealth builds. “Evidence shows that communities made up of homeowners have a better quality of life, the children receive a better education and children of parents who own a home are far more likely to own a home themselves in adulthood.” In addition, homeowners can pass their wealth on to future generations.

Among the panelists were: Ester Cadavid, vice president and chief development officer, Los Angeles Neighborhood Housing Services (NHS), and Askia Aquil, executive director, St. Petersburg NHS. Both represented NeighborWorks organizations and spoke about the difference homeownership has made in the lives of people served by these two organizations.

Cadavid pointed to counseling as one way to move people to become and stay homeowners, and in turn build wealth. Many people think they have to go to the subprime market where costs are higher. “But a lot of people who take sub-prime loans qualify for conventional loans,” she said.

Aquil spoke about life cycle counseling whereby homebuyers receive pre- and post-homeownership counseling. Panelists agreed that more recently, post-home purchase counseling has taken center stage as home prices rise to record levels and more of people’s income goes to housing. Cadavid noted that her organization has specialists who focus on coaching people after they have purchased a home.

Roundtable speaker Lee Higgins, applied research manager, NeighborWorks America, noted that NeighborWorks organizations build long-term relationships which contribute to preserving homeownership and building wealth. For instance, 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.

Also participating was Tom Shapiro, Pokross Professor of Law and Social Policy Brandeis University, who discussed his book “The Hidden Cost of Being African American.”

Shapiro took a civil rights perspective on the wealth and homeownership gap. “Closing the racial homeownership and wealth gaps need to be at the forefront of the civil rights movement in the 21st century,” said Shapiro in his remarks. He said the disparity in income and wealth between racial minorities and whites “is largely created by government policy and comes out of the marketplace.”

The following table offers an example of the financial value of the housing asset.

Median Net Wealth
	Owners	Renters
All Families	$171,800	$4,810
African-American	$69,000	$1,890
Hispanic	$70,000	$2,000
Annual Income
< $20,000	$70,100	$1,000
> $50,000	$238,500	$51,300
Source: Joint Center for Housing Studies: The Role of Housing as a Component of Wealth 2001

 

J. Philip Thompson, professor of Urban Politics; Massachusetts Institute of Technology discussed the impact of homeownership on the political process.

 

“To increase civil participation, you need to increase property ownership.”  Thompson added that studies show that 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.