The Twin Cities have the largest gap in homeownership between Black and white residents – 51% – and the gap is widening. The reason? Gentrification and the rise of single family rentals owned by investor companies.
Tiffany Bui reports:
In the Twin Cities, the gap between the number of Black residents who own their home and white residents is the widest in the country.
Researchers from the Urban Institute found that, Black homeownership has declined dramatically since 2000. This resulted in a 51 percentage point difference between the two groups.
Yonah Freemark, one of the researchers, identified two reasons that contribute to fewer Black homeowners: gentrification, and the rise of single family rentals owned by big investor companies.
“So the Great Recession, and the years that followed, were associated with a significant increase in foreclosures, especially among homeowners of color,” explained Freemark. “And so there were a lot of investors who were able to sort of leverage the inability of people of color to continue to own their homes and buy up residences in those neighborhoods.”
The companies that own the most single family rentals in the Twin Cities include Front Yard Residential Corporation and Invitation Homes. These investors buy up properties in typically low-income and minority neighborhoods like North Minneapolis and central St. Paul. This funnels the wealth out of neighborhoods; researchers estimate about 1 billion dollars worth in Hennepin and Ramsey counties over a period of 15 years.
Catrice Williams heads a team of financial coaches for Project for Pride in Living, a Minneapolis organization that prepares people to buy a home. She said more investors in the market can make it harder for individuals to win a bid, especially for those who can’t afford to come with cash in hand.
“So they can’t buy and they can’t build wealth. And that puts them right back into that renting cycle where they again cannot build wealth, they can’t invest in the community to uplift and rebuild,” Williams said.
Researchers say that government regulation of single family rentals and homeownership assistance to Black families can help close the gap.
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