Housing Recovery Missing in Many Communities of Color
By Donald Phoenix, Regional Vice President, NeighborWorks® America
By most indicators America’s housing-market recovery appears to be in full swing. U.S. housing starts rose to a near eight-year high in July as builders ramped up construction of single-family homes. The U.S Commerce Department said that permits to build new houses rose to 30% in June, and groundbreakings on new homes surged 26.6% compared to one year ago. Add to this that mortgage rates continue to be near all-time lows, now must be a golden age for homeownership.
By other measures, however, this golden age appears to be nothing but a mirage. Many community development professionals involved in homeownership are looking at another set of data that tells a very different story. Homeownership rates have plummeted from 69.1% in 2005, to 63.7 %, with the largest drop among blacks. And, far too many Americans are still living in homes that are underwater. Seven point one million homes or 13.2% of all properties are seriously underwater meaning that loans exceeded property values by at least 25% (RealtyTrac). Underwater homeowners have negative equity and are significantly more likely to default on their mortgages than homeowners with positive equity.
Some of the hardest hit metropolitan areas in the U.S. include Atlanta – GA and Miami – FL where 35% and 27% of the home owners respectively are underwater (Hass Report). Dig a little deeper and the data become even more alarming for communities of color. Between 2005 and 2009, African Americans and Latinos experienced a decline in household wealth of 52 percent and 66 percent, respectively, compared to 16 percent for whites.
If the trend for minority homeownership and wealth doesn’t reverse, the housing market will stall. Here’s why. It’s projected that by 2025, minorities will make up 36 percent of all U.S. households and 46 percent of those aged 25-34 – when first homes are usually purchased. When nearly half of the source of new homebuyers is traditionally under-served by the market, the market players – lenders, builders and nonprofit community developers – have to find new ways to make these groups successful, long-term homeowners.
Consider these two examples of nonprofit community developers who are executing new techniques and strategies to provide much needed support to stabilize communities and prepare the next generation for responsible homeownership.
Atlanta Neighborhood Development Partnership (ANDP) in Atlanta, GA is working with neighborhood leaders from six communities impacted heavily by the foreclosure crisis and lingering negative equity issues. Their goal is to educate and train neighborhood leaders on strategies to help neighborhood homeowners take advantage of existing programs to modify mortgages, focus on community-wide neighborhood improvements, and market and brand their communities to increase buyer demand.
Meanwhile, Neighborhood Housing Services of South Florida (NHSSF) is accelerating their efforts to improve Miami-Dade County’s 79th Street Corridor area, an area suffering from years of disinvestment, made worse by the deep economic recession and foreclosure crisis. This ambitious initiative aims to create a cohesive neighborhood with better access to transit that connects residents to jobs, retail, and needed services.
Both organizations are members the NeighborWorks network, a nation-wide network of 252 trained and certified community development organizations at work in nearly 4,000 communities across America. NeighborWorks organizations support people with modest incomes, among whom minorities are over-represented. In fiscal year 2014 (ending in September), the network rented affordable housing to more than 33,000 black families and more than 35,000 households headed by Hispanics. They also helped almost 4,300 blacks and more than 4,000 Hispanics become homeowners.
These numbers are just the tip of the iceberg of opportunity. More needs to be done to go deeper than the surface statistics of a rebounding housing market and create real opportunities for a broad-based resurgence in homeownership.
About NeighborWorks® America
For more than 35 years, NeighborWorks America has created opportunities for people to improve their lives and strengthen their communities by providing access to homeownership and to safe and affordable rental housing. In the last five years, NeighborWorks organizations have generated more than $24.5 billion in reinvestment in these communities. NeighborWorks America is the nation’s leading trainer of community development and affordable housing professionals. For more information visit www.nw.org
About Donald Phoenix
As vice president of NeighborWorks’ Southern Region, Phoenix is responsible for overseeing financial and technical services for network organizations throughout a 12-state region, including Virginia, North Carolina, West Virginia, Tennessee, Kentucky, Georgia, Florida, South Carolina, Mississippi, Alabama, Arkansas and Louisiana. He also leads the organization’s Gulf Coast rebuilding efforts in the wake of hurricanes Katrina and Rita.
Phoenix is a founding member of the Georgia State Trade Association of Nonprofit Developers, a member of Georgia ACT, the Partnership for Southern Equity, Emory University’s board of visitors, past chair of the Federal Home Loan Banks’ advisory council and several other community development organizations. (picture in attached staff profile)