DAVID J. HARRIS – Discouraging trend

Despite record numbers of homeowners across the country, a new study shows that lower-income families with children are less likely to own a home than they were in the late 1970s.

The study, released by the National Housing Conference’s Center for Housing Policy last week, shows that nearly 60 percent of low- to moderate-income working families owned homes in 2003, down from 62.5 percent in 1978. Meanwhile, nine out of every 10 upper-income families with children owned a home in 2003.

The study also highlighted some disparities between the homeownership rates of whites and minorities. Even though the homeownership rate for lower-income minority families remained about the same during that 25-year period, the homeownership rates of Hispanic, black and Asian working families with children trail that of whites by significant margins. More than 70 percent of white working families owned homes, compared to 44.6 percent of minority working families, in 2003.

The study defines working families with children as those earning at least $10,712 annually up to 120 percent of the local area median income, and having at least one child younger than 18 living in the home.

Eric Nakajima, senior research manager at the University of Massachusetts Donahue Institute, said incomes for working families and individuals with lower-skilled jobs aren’t going up as fast as the incomes of those with higher-skilled positions.

“Our economy is far more productive than it was 25 years ago,” Nakajima said. But incomes haven’t risen as much over the years, “particularly among lower-skilled workers,” he added.

And working families’ income is not keeping up with rising costs for housing and other necessities in some high-cost markets.

“It remains a significant challenge,” Nakajima said. “It’s particularly difficult in a region which has high housing costs and energy costs.”

The high cost of land in Connecticut is the beginning of a cycle that results in high housing costs, according to David Fink of the Hartford-based Partnership for Strong Communities. The high cost leaves developers with two options: build big, five-plus-bedroom homes to cover the cost of the land, or build densely. Most towns in Connecticut will not permit the latter, so big, new homes have become the norm, putting a strain on the supply of affordable housing in the state.

“It becomes entirely impossible for [low- to moderate-income] families to do it,” Fink said. “It’s strictly a factor of the cost of land.”

The Partnership for Strong Communities is pushing for fewer restrictions on dense building in the hope that such a change would allow more families to afford their own homes.

‘Obviously a Challenge’

In Greater Hartford, even school teachers, nurses and police officers struggle to afford a home.

The median price for a home in the Hartford area is $227,000, meaning that a household would need to earn $71,988 annually to qualify for a mortgage, with a 10 percent down payment, according to the latest information gathered by the National Housing Conference. That $70,000-plus salary is much higher than the median salary of elementary school teachers ($50,810), police officers ($49,187) and nurses ($39,031) in the Hartford area, according to NHC.

The data did not include information on more expensive parts of the state, such as Fairfield County.

Recent efforts by the nation’s leaders have focused on boosting homeownership, particularly for minorities. Lenders also have expanded mortgage credit to low-income borrowers over the last 10 to 15 years.

Nearly 70 percent of Americans now own their homes, according to U.S. Census data, and the majority of minorities in this country own their homes. President Bush has called for an increase in the number of minority homeowners by 5.5 million by the end of the decade.

In the Northeast, a third of lower-income minority families with children owned homes in 2003, up 5 percent from 1978.

“Though there’s obviously a challenge in terms of insuring that minority households participate in programs that are out there for homeownership opportunities, there’s some documented improvements that suggest some of the efforts that are ongoing are working,” Nakajima said.

But despite the gains in minority homeownership in the Northeast, the study shows that the disparity among the homeownership rates of minority families with children and their white counterparts grew the most in that region. Some 73 percent of lower-income white families owned homes in the Northeast, 40 percent more than minority families with similar incomes.

Nakajima said some of that has to do with history, including a pattern of lending discrimination that occurred 20 to 30 years ago and the gaps in earnings and employment between minorities and whites.

“There’s a historical challenge of income gaps and employment gaps between minority households and white households,” he said.

David J. Harris, executive director of the Fair Housing Center of Greater Boston, said it’s discouraging that the homeownership gap between whites and people of color is actually growing instead of getting smaller.

“It means that we all need to work together to redouble our efforts Â… to make sure we counter this national trend and find ways to increase homeownership, to narrow the gap,” said Harris.

Nationally, the minority homeownership rate in 2003 was highest for a category listed as Asians and other minorities at 53.6 percent, followed by blacks at 44.6 percent and Hispanics at 42.3 percent, according to the study.

Homeownership for working families was highest in the Midwest (67.7 percent), followed by the South (60 percent), the Northeast (58.8 percent) and the West (51.9 percent).

The study findings are troubling to researchers who contend that children living in owner-occupied homes perform better in school.

A key reason for the lagging homeownership rates, according to the Center for Housing Policy, is a change in household composition during the last 25 years. Some 36 percent of working families with children were single-parent households in 2003, compared to 18 percent in 1978.