President Bush may soon get an opportunity to put into practice the environmental balance that may be necessary to ensure the American dream of homeownership for all.
Should the President and key cabinet members, such as Treasury Secretary Paul ONeill and HUD Secretary Mel Martinez, take the lead, the Bush administration may accomplish for minorities what President Clinton was only able to provide to affluent whites.
In high-cost areas of the nation such as California, where home prices are twice (and in some cases four times) the national median, the minority community is increasingly being denied the opportunity for homeownership.
More and more minority leaders have begun to recognize that the lack of homeownership for Latinos and African-Americans in California is not a result of discrimination by financial institutions. Instead, these leaders now see, Californias laudable environmental restrictions and objectives have created a form of environmental redlining that makes minority homeownership an endangered species with far less protection than any insect species.
The 1999 California conventional home loan statistics provided by the Federal Reserve all too graphically illustrate the crisis:
Latinos represent 44.5% of Los Angeles Countys population, yet received only 14% of conventional home loans made there.
Californias 2.5 million African-Americans received only 2% of all conventional home loans in 1999.
In South Central Los Angeles, whose population of 1.3 million includes nearly 600,000 African-Americans, the nine largest financial institutions made only 59 home loans to African-Americans earning $41,000 or less.
Because of the rigidity, and sometimes hypocrisy, of an often elitist environmental movement, no-growth and anti-urban-sprawl initiatives sprout everywhere. When minority leaders attempt to counter this by recommending building on an empty inner-city site, the environmentalists scream foul and contend that the site is a dangerous brownfield, a term for polluted land upon which nothing may be built.
Los Angeles County alone has 35,000 so-called brownfield sites, most of which are either totally safe for housing or could easily be cleaned up. It is estimated that these sites alone could provide 250,000 to 350,000 affordable units in Los Angeles over the next five years. If this occurred, the citys housing prices would soon be affordable.
This would also eliminate close-to-zero rental vacancy rates that have escalated rental costs to a point where the majority of Los Angeles low- and moderate-income families spend half or more of their income on rent.
Minority community leaders have recently proposed the following efforts to ensure the American dream of homeownership for all:
As part of the Presidents tax reductions, permit investor pools to jointly purchase housing in selected low-income, high-cost areas with families at 80% or below median income. In return for the investor pools securing all the tax deductions (homeowners and theirs), the pool would cover half the cost of mortgage payments, taxes, and insurance.
In effect, this would cut homeownership costs in half and allow even a family earning $25,000 a year to afford a home in high-cost areas of California.
Promote environmental balance and smart growth that treats the affordable-housing market in high-cost areas as an endangered species subject to the same protection now accorded virtually every insect and rodent.
A fivefold increase in the multifamily, low-income tax credit which today is virtually the only source for affordable rental units in high-cost areas from $600 million a year to $3 billion a year. This is a modest sum in the context of the almost $300 billion a year in mortgage interest and property tax deductions that disproportionately benefit affluent families homeownership dreams.
Lets hope President Bush will consider how environmental balance and focused inner-city tax policies can ensure the American dream for all. Should he do so, the Republican Party may one day again be the party of Abraham Lincoln.
Mr. Gamboa is executive director of the Greenlining Institute in San Francisco and a member of the Federal Reserves Consumer Advisory Council. Ms. Casillas-Corona is director of affordable housing at Hermandad Mexicana Nacional in Los Angeles.
