Impact Of California’s Housing Crisis On Latinos.

In its newest study, the Tomas Rivera Policy Institute (TRPI) finds that California’s housing crisis hits Latino families particularly hard. The study includes policy recommendations to help accommodate the housing needs for the projected growth of the state’s Latino population — an additional 7.2 million individuals by 2020.

The housing supply shortfall and resulting affordability crisis is having a disproportionately negative impact on California Latino families. “The dream of homeownership for tens of thousands of Latino families in California disappears every year as the state’s housing crisis worsens. This important study by TRPI can serve as a road map to develop a comprehensive policy so the housing we need will get built. All Californians deserve to have their dreams come true,” said Lieutenant Governor Cruz Bustamante.

Homeownership is often considered the first step to wealth creation for a family. “Most Americans’ wealth is in the equity of their home,” said Dr. Harry Pachon, President of TRPI. “Thus, the lack of affordable housing for the Latino family has long-term consequences for the Hispanic community at large.”

Only 29% of Latino households could afford a median priced home in California in 1999, 8% lower than the statewide affordability rate of 37% for all households during the same period. Latinos lag 21% behind whites in homeownership. Statewide, only 44% of Latinos are homeowners as compared to 65% of whites.

And, according to data collected of Southern California families, Latinos were more likely than all other races combined to spend more than 50% of their annual income on housing costs.

The prime reason is a chronic imbalance between supply and demand that is more acute in the regions where Latinos live — primarily the greater Los Angeles area (where nearly 40% of all California Latinos reside) and in urban markets. In these markets, increases in housing prices far exceed that of incomes, particularly for Latino families.

Oftentimes, higher home prices and rents also prevent families from moving to escape overcrowded conditions, inadequate housing or neighborhoods besieged with crime. In Los Angeles County, 13.5% of Latino renters and 5% of homeowners said that they are so bothered by crime in their neighborhood that they would like to move.

“(The) Latino community is especially hard hit by the state’s escalating housing crisis. It is not just the cost of housing, but there are also quality of life issues involved like school quality, public safety and access to jobs,” said Jack Kyser, Chief Economist of the Los Angeles Economic Development Corporation.

The study found for many Latinos, especially immigrants, owning real estate is highly preferred to stocks or other financial investments. As California’s fastest growing population, Latinos are willing homebuyers and can add considerable benefit to the economy. During the past decade, Latino share of owner-occupied units rose from 13% to 17% — a trend that is likely to continue if housing supply is available.

Because of their lower purchasing power, regulatory or legislative hurdles that reduce housing supply and/or increase home costs particularly impact Latino households. Based on 1999 data, even a 5% increase in the median home price of a detached single family home can lock out as many as 44,833 California Latino households out of the market.

The TRPI researchers made recommendations in the study on ways to bridge the gap of affordable and available housing:

— Have public and private sectors work together to find alternative funding for urban public services (e.g., schools, roads, water and sewer treatment).

— Eliminate the fiscal disincentives that discourage municipalities from approving residential development in favor of commercial development.

— Create local housing trust funds.

— Establish and expand tax credit programs for low and moderate-income families seeking to buy their first home.

— Encourage local governments through the use of rewards and penalties to allocate sufficient land to meet housing needs.

— Reform zoning, ordinances, residential density restrictions and urban growth boundaries to respond to market needs.

— Enact reforms to safeguard the construction of affordable housing against unreasonable and extreme challenges by “Not in my backyard” groups.

Founded in 1985, the Tomas Rivera Policy Institute (TRPI) is an objective research organization addressing issues affecting Latino communities around the United States. These issues include, but are not limited to, information technology, voter turnout, healthcare, changing demographics, and language barriers.

For more information at http://www.trpi.org