The rent, as Jimmy McMillan is known to say, is too damn high. Thanks to rent appreciation outpacing economic growth, housing has become steadily less affordable for all renters since 2011. Yet in predominantly black or Hispanic neighborhoods, this situation is notably worse. According to new data, residents of predominantly white neighborhoods spend 30.7 percent of their income on rent, compared to 43.7 percent in predominantly black neighborhoods and 48.1 in mostly Hispanic communities. Devoting such a large share of their income to rent limits the ability of minority communities to save for a down payment, which would allow them to transition to more affordable mortgage payments.
In those neighborhoods where rent is overall higher for everybody, like New York City, minority neighborhoods are hit even harder. In Boston and San Francisco, for instance, rents in largely hispanic communities make up more than 60 percent of their median income, and black communities end up spending more than 70. This represents a sort of catch-22 situation: owning a home is a great way to build wealth, but you need to save up cash to buy. Yet saving for a down payment is particularly difficult if you’re spending to more than half of your income on rent. Not only does rent equal a bigger percentage of income for minorities, but also race impacts the ability to get approved for a mortgage.
Even if renting is better for some people, a lack of permanence in regards to home ownership is discouraging, especially when you tie in the symbolism behind home ownership. One basic tenet of the American Dream is owning land or a home. In the classic novel “A Tree Grows in Brooklyn”, the main character’s grandmother, an Austrian immigrant, is constantly saving her money to purchase land, yet keeps getting thwarted. While this is meant to be a metaphor for the American Dream escaping many people, more than 70 years after it was published it remains a reality for many people in this country.
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