Twin Cities has nation’s highest racial gap for homeowners
MINNEAPOLIS (AP) — The Twin Cities metro area has the nation’s highest racial gap when it comes to homeownership, largely because investors have been purchasing hundreds of single-family homes and turning them into rentals, therefore eliminating options for potential home buyers in some areas, according to a report by the Urban Institute.
The research found roughly one-fifth of Black households own their homes, compared with nearly three-quarters of white households. The Latino homeownership rate of about 35% also remained constant; researchers didn’t measure Asian and Native American homeownership due to inadequate data.
“Unless there are policies intended at trying to get people of color and low- and moderate- income people into homeownership, investors will continue to buy property,” said Yonah Freemark, senior research associate at the Urban Institute, a Washington D.C.-based liberal-leaning nonprofit that partnered with several Twin Cities researchers and funders. “Tracking that trend while making sure that renters are treated well has got to be a priority.”
The Star Tribune reported that the Black homeownership rate in Hennepin and Ramsey counties fell 10 percentage points between 2000 and 2018, while homeownership rates for whites stayed relatively constant, according to the researchers’ analysis of property records and census data.
The researchers said the decline in homeownership, especially in some of the most racially diverse and economically challenged neighborhoods, meant that more Black families became renters and fewer were able to build wealth through homeownership.
Many of the houses that were once affordable to those buyers have been siphoned off by large, out-of-town investors who now own 48,000 single-family rentals in Hennepin and Ramsey counties. That’s twice as many as in 2005.
“Housing has been treated as a commodity,” said Marcus Owens, executive director of the St. Louis Park-based African American Leadership Forum. “It’s been such a huge part of the infrastructure of our society that when you don’t have equity in homeownership you’re not going to get equity in many of the other aspects of life — health, employment, entrepreneurship, safety, education.”
Lilricka Barber rents a townhouse in Burnsville for herself and her 11-year-old son. After three years of improving her credit score and saving money for a down payment on her first house, she was pre-approved to buy a $260,000 house. But after looking at roughly 75 houses and getting outbid by up to $50,000, she put the house hunt on hold.
“I’m tired and fatigued,” said Barber, who works full time and is pursuing a bachelor’s degree. “I am determined to own a home. And it’s definitely something I want for my children, to be able to pass something down to them.”