As Rent Soars, More and More Latinos in California are Priced Out of Homeownership
Household incomes in California have not kept pace with rising home values over the last two decades.
A new report by the Terner Center for Housing Innovation at the University of California, Berkeley found that from 2000 to 2019, median home values increased by roughly 180 percent while household incomes rose by 23 percent.
Latinos are over 40 percent of the population of San Joaquin County, yet affordable homes for its middle-income families have declined significantly since 2010. In 2010, only 91 percent of homes sold were affordable to Latinos. In other counties, such as Alameda, Santa Clara, and Riverside, the percentage has fallen to 58 percent.
“These areas that used to be affordable to working-class families, middle-income households, are increasingly becoming out of reach,” David Garcia, a policy director at Terner Center said.
“I think what a lot of people don’t always realize is that these [people] are essential parts of our workforce. These are people who are gainfully employed, and pay a percentage of their income towards their rent to stay in these residences.”
In an already competitive housing market, Christian Arana, 33, struggled to find affordable housing.
Arana searched for a home within Los Angeles County for almost three months but was always outbid by other offers.
“I would see a place on a Saturday, and then by Monday, I would find out that they had offers of $100,000 over asking. I didn’t have that kind of money,” Arana, the vice president of policy for the San Francisco-based Latino Community Foundation, stated.
The high rents are causing Californians to spend more on rent while cutting back on expenses like food and education, NBC news report.
Rent-based living severely limits homeownership and wealth-building opportunities. According to the report, 39 percent of middle-income renters spend more than 30 percent of their income on housing; 10 percent are severely cost-burdened.
“They [Latinos] rent at higher shares than some other groups. And this is a challenge because it makes it difficult to save up for a down payment or to pay a mortgage because homeownership costs have risen so much,” Garcia stated.
“Continuing to pay so much of income towards rent makes it difficult to transition to homeownership, too.”
In another recent report by the University of California, Los Angeles, researchers found that Latinos and Asians in low-income households made up the lowest percentage of applicants for rental relief assistance. Latinos also made up the lowest percentage of recipients of rental relief assistance.
The Terner Center found that 5.2 million households in California were burdened by housing costs in 2019. Almost 40 percent of households in California pay rent or home mortgages.
There were significantly more burdens for renters than for homeowners – 53,1 percent compared to 29,6 percent.
“I don’t think there’s one silver bullet to solve this crisis. It’s going to take really a spectrum of policy tools to adequately address this, and it won’t happen overnight,” Garcia continued.
“It took decades to get to this point, and it’s going to take several years, several legislative sessions to come up with the ideas and policies to take us out of this hole.“