The American Fantasy - Housing Week

ADDITIONAL CONTRIBUTORS Courtney Garcia

photo by BrendelSignature

The American dream is, and always has been, the conception of a white man. This notion of universal prosperity and success relies on the fact that all men are not only created equal, but treated equal; that we all are entitled to the same rights living under a red, white and blue-paneled roof. Such ideology continues to serve more as a figurative hope than pragmatic truth, however, and one need look no further than the housing market for evidence of the fallacy.

Among those supposed rights guaranteed to everyone in the U.S., few are as considered as fundamental as property – the right to own – and yet few are more limited. The nation was founded by men who took other men as property, and who denied those men the right to possess so much as their own lives. Even with forward advancements, the roots of this disparate flaw continue to manifest today.

Fair housing practices have historically been tied with the struggle for civil rights, and in a market dealt by the burden of inequity, nationwide economic downturn trickles down disproportionately. A study on increasing wealth divide released this year by the Pew Research Center shows “the median wealth of white households is 20 times that of black households and 18 times that of Hispanic households.” Additionally, the research offered the following statistics:

  • From 2005 to 2009, median wealth fell by 66% among Hispanic households and 53% among black households, compared with just 16% among white households.
  • A third of black (35%) and Hispanic (31%) households had zero or negative net worth in 2009, compared with 15% of white households.
  • From 2005 to 2009, the median level of home equity held by Hispanic homeowners declined by half—from $99,983 to $49,145—while the homeownership rate among Hispanics was also falling, from 51% to 47%.

Of course, the recession was not the cause of such wealth and class divide, rather it preyed on a legacy as old as the country itself. It appears the American Dream, if it could be realized as anything more, has never achieved its purpose in housing. Furthermore, immigrants who flock to this country with aspirations of life, liberty and happiness have presumably more limitations than freedoms, preventing them sometimes from receiving education that would allow them a means to achieve these affluent ends. Illegal immigrants predominately work low wage jobs and live in conditions with no hope of acquiring savings to purchase a home.

“Home ownership has been the center of wealth creation since America was conceived and rights were allocated based on land ownership,” observes Maya Smith, a law student and former Director of Violence Prevention for the City and County of San Francisco. “The Constitution only extended those rights to a few people so it is limited by design.”

The ropes to climb to buy a home are also skewed against minorities. A study done by New York University following the subprime mortgage crisis found that home buyers in predominantly black and Hispanic neighborhoods were more likely to get their mortgages from a subprime lender (higher interest rates and fees) than those in white neighborhoods. “It’s almost as if subprime lenders put a circle around neighborhoods of color and say, ‘This is where we’re going to do our thing,’” said Robert Stroup, a lawyer and director of the economic justice program at the NAACP Legal Defense and Educational Fund Inc., in an article from The New York Times.

This coupled with rising unemployment rates make blacks and Hispanics most vulnerable in times of economic collapse, and at greatest risk for loosing their most valuable asset – their homes. The American Dream, then, if it is to be rationally considered, extends only so far. Even those who don’t actually own a house face asymmetric misfortune in the market.

“The mortgage crisis helped bring down the cost of buying a house, but it simultaneously increased the cost of rents in urban markets and destabilized generational wealth especially among African Americans,” notes Smith. “The easy thing to do would be to relax credit lending requirements. The harder but more important thing to do is to create living wage jobs for people and undertake the hard tax code reforms that more equitably distribute the nation’s wealth.”

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