Housing Equality: Despite Dallas’ Diversity, Homeownership Gap Exists

While overall homeownership rates are shrinking, the decrease is far more pronounced for some minorities, especially black Americans. That’s the takeaway from a recent report from ApartmentList.

This racial divide underscores the increasing inequality that plagues the United States. By building equity, homeowners accumulate wealth, leading to the striking fact that the net worth of the average homeowner is 36 times more than that of the average renter. This makes it all the more troubling that minorities are less likely to own homes, particularly as their share of the population grows. The share of white households in the U.S. is currently 61.8 percent, down from 80.5 percent in 1980, and the Census Bureau projects that more than half of the American population will belong to a minority group by 2044.

In Dallas, one of the most diverse metropolitan areas in Dallas, the homeownership gap for minorities has decreased by 1.8 percent, but black Americans are still worse off than fellow ethnic minorities.

The ApartmentList study, which references Census data from 1980 to 2015, analyzed nationwide trends in homeownership, drilled down by race, education, and income and was limited to heads of household in prime employment years, ages 25 to 54. What it revealed was that, unsurprisingly, race continues to have far-reaching and devastating impacts on measures of economic success.

Dallas Underachieves in Narrowing the Homeownership Gap

What should sound like good news, isn’t necessarily. In diverse metro areas, for instance, data reveals smaller gaps in homeownership: the more diverse a city, the less severe the discrepancies. These slightly narrower gaps can be attributed, in part, to educational opportunities. Dallas, specifically, seems to follow that trend, though, perhaps not as clearly. Dallas checks in as the 8th most diverse metro area, yet it has the 17th smallest gap in homeownership. But note that the study highlighted gaps in metro areas as merely less severe. Even the smallest gaps represent significant disparity. The homeownership rate for white households in in Dallas remains more than double that of black households (64.1% for white households, compared to 30.4% for black households). More than double. And Dallas represents one of the smaller gaps in major metro areas.

The study also points out that this racial divide exists across all levels of educational attainment.

Regardless of Education or Income, Homeownership Eludes Minorities

How’s this for an unsettling statistic? Homeownership rates for minorities with college degrees are lower than those for whites with only a high school diploma.

Generally speaking, there are fewer homeownership opportunities for those without some higher education. The study cites a 15 percentage point gap between the homeownership rates for those with college degrees and those with a high school diploma. And while the job market is increasingly geared toward jobs requiring college educations, helping to explain the educational divide, it doesn’t explain the racial disparity here.  So what’s happening?

The “whys” behind the historical and growing inequity are numerous and complex, which is why it’s not surprising that the ApartmentList study does not go into them. It’s a discussion that requires in-depth history lessons and, frankly, open minds. And, lest you haven’t been paying attention to current events lately, discussions on race in the United States prove deeply uncomfortable. What the study does address, however, are recommendations for forward motion, for halting and reversing the disparity.

“…it’s increasingly important to prioritize policies aimed at promoting homeownership among minority and low-income Americans to lessen inequality. For example, an emphasis on increasing diversity and integration at the neighborhood level has been shown to benefit poor and minority households. There is also a strong need for increased construction of affordable entry-level homes across the country. As a step toward improved housing equality, lawmakers should also reconsider the mortgage interest tax deduction, which primarily benefits wealthy households. Recent research indicates that mortgage interest deductions may not even be effective in boosting homeownership.”

As disheartening as this study is, it comes as completely unsurprising. As far much progress as we think we have made, the truth is, we’re a far cry from any meaningful gains in housing equality. It’s imperative that we work toward more effective and inclusive tools for boosting homeownership for everyone.