Programs that help low-income and minority individuals and families purchase a home may be doing more harm than good, according to a Kansas State University economist.
When vulnerable homeowners don't get support after they purchase a home -- maybe one they really couldn't afford in the first place -- they're more likely to return to renting, said Tracy Turner, K-State assistant professor of economics. She and Marc Smith, professor of finance and director for the Institute of Housing Studies at DePaul University, are publishing their research in a forthcoming issue of the Journal of Regional Science.
"Moving vulnerable renters into homeownership without post-purchase support wastes tax dollars as well as creates great hardships for these new homeowners who lose their homes," Turner said. "Our research sheds light on homeowner sustainability and the need for post-purchase support for vulnerable households. It suggests that past homeownership policies are in part contributing to the current home foreclosure crisis."
Turner and Smith studied how populations with low homeownership rates also leave homeownership at high rates, either through foreclosure or selling the home. From 1970 to 2005, they found that low-income homeowners were consistently more likely to exit homeownership than higher income households. Hispanic households had higher exit rates before 1997 but not after.
They also found that a gap between blacks and whites exiting homeownership arose after 1997. Turner said this could be because policies in the 1990s that encouraged minority homeownership were not sustainable in the long term.
"Policy initiatives made resources available to move renters into owning although they could not own without assistance, and these initiatives failed to provide post-homeownership counseling or support," Turner said. "As a result, renters who became homeowners through relatively easy entry conditions could not sustain homeownership."
Turner said their research is the first to find that the homeownership gap before 1997 is because fewer blacks were becoming homeowners in the first place, not because they were leaving homeownership at higher rates.
Because homeownership offers many benefits, Turner said it is important to understand why black, Hispanic and low-income households are less likely to own their housing. As renters, they are missing out on the benefits homeownership can provide.
"In order to design policies that will allow underrepresented groups to attain homeownership and remain homeowners, we need to understand why certain groups have lower homeownership rates to begin with," she said.
An important area of future research, Turner said, would be to look at how much of the foreclosure crisis is attributed to these types of policies versus how much of it is because of liberalized lending standards, predatory lending and house-price declines.
Tracy Turner | EurekAlert!
Microtechnology industry is hiring – positive developments of past years continue
09.04.2018 | IVAM Fachverband für Mikrotechnik
RWI/ISL-Container Throughput Index with minor decline on a high overall level
20.03.2018 | RWI – Leibniz-Institut für Wirtschaftsforschung
In a recent publication in the renowned journal Optica, scientists of Leibniz-Institute of Photonic Technology (Leibniz IPHT) in Jena showed that they can accurately control the optical properties of liquid-core fiber lasers and therefore their spectral band width by temperature and pressure tuning.
Already last year, the researchers provided experimental proof of a new dynamic of hybrid solitons– temporally and spectrally stationary light waves resulting...
Scientists from the University of Freiburg and the University of Basel identified a master regulator for bone regeneration. Prasad Shastri, Professor of...
Moving into its fourth decade, AchemAsia is setting out for new horizons: The International Expo and Innovation Forum for Sustainable Chemical Production will take place from 21-23 May 2019 in Shanghai, China. With an updated event profile, the eleventh edition focusses on topics that are especially relevant for the Chinese process industry, putting a strong emphasis on sustainability and innovation.
Founded in 1989 as a spin-off of ACHEMA to cater to the needs of China’s then developing industry, AchemAsia has since grown into a platform where the latest...
The BMBF-funded OWICELLS project was successfully completed with a final presentation at the BMW plant in Munich. The presentation demonstrated a Li-Fi communication with a mobile robot, while the robot carried out usual production processes (welding, moving and testing parts) in a 5x5m² production cell. The robust, optical wireless transmission is based on spatial diversity; in other words, data is sent and received simultaneously by several LEDs and several photodiodes. The system can transmit data at more than 100 Mbit/s and five milliseconds latency.
Modern production technologies in the automobile industry must become more flexible in order to fulfil individual customer requirements.
An international team of scientists has discovered a new way to transfer image information through multimodal fibers with almost no distortion - even if the fiber is bent. The results of the study, to which scientist from the Leibniz-Institute of Photonic Technology Jena (Leibniz IPHT) contributed, were published on 6thJune in the highly-cited journal Physical Review Letters.
Endoscopes allow doctors to see into a patient’s body like through a keyhole. Typically, the images are transmitted via a bundle of several hundreds of optical...
13.06.2018 | Event News
08.06.2018 | Event News
05.06.2018 | Event News
21.06.2018 | Earth Sciences
21.06.2018 | Life Sciences
21.06.2018 | Earth Sciences