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Blacks fall behind in home buying

Hispanics, others post gains in Portland homeownership
by: L.E. BASKOW Annette Steele cuddles with great-granddaughter Heavenly at her Northeast Portland home. Steele lost title to her longtime home in a 2010 foreclosure, after she was talked into an expensive subprime loan. She paid three loan modification companies to help rework the loan, but they all took her money without helping her. Steele remains in the home and hopes to go to court to regain legal ownership.

Fewer black families are enjoying the American Dream of home ownership in Portland.

New U.S. Census figures show that the homeownership rate for Portland blacks plummeted in the 2000s, even falling below 1990 levels.

Experts blame high joblessness, unscrupulous mortgage lenders and gentrification of Portland's traditional black neighborhoods, which priced-out would-be homebuyers.

The new Census data point to a significant erosion of Portland's black middle class since 2000.

'There was an actual net loss of black homeowners of almost 500' in the city, says Tom Cusack, a retired federal housing official who analyzed the new numbers for his Oregon Housing Blog.

In contrast, more blacks managed to buy homes in the Portland suburbs in the past decade. There was an increase of about 1,300 black-owned homes in Oregon outside Portland, Cusack says.

Blacks have historically had a lower homeownership rate than other groups. But the rate dropped more for Portland blacks than for any other racial or ethnic group tracked by the Census. In 2000, 38.2 percent of black households owned their homes. That dropped to 32.4 percent in 2010, according to new Census data. During the same period, the homeownership rate for Hispanics climbed inside the city.

'I think a lot of people expect that some part of this was subprime lending that occurred,' Cusack says. 'There's a reason they were called predatory lenders.'

A variety of studies have concluded that blacks suffered disproportionately from the upsurge of subprime and other risky loans doled out freely during the mid-2000s. When those adjustable-rate loans morphed to untenably high interest rates, many people lost their homes to foreclosure, sparking the Great Recession that started in December 2007.

'This was the biggest transfer of wealth from African-American homeowners to the pockets of banks, the biggest transfer of wealth in our lifetime,' says Angela Martin, executive director of Economic Fairness Oregon, a Portland consumer advocacy group.

As the recession intensified and millions lost their jobs, a larger wave of people couldn't make their house payments and lost their homes to foreclosure.

'You can't increase African-American homeownership rates when African-American unemployment has gone through the roof,' says Felicia Tripp Folsom, deputy director of the nonprofit Portland Housing Center.

Even blacks who have steady jobs have refrained from house hunting because they're spooked by the terrible job market and the barrage of media accounts showing African-Americans losing their homes due to risky loans, Folsom says.

In Portland and across the nation, black applications for new home loans are now 'at at all-time low,' she says.

The Portland Housing Center, which offers classes, counseling and financial assistance for first-time home owners, helps more than one person a day in the Portland area buy a home. But in the fiscal year ending in June, only 4 percent of the applicants were African-American, Folsom says.

Back in 2006-07, before the subprime loan crisis erupted, blacks accounted for 12 percent of the new homeowners assisted by the group.

Priced out of area

It's no surprise that the black homeownership rate in Portland has fallen, but it is disappointing, says Debra Neal, a real estate broker for Realty Trust who helps many first-time home buyers. Blacks have been displaced many times in Portland's history, Neal says, starting with the 1948 Vanport flood that wiped out an entire city filled with low-income housing, including many African-Americans who moved here to do wartime manufacturing jobs.

Later, blacks were displaced by the construction of Interstate 5 and Memorial Coliseum, and the planned expansion of Emanuel Hospital, a project that never occurred but nonetheless destroyed Portland's traditional black business district.

That history gives blacks a different perspective about buying homes than the Russian, Latino and Asian immigrants Neal sees.

'Their whole focus, when they come over, once they become citizens, is to grab a piece of the land,' says Neal, an African-American. But blacks have a different history. 'There is a fear because of what has happened, and it's paralyzing at times.'

More black families house hunting these days choose to look outside the traditional black community in inner Northeast and North Portland. Partly they are priced out of the area. But many want new homes, which are hard to come by in Portland, Folsom says.

Many are searching for better or more stable schools for their children, so they're buying houses in Beaverton, Vancouver and Happy Valley, Neal and Folsom say.

Keenya King, who grew up in inner-Northeast Portland, says she moved to the Gateway area of East Portland a decade ago, in part because of growing violence in her old neighborhood. King, 29, dreamed of owning a home for eight years, and got help from the Portland Housing Center. Through classes and advice, she and her husband boosted their credit scores, and saved for a down payment via an Individual Growth Account, which provides matching money.

Last year, they bought a 1,500-square-foot house in Gateway, in the Parkrose School District, for $166,000. They put up a third of the down payment and the rest was matched.

King wishes more African-Americans would explore buying a home. They might be surprised that it's not as out of reach as they think, she says. 'It has been wonderful, just the freedom of not having a landlord.'

Mykeia Martin and her family also bucked the recent trend. The 35-year-old, who works for the nonprofit Human Solutions, managed to buy a new three-bedroom house in Northeast Portland's Cully neighborhood last year for less than $200,000. She and her husband also took advantage of Portland Housing Center programs, including a matched Individual Development Account.

Martin says she preferred a new house because she doesn't know how to make some home repairs. She likes having a place where her two small, sometimes noisy, dogs, won't bother neighbors.

Having a neighborhood where people own their own homes makes a difference, Martin says, recalling how she unplugged a storm drain down the street that was clogged and causing a minor flood.

If people can live within their means, homebuying is worth the risk, she says, confident the economy will turn for the better eventually.

'There's nothing like having to roll your garbage out every Friday morning, or Thursday night,' she says. 'I love it. It's the best feeling in the world.'


Portland Housing Center offers a new class in October, Getting your House in Order, taught by African-Americans for African-Americans interested in buying a house. Classes meet Tuesdays from 6 p.m. to 8:30 p.m.

Call 503-282-7744, ext. 101 to enroll.


• Portland homeownership rates

2010

Native Americans: 32.2%

African-Americans: 32.4%

Hispanics: 34.3%

White, non-Hispanics: 57%

Asian/Pacific Islanders: 58.2%

2000

Native Americans: 33.7%

African-Americans: 38.2%

Hispanics: 30.4%

White, non-Hispanics: 59%

Asian/Pacific Islanders: 55.3%

• Portland owner-occupied households

2010

African American: 4,562

Hispanics: 5,091

Asian/Pacific Islanders: 8,271

2000

African American: 5,044

Hispanics: 2,831

Asian/Pacific Islanders: 5,968

Source: U.S. Census, Oregon Housing Blog