Minority homeownership climbs across Portland metro but stalls within city limits
Minority homeownership climbs across Portland metro but stalls within city limits
Liz Baca’s first brush with homeownership turned into a nightmare.
Her husband, Greg, a third-generation Mexican American, had bought a home in Gresham in 2005, a fixer-upper that they poured hours of work into.
It seemed like the American Dream to Honduran-born Baca, 35, who arrived in the U.S. with her parents when she was 12.
But in 2008, as the housing market unraveled, their adjustable mortgage interest rate ballooned. Their monthly payments doubled to nearly $3,000 a month even as the house lost its value. Attempts to negotiate with their lender over the next two years went nowhere, and the house went from a point of pride to one of tension — a source of stress and the cause of arguments.
“We walked away because it was just becoming such a hardship to even be in the home,” Baca said. “It was becoming a toxic environment.”
The couple rented for the next six years, leaving Gresham for a small house in Tualatin. But two years ago, they once again bought their own house in the Washington County community.
The Bacas’ return to homeownership was part of a notable trend as the housing market recovered from its collapse during the recession and then boomed in the 2010s.
The homeownership rate among households led by people of color has surpassed the rate during the housing bubble-era high in the Portland metro area, new census data shows. It now sits at 51.3 percent. (That full recovery hasn’t been seen nationally, where homeownership rates still lag their bubble-era highs across the board.)
Hispanic or Latino households are fueling the local gains. No other major racial and ethnic group in the region has surpassed its bubble-era homeownership rate.
Minority groups — with the exception of Asian Americans, who have long had high homeownership rates — remain underrepresented in homeownership relative to their population in the metro area. A significant homeownership gap remains, with a 15 percentage point difference compared to the white homeownership rate of 66.3 percent.
But the comeback is all the more noteworthy for the toll the housing crash took on communities of color.
The homeownership increases are steeper in Clackamas and Clark counties, where homes remain relatively affordable.
Not so in Portland proper, where home prices have climbed most dramatically in recent years. While minority homeownership generally is increasing in the city, it remains well below its pre-recession peak in the more volatile market.
The shift from the city center to the suburbs could have major implications for a region struggling with housing affordability and accommodating density in its core.
For some homebuyers, it’s a matter of preference. But for many, it’s purely a matter of cost paired with a slim inventory of homes in Portland.
“Some of our communities of color would like to live in the city, but cost is a driving factor,” said Felicia Tripp, deputy director of the nonprofit Portland Housing Center, which helps first-time homebuyers through education and down-payment assistance.
“As long as we stay a high-cost market,” she said, “it’s going to be a struggle for us to get communities of color into homeownership."
Though the foreclosure crisis affected homeowners of all races, it hit people of color harder than white homeowners, regardless of income.
In metro Portland — which spans Clackamas, Columbia, Multnomah, Washington and Yamhill Counties in Oregon as well Clark and Skamania counties in Washington — the homeownership rate for minority households fell 9.5 percentage points, compared with 4.4 percentage points for white households.
Black and Hispanic families lost more wealth than white and Asian families, according to the Federal Reserve Bank of St. Louis, which delved into the effects of the housing crash across race and ethnicity in 2017. That’s in part because they had more of their wealth concentrated in real estate, the value of which plummeted as the housing bubble collapsed.
Black and Hispanic homebuyers were also more likely to have high-risk mortgages, even after controlling for creditworthiness, according to the National Bureau of Economic Research. This is in part because those communities were targeted by high-risk lenders and rebuffed by conventional lenders.
Given the toll of the foreclosure crisis, some people of color were slow to return to the housing market, said Tripp of the Portland Housing Center.
“Part of it was just overcoming that fear,” she said. “We’re really focused on letting those communities know it’s an option for you and a right for you — everyone deserves access to homeownership."
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Those ready to buy increasingly find themselves looking beyond the boundaries of the region’s largest city, where there are more homes to choose from at lower prices.
As recently as 2015, 25 percent Portland Housing Center’s clients bought homes outside the city. Today, it’s 45 percent, and the nonprofit has opened outposts in Washington and Clark counties to better assist those buyers.
It’s a reversal of historic trends, where wealthier white homebuyers tended toward suburban settings while poorer residents and minority groups clustered in the central city, said Lisa Bates, an associate professor of urban studies and planning at Portland State University.
Allowing communities of color access to higher-opportunity areas in the suburbs was a policy goal for many regions. But meanwhile, significant investment in the central cities had started to gentrify many neighborhoods, pushing home prices and rents higher.
The inverse, Bates said, could be just as bad. Economic displacement from the central city can fragment communities, increase commute costs and curb economic opportunities.
“It’s great for people to be able to find a place to buy a house, and it’s great for people to build communities where they live,” Bates said. “It’s also not good for people to get pushed out from the places where they have lived and want to live.”
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Hispanic and Latino homeownership bounced back from the recession faster than other minority groups, passing a 2008 high of 43 percent in the Portland metro to hit 45 percent last year.
The Bacas started looking for a home in 2016, when their landlord notified them that the rent would be increasing substantially after years of stability.
By that time, their fortunes had improved. Greg Baca’s electric business was thriving. Between that and Liz Baca’s work for a local health department, they had saved enough money to start looking for a home again.
By then, they’d fallen in love with Tualatin and began to look for a house in the city. They wanted to be conservative in price — staying well below the $400,000 they were preapproved for —and they were also looking for a place with room for Liz Baca’s mother, who would be moving in with them.
They worked with Gabriela Mann, a broker with PDX Property Group. Mann, who is Hispanic, speaks Spanish, which allowed Baca’s mother, who speaks limited English, to be involved in discussions about the house.
Many of Mann’s clients speak Spanish as a first language, and they represent a major portion of her business. And their needs are often different from her other clients. For example, many are looking for a home that can accommodate three generations.
“Now you have children who might be getting married, might have their own kids but also want to take care of their parents,” Mann said. “You have to find a much bigger square footage house so we can all live together. At the same time, they can combine the resources to buy the house.”
The Bacas ultimately bought a house on a Tualatin cul-de-sac, where, at the time, they were the only non-white homeowners. That’s changed – another Latino family moved in last year.
“It’s a growing community that’s becoming more diversified,” she said, “but we’re definitely still a minority.”
-- Elliot Njus
enjus@oregonian.com; 503-294-5034; @enjus
Source: https://www.oregonlive.com/business/2019/01/minority-homeownership-climbs-across-portland-metro-but-stalls-within-city-limits.html