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Competing Government Policies Both Promote and Deny Homeownership Opportunities for Minorities
It's three steps forward, but two steps back. Policies removing barriers to minority homeownership are favored by governments, but the competing objective of combating the perceived threat of urban sprawl by some of these governments is simultaneously restricting homeownership opportunities for people of color.
More than 70 million American families own their own homes. Of that number, 6.1 million families are African-American, 4.2 million are Hispanic and 2.2 million are Asian-American. African-American homeownership is at 47 percent. Financial institutions such as Fannie Mae advertise their commitment to raising the level of black homeownership, and it is one of many sponsors of the Congressional Black Caucus Foundation's (CBCF) "With Ownership, Wealth" initiative seeking to help one million more African-Americans become homeowners by 2005.
Homeownership increases prosperity. As the CBCF's web site points out: "Homeownership provides wealth and economic security for families... One-half of all homeowners in the U.S. hold at least 50 percent of their net worth in home equity. For African-American families (specifically the elderly), other minorities and low-income, it is 60 percent."
To protect and promote homeownership among minorities, low-income citizens and the elderly, governments are seeking to prohibit "predatory lending." This is when financial institutions attach high fees, large end-of-loan "balloon payments" and other rules that essentially rob people of their home equity. According to the Coalition for Responsible Lending, a local organization fighting predatory lending in North Carolina, such practices are expected to rob North Carolinians of approximately $1 billion over the next few years.
Federal agencies such as the Department of Housing and Urban Development (HUD) and Federal Trade Commission are considering recommendations to prevent the spread of predatory lending. Various prohibitions have already been enacted in places like North Carolina and Washington, DC.
With the government on the alert about predatory lending, it's perplexing that some of these same governments are promoting policies restricting homeownership opportunities.
"Smart growth" policies enacted to curtail urban sprawl prevent the construction of new housing and business developments in metropolitan areas. These business restrictions negatively effect job creation and the generation of new tax revenue, while also creating less opportunity for homeownership. In the case of minorities climbing the socioeconomic ladder, this situation creates a barrier from moving out of the cities to the suburbs. It keeps others from finding a place to live, period. It's a new, albeit unintentional, segregation.
Portland, Oregon provides a baseline for smart growth since it has the strongest anti-sprawl policies in America. Applying Portland standards to the more minority-populated Atlanta, Georgia Public Policy Foundation senior fellow Wendell Cox found that "if Portland trends had applied to Atlanta from 1990 to 2000, 25,000 fewer African-American households would own homes, and 3,400 fewer Hispanic households." Cox noted, "Because minorities have generally lower incomes and are entering the home ownership market at greater rates, any policy, such as smart growth, that reduces housing affordability will especially disadvantage minorities."
In the suburbs of Washington, DC, neighboring counties are setting aside tens of thousands of acres for rural preservation. In Fairfax County, the majority of land available for housing is restricted to homes on lots of a half-acre or larger. With 412,000 new jobs and only 204,000 new dwellings created in the past decade, housing availability and pricing is rising astronomically - forcing some families to live together or seek public housing assistance.
Susan M. Wachter, a former HUD official who now teaches real estate at the Wharton School, told the Washington Post: "One of the reasons that housing prices are rising so fast is that land-use controls are more pervasive in their impact than before. They restrict the supply of housing." Housing advocate Marlene Blum adds, "Many of the more affluent people who go to McDonald's don't necessarily stop to wonder, 'How do these people afford to live?'"
Smart growth remains popular with those who already have their piece of the American Dream, but it is clear such policies are unfair to everyone else. While governments are admirably vigilant against unfair lenders, those same governments must also be rational enough to avoid land-use policies that cause families - especially minority and low-income families - difficulty in qualifying for home loans in the first place.
by David Almasi. David W. Almasi is the executive director of The National Center for Public Policy Research
Supposedly worried that environmental groups were not consulted when the Bush administration developed its energy plan, the Natural Resources Defense Council (NRDC) filed a lawsuit to force the Department of Energy (DOE) to release documents revealing the names of consulted organizations. However, according to a series of articles in the Washington Times by Patrice Hill, a letter from the DOE to the General Accounting Office shows that the DOE did seek advice from many environmental groups, including NRDC. Some environmental groups declined to provide advice to the administration. The Times also reported that the NRDC initially did not return phone calls and messages from DOE, and later simply referred DOE to a pre-existing document they had released.
NRDC's accusations are another attempt to wrongly make it appear that the Bush administration has an anti-environmental agenda. The NRDC criticized the Bush administration for allegedly adhering to industry proposals while not consulting with environmental groups. However, when the administration asked environmental groups for advice, many were unenthusiastic about providing counsel. The environmental movement is attempting to diminish the administration's ability to protect the environment while criticizing it for a supposed lack of success.
According to the Washington Times, the Bush administration asked for input from environmental groups such as NRDC, Greenpeace, the Sierra Club and others when formulating energy policy. Reports that the administration is solely adhering to industry ideas are false. According to the Times, the American Petroleum Institute made 25 recommendations to be included in the administration's plan, only four of which were adopted. Similarly, the National Mining Association had only two of its 20 recommendations included in the energy plan. Environmentalists fared far better: The administration adopted nearly half of the 17 recommendations in NRDC's report.
by Chris Burger. Christopher Burger is Program Coordinator John P. McGovern, MD Center for Environmental and Regulatory Affairs, The National Center for Public Policy Research