Study Finds Growing Disparities Within Massachusetts Real Estate Market
Blacks, Latinos and Asians in Massachusetts are having a tougher time than whites in juggling housing costs with other everyday expenses, according to a recent study by the University of Massachusetts.
Homes headed by minorities were nearly twice as likely as white households in 2000 to find they didn’t have enough cash left over after paying rent and Massachusetts mortgage expenses to adequately cover non-housing needs, according to the report, which was obtained by the Boston Globe.
And although government and private initiatives have put ownership within reach of more low-income minorities, many such first-time home buyers find their low-down payment mortgages put them at risk of foreclosure when they face even a small drop in income or unexpected medical bills.
“They’re on the edge. The slightest shock hits, and they’re going to feed their kids before they pay their mortgage,” said Michael Stone, a professor of community planning and public policy.
The study was commissioned by three institutes at the university that look at issues of concern to Latinos, blacks and Asians. The report relied on U.S. Census data from 2000 — the most recent year numbers are available.
Stone said a modest decline in Massachusetts real estate costs this year has gone only a little way to offset years of increases that left the median price for a home at $330,000 in the third quarter.
“There is no reason to believe that trends haven’t if anything worsened from what was revealed in 2000,” Stone told reporters, affordable housing advocates and faculty members who gathered for the report’s release.
The findings hit home with Joana Fuentes, a 36-year-old preschool administrative assistant who lives in the subsidized Villa Victoria project in Boston’s pricey South End neighborhood.
Fuentes shares a two-bedroom apartment with her husband and their 15-year-old daughter. The family’s $1,289 in monthly rent payments are tied to their income level. After rent, only about $500 is left.
The family, whose combined incomes vary from month to month depending on the season, struggles to pay for and insure a car that Fuentes said her husband drives in his meal-delivery job. Other income goes toward food, medical care, energy bills, cable TV and a phone.
Stone’s study examined the number of households like Fuentes’ experiencing what he called “shelter poverty,” rather than taking a conventional approach of examining housing costs based on the percentage of household income spent on rent or a mortgage loan.
Shelter poverty refers to an inability to adequately meet non-housing needs such as food, clothing, medical care and transportation because most income goes toward housing — a measure Stone said accounts for the fact that minority households are typically larger than white households.
The study found about 46 percent of minority households were living in shelter poverty in 2000. The percentage was highest for households led by Latinos (46 percent), followed by blacks (42 percent) and Asians (39 percent). Among whites, the shelter poverty rate was nearly 24 percent.
The study also found disparities between minorities and whites widened in the ’90s. The incidence of shelter poverty among minorities who owned their homes rather than rented rose from 16 percent in 1990 to 31 percent in 2000. Among white homeowners, the rate rose from 13 percent in 1990 to 20 percent in 2000.