Impacts of housing and mortgage market discrimination racial and ethnic disparities in homeownership

Abstract

There are persistent differences in homeownership rates across racial and ethnic groups. Homeownership rates for whites are over 20 percentage points higher than for blacks or Hispanics. This paper uses a model of the housing tenure decision to gain a better understanding of these racial and ethnic differentials in homeownership and employs a decomposition technique that has been applied to labor market discrimination to report the results of the empirical testing of two hypotheses: (1) race (ethnicity) influences the probability of ownership through differences in household endowments (income, education, age, gender, and family type) and market endowments (price and location); and (2) race (ethnicity) directly influences the probability of ownership through racial or ethnic discrimination and other factors that may be correlated with race or ethnicity.

We find endowment effects important in explaining the persistent racial and ethnic disparities in homeownership. In brief, logit analysis of 1989 American Housing Survey (AHS) national sample data reveals that 81 percent (78 percent) of the differences between the predicted probability of ownership between black and white households (Hispanic/non‐Hispanic) are due to differences in group endowments. Direct effects explain 19 percent of the black‐white differentials and 22 percent of the Hispanic/non‐Hispanic differentials. Because the direct effects are modeled as residual differences, it must be realized that the residual components could also be capturing the influence of important omitted or harder to measure variables internal to the market process and correlated with race or ethnicity. These include wealth, household location, employment history, credit history, and cultural predisposition toward homeownership.     

The reverse mortgage as an asset management tool

Abstract

Reverse mortgages are usually seen as a vehicle for increasing the income of poor, elderly households. This perspective, coupled with the relatively slow growth of reverse mortgage programs, has led some observers to question the growth potential of the reverse mortgage market. This article presents a more expansive view of reverse mortgages as a financial tool for tapping housing equity for various purposes and at various stages in the life cycle.

Three market segments for reverse mortgages are discussed: elderly persons living alone, other elderly households, and non‐elderly households. Potential uses include turning housing equity into personal human capital investment accounts, enabling children to provide care for their disabled parents, funding elderly households’ long‐term care insurance, and sustaining consumption. Recent progress in product development and availability and political pressures to find private financing for health and long‐term care suggest that the reverse mortgage market has considerable growth potential.     

The Low‐Income Housing Tax Credit An Analysis of the First Ten Years

Abstract

The Low‐Income Housing Tax Credit (LIHTC) has been the de facto federal rental housing production program since its creation in the Tax Reform Act of 1986. In this article, using a detailed database on 2,554 LIHTC projects, we analyze the costs of building these projects, where they are built, their financial viability, whom they serve, who finances them, and the size of the subsidies provided to them.

The LIHTC is a flexible program that has built different types of housing in various markets. While LIHTC projects serve low‐ and moderate‐income households, their rents are beyond the reach of many poor households without additional subsidy. Revenues just cover costs for many LIHTC projects. Over time, considerably more of each tax‐credit dollar has ended up in the projects, and returns to equity investors have dropped significantly, perhaps reflecting an increased understanding of project risks. We estimate that LIHTC projects developed by nonprofits are 20.3 percent more expensive than those developed by for‐profits.     

‘Empty,Swept and Garnished’: the Public Finance Initiative case of Throckley Middle School

As spaces of complex layering of multiple relations, each with their own space–time dynamics and reach, policies of urban governance and their tangible outcomes can be materially experienced as conjunctions of multiple meshworks of assemblages with different scopes and different systems of values. This paper investigates a case example of a Private Finance Initiative for the construction of Throckley Middle School in Newcastle upon Tyne. Completed in 2003, Throckley school closed in 2005. A Deleuzean-inspired tracing of several Throckley assemblages is presented and the paper concludes by discussing the challenges of adopting a Deleuzean perspective for analysis of urban governance and infrastructure development.     

Book reviews

Par le Peuple, Pour le Peuple: le populisme et les démocraties. By Yves Mény and Yves Surel. Paris: Editions Fayard 2000. Pp.312 + biblio. FF140 (paper) ISBN 2–213–60077–5.

