Homeownership is the key ingredient of vibrant communities where engaged citizens, caring neighbors, thriving schools and healthy people come together. — Minnesota Homeownership Center
Minnesota consistently has one of the highest homeownership rates in the nation. Households of Color, however, are much less likely than white households to own their homes. This difference, known as the homeownership gap, has many causes, including disparities in income, access to credit, and racism. — Minnesota Compass
In June of 2004, the State of Minnesota officially kicked off its Emerging Markets Homeownership Initiative (EMHI) at a public gathering in St. Paul. Featuring a keynote address by Richard M. Todd, vice president of the Federal Reserve Bank of Minneapolis, this event presented the EMHI’s goal to “significantly and dramatically” increase the number of “emerging market” homeowners in Minnesota by the year 2012.
An emerging market was defined by the EMHI as a “household not headed by non-Hispanic whites.”
At that time, Minnesota boasted the highest homeownership rate of all 50 states at 77 percent. By contrast, however, homeownership among Minnesota households of color in 2004 was only 41 percent, nearly 10 percent lower than the national homeownership rate among people of color or “emerging markets.”
Despite the best of intentions, due diligence and planning, the EMHI’s efforts were essentially derailed by the Great Recession and associated foreclosure crisis that swept across the nation beginning in late 2007. In the Twin Cities, the foreclosure epidemic cut across racial, socio-economic and geographic lines, but was still especially hard on homeowners in neighborhoods such as north Minneapolis and on St. Paul’s east side.
In fact today, of the 60 cities in the metro area with a population of at least 10,000, St. Paul and Minneapolis rank 58th and 59th in homeownership rates and are two of only three cities with a homeownership rate of under 50 percent.
The Minnesota Homeownership Center, which absorbed the EMHI and its activities in 2009, has been instrumental in helping many families avoid foreclosure in recent years. Still, an exorbitant amount of damage had been done to Minnesota homeowners with well over 100,000 households being foreclosed on from 2007 to 2013.
As of 2014, many financial experts suggest that the worst of the foreclosure crisis is over and housing markets are starting to recover. This would particularly seem to be the case in Minnesota, where the homeownership rate is again ranked at or near the top of all 50 states over the last few years.
And according to a report from the Terner Center for Housing Innovation at the University of California, Berkeley, the Twin Cities metro currently has the highest homeownership rate among large U.S. metropolitan areas at 70 percent. Analysts suggest that this is particularly impressive when considering the median home price in the Twin Cities is approximately $220,000.
Yet again, however, the Twin Cities’ lofty status when it comes to homeownership rates is severely tempered when considering its homeownership gap, which measures the homeownership rate of White households as compared to households of color. According to the U.S. Census Bureau, the Twin Cities metro currently has the highest homeownership gap of the 25 largest metropolitan areas in America at 36.5 percent.
When compared directly to other metros, the Twin Cities homeownership gap is six percent greater than Detroit’s, more than 10 percent greater than areas such as Chicago and Tampa, and more than twice that of the metros of San Francisco and San Antonio.
In comparing the homeownership gap between detailed racial and ethnic groups in the Twin Cities, the numbers are even more absurd. According to Minnesota Compass, the homeownership gap between Whites and African Americans in the metro is more than 53 percent. For Black foreign-born households the homeownership gap is 52 percent, while the gaps for Hispanic and Native American households come in at 39 percent and 37 percent respectively.
So, as seems to be commonplace, Minnesota scores extremely high in a critical quality of life measure, only to fare correspondingly poor relative to its citizens of color. As is the case with other racial disparities in the Twin Cities, efforts are being undertaken to address these issues. Nevertheless, similar endeavors have been initiated in the past to seemingly no avail.
When it comes to these issues, we are well beyond the point of having declared an emergency. What is now required is an authentic and resolute response befitting an emergency.
In speaking directly to the homeownership crisis in our midst, Warren Hanson, president and CEO of the Greater Minnesota Housing Fund, states that “If we are going to have any effect on reduction of poverty for future generations, we have to help remedy things like wealth creation in the form of homeownership, and this is one time when extra efforts are needed to correct a wrong, to improve equity in every sense of the word.”
Clarence Hightower is the executive director of Community Action Partnership of Ramsey & Washington Counties. Dr. Hightower holds a Ph.D. in urban higher education from Jackson State University. He welcomes reader responses to 450 Syndicate Street North, St. Paul, MN 55104.