Study: Race, ethnicity impact wealth in metro Miami area
According to a new study based on Census data, Miami has lower home ownership than Los Angeles or Washington, D.C. And that affects overall family wealth.
05/19/2014 7:52 PM
05/19/2014 9:15 PM
The Miami metro area reported lower home ownership rates than Los Angeles, Washington, D.C., and Tulsa, Oklahoma, according to a report exploring the racial wealth gap that was released Monday.
The study, by two nonprofits aimed at promoting social justice, found that the Miami metro area had the lowest home ownership rate, and that home ownership was most closely correlated to racial and ethnic groups in the four cities. About two-thirds of whites, Cubans and Caribbean black families owned their homes, while only 50 percent of African Americans and those of South American and Puerto Rican descent owned their homes.
The report was no surprise to Yanick Jean-Francois Landess, a Haitian single mother of two, who has rented since 1999 in Miami Shores, North Miami and Miami. Fifteen years and $200,000 in rent payments later, Landess said ignorance kept her from buying a home.
“I had no idea there was another way, a better way, to save money, to live better,” she said.
Now she’s seeking to buy and build wealth for her family over time.
“The money saved because you reduced your housing payments will go to the education of your children, to home improvements, to the acquisition of more assets,” she said. “You will secure funds for your retirement.”
According to the report, “Beyond Broke: Why Closing the Racial Wealth Gap Is a Priority for National Economic Security,” the real estate crisis struck Hispanics far more severely than it did other groups in the study. Hispanics lost 56 percent of their homes’ value, African Americans suffered a 36 percent decline and whites lost 32 percent of their value. All findings were based on U.S. Census data.
In metro Miami, the report found about 35 percent of local residents have no liquid assets, such as cash and stocks. And a full 70 percent have no significant retirement savings.
Hispanics fared better than the overall Miami population, with 80 percent reporting holding financial assets and retirement savings. About 36 percent of Hispanics said they had retirement savings. Caribbean and Haitian blacks in Miami fared somewhat better than African Americans.
In the four cities overall, as of 2011, African Americans had a median liquid wealth of $200, compared to $23,000 held by whites and $19,500 held by Asians. Hispanics in the four cities had $340. Whites had a median net worth more than 15 times that of blacks and over 13 times that of Hispanics.
Lionel Lightbourne, a community outreach coordinator for the Belafonte Talcolcy Center in Liberty City, a nonprofit youth service agency, said most families he works with are making just enough to pay rent.
“They are in survival mode,” he said. “If you have a survival mentality it’s hard to fathom success.”
The study was conducted by the Center for Global Policy Solutions and the Duke Research Network on Racial and Ethnic InEquality.
The findings were based on 2005, 2009 and 2011 data from the Survey of Income and Program Participation administered by the U.S. Census Bureau as well as 2013 National Assets Scorecard and Communities of Color data.
Darrick Hamilton, co-author of the report, said four cities were chosen to gain wide geographical representation and provide ethnic variation. The report focused on wealth rather than income, he said, and found that the primary source of wealth in most families comes from family members.
“We have to go to more asset development so that families can have freedom and live up to their potential,” he said. “Sustenance only allows you to stay afloat.”
Lightbourne agreed that currently, many African-Americans families don’t get enough in inheritance, compared to white families, to purchase assets like a house or a business.
“They are born into a deficit,” Lightbourne said.
Among the report’s suggested policies is that government set up child trust accounts at birth that can provide the seed money to purchase assets when the child comes of age. The report also recommends forming a National Investment Employment Corps to focus on job opportunities tailored to the country’s infrastructure needs, improving housing policies and broadening fair financial services.
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