I Confini dell'Odio: il nacionalismo etnico e la nuova destra europea. By Bruno Luvera’. Roma: Editori Riuniti, 1999. Pp.xiii + 151, index, biblio. 10 euros (paper) ISBN 88–359–4760‐X.

Il Dottor H.: Haider e la nuova destra europea. By Bruno Luvera’. Roma: Einaudi 2000. Pp.194 + biblio. 10 euros (paper), ISBN 88–06–15597–0.

A Virtuous Circle. Political Communications in Postindustrial Societies. By Pippa Norris. New York: Cambridge University Press 2000. Pp.xvii + 398, 54 tables, 38 figures, biblio, index. £40 (cloth) ISBN 0–521–79015–8; £14.95 (paper) ISBN 0–521–79364–5.

Democracy and the Media: A Comparative Perspective. Edited by R. Gunther and A. Mughan. Cambridge: Cambridge University Press 2000. Pp.496. £55 (cloth) ISBN 0–521–77180–3; £19.95 (paper) ISBN 0–521–77743–7.

Coalition Governments in Western Europe. Edited by Wolfgang C. Müller and Kaare Str?m. Oxford: Oxford University Press 2000. Pp.xvi + 602, biblio, index. £55 (cloth) ISBN 0–19–829760–2.

The Political Mobilization of the European Left, 1860–1980: The Class Cleavage. By Stefano Bartolini. Cambridge: Cambridge University Press 2000. Pp.xxiv + 637, 100 tables, 41 figures, biblio, index. £45 (cloth) ISBN 0–521–65021–6.

Social Democracy and the Challenge of European Union. By Robert Ladrech. London: Lynne Rienner 2000. Pp.xiv + 165, biblio, index. £37.50 (cloth) ISBN 1–55587–902–0.

Europe in Change ‐ Committee Governance in the European Union. Edited by Thomas Christiansen and Emil Kirchner. Manchester: Manchester University Press 2000. Pp.199. £40 (cloth) ISBN 0–7190–5552–0.

Rethinking European Order: West European Responses, 1989–97. Edited by Robin Niblett and William Wallace. Basingstoke: Palgrave 2001. Pp.xiv + 298, 2 maps, index. £50 (cloth) ISBN 0–333–91571–2.

Franco‐German Relations. By Alistair Cole. Edinburgh: Pearson 2001. Pp.178, biblio, index. £14.99 (paper) ISBN 0–582–31997–8.

Environmental Transitions: Transformation and Ecological Defence in Central and Eastern Europe. Edited by P. Pavlínek and J. Pickles. London: Routledge 2000. Pp.xxii + 362, 22 plates, 39 figures, 19 maps, 56 tables, biblio, index. £70.26 (cloth) ISBN 0–415–16268–8; £22.99 (paper) ISBN 0–415–16269–6.

Ethnicity and Globalization. By Stephen Castles. London: Sage 2000. Pp.xii + 228, biblio, index. £47.50 (cloth) ISBN 0–7619–5611–5; £16.99 (paper) ISBN 0–7619–5612–3.

A Not‐So‐Dismal Science: A Broader View of Economies and Societies. Edited by M. Olson and S. Kakhonen. Oxford: Oxford University Press 2000. Pp.x + 274, biblio, index. £14.99 (paper) ISBN 0–19–829490–5.     

PLANNING AND PARTICIPATION IN CITIES THAT MOVE: IDENTIFYING OBSTACLES TO MUNICIPAL MOBILITY MANAGEMENT

The dual processes of rapidly transforming cities and administrative decentralisation demands that local government address human mobility as a means of countering urban poverty. Despite this imperative, local authorities are often poorly equipped to address the needs of poor and transient residents. Through an examination of four South African municipalities, this article helps to identify three critical factors working against effective responses: poor data and conceptual bias; institutional ambiguities and budgeting processes; and, ironically, participatory planning. Although any one of these could serve as a basis for an article, by taking them together, we better summarise the challenges' scope and outline areas for further research and policy intervention. The article concludes by considering these findings' practical and scholarly implications. Copyright © 2013 John Wiley & Sons, Ltd.