For years, Philadelphia’s booming real estate market has been a contributor to the city’s dwindling homeownership rates, and new data suggest communities of color are feeling the worst effects.
According to economists with the Apartment List, the Philadelphia metro area ranks 14th out of the top 50 biggest metros in housing diversity, with a homeownership racial gap of 25.2 percent. About 72 percent of whites own homes in the Philadelphia area while about 47 percent of nonwhites own them. That’s a smaller share of nonwhite homeowners than in 2010, 2000 and even in 1980. Between 2000 and 2015, as the United States saw that gap narrow by about 2 percent in this category, Philadelphia flatlined, its gap narrowing by just 0.1 percent.
Philadelphia’s gap can’t be explained entirely by education status either. People of color with college degrees still significantly trail whites in homeownership rates. About 65 percent of whites who had not attended college own homes here, according to the Apartment List, compared to 30 percent of blacks and 34 percent of Hispanics. Seventy-five percent of college-educated white Philadelphians are homeowners, compared to 59 percent of Asian, 54 percent of black and 47 percent of Hispanic college-educated city dwellers.
Homeownership rates have been falling everywhere across the country, including Philadelphia, for years. About 53 percent of Philly households are homeowners, according to Census data. That number was at 57 percent a decade ago and nearly 60 percent in 2000. Most new construction these days, which has skyrocketed in price, is out of the price range for many Philadelphians of all races.
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But this decline in homeownership has clearly been more severe for the black and Hispanic communities, which also have a greater share of population under the federal poverty level than Asians or whites. A smaller percentage of those communities own houses now than did in 1980. As you can see in the table, Hispanic homeownership has fallen by 7 percent and black homeownership by 13 percent since then.
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Homeownership has always been considered a way to build wealth and stability. That’s the case more than ever in Philadelphia, given the rising property rates throughout the city, said Beth McConnell, policy director for the Philadelphia Association of Community Development Corporations. When neighborhoods get more expensive, renters are always the first to be pushed out. In Graduate Hospital, one of Philly’s most gentrified areas, the black population fell by half between 2000 and 2014.
“If you own a home in a gentrifying neighborhood,” McConnell said, “it’s way easier for you to be able to remain and stay in that neighborhood.”
Cultural differences often play a role in homeownership, too, particularly for Philadelphia’s growing immigrant population. Sarah Yeung, director of planning for the Philadelphia Chinatown Development Corporation, said many Asian immigrants have the financial means to own a home but have difficulty navigating the American banking and loan system. The Philadelphia Chinatown Development Corporation has a program that explains this system to immigrants with limited English proficiency. Ceiba does the same for the Spanish-speaking community.
In recent years, as other cities have developed initiatives to increase diversity in their housing stock, Philadelphia has done little until recently. On the last day of the City Council session in June, Councilwoman Maria Quinones-Sanchez introduced a bill calling for inclusionary zoning, a regulation that would require developers to set aside a certain amount of affordable housing in new projects. It would mostly help produce affordable rents, but McConnell, who is chair of a taskforce on the subject, said ways to diversify homeownership would also be considered.
Also this year, Council President Darrell Clarke introduced a $100 million plan to rejuvenate a free home repair program that previously had a years-long waiting list. The plan’s goal is to keep houses in shape to help low- and moderate-income homeowners stay in their homes.
“I feel optimistic that there’s a sense in City Council,” McConnell said, “that we need to do more and have more strategies to create more affordable homes.”
