Buying the Family a Home

Newspaper article

By: Anonymous

Date: August 3, 1907

Source: "Buying the Family a Home." Cleveland Journal. 5 (August 3, 1907): 4.

About the Author: The Cleveland Journal was a weekly newspaper published in Cleveland, Ohio, from 1903–1913. The paper focused primarily on news and issues of interest to African-American readers.

INTRODUCTION

Owning a home brings numerous advantages not available to those who rent their residence. While rents typically increase each year (and can be increased at whatever rate the landlord chooses) mortgage payments are often fixed for the life of the loan; in most cases wages continue to rise, making the mortgage payment a gradually decreasing portion of the homeowner's income. In addition, real estate usually appreciates in value, meaning that a home often becomes an increasingly valuable asset and often serves as the cornerstone of financial security.

Real estate owners also benefit at retirement: A paid-off house provides rent-free living during a phase of life when income typically decreases, as well as providing a durable asset that can be left to one's heirs. Home owners also receive federal income tax deductions, reducing the actual cost of ownership; in practice this difference means that a $900 rent payment actually costs more for many Americans than a $900 mortgage payment, which may be offset by several hundred dollars in tax savings.

Beyond the purely financial advantages, home ownership also brings numerous social and psyhological benefits. For many Americans, buying their first home is a milestone of independence, and owning a home is considered by many to be the defining element of what has figuratively been called the American Dream.

Home ownership is not enjoyed equally by all ethnic groups in America. In 1900 home ownership was less common than it is today, although it was becoming more widespread. At that time 46% of white men owned their own homes; among African-American men the rate was much lower—only 20%. Recognizing the many economic and social problems associated with renting, some black writers began urging their readers to take the necessary steps to become home owners.

PRIMARY SOURCE

Buying a Home for the Family

What is a family without a home? Where is home? Dryden tells us that "Home is the sacred refuge of our life." If we are to judge by the place some people live, there is very little sacredness about it.

Home, like wine, grows better with age. The memories of years help to make home sacred. To go back to the spot where one's childhood was spent, and there to look upon familiar scenes, every fence post has a meaning. Can life offer richer blessings? Such privileges are made possible by wise parents saving of their means and buying an abiding place. Then the rains may come, the winds blow and beat upon that house, but it will still stand in father or mother's name.

Not so with the rented house. From month to month every family living in a rented house is taking a chance of being in the street the succeeding month. Especially is this true in cities, as Cleveland, where extensive building is always in progress.

The best way to keep a roof overhead is to own the roof.

More people in Cleveland should own homes. Thousands and thousands of dollars are spent for rent that should go towards buying homes. People who own real estate are always considered more substantial citizens than those who merely own a single van of household goods. Why not? The best time to start to buy a home is NOW.

SIGNIFICANCE

The twentieth century was a period of increasing home ownership among virtually all racial groups, as more Americans shifted from renting homes to buying them. However the gap between white and black home ownership remained largely static during the first forty years of the century. Among the many causes of this discrepancy was rampant housing discrimination. Blacks were often turned away when attempting to rent in white neighborhoods, and new housing developments often included language in their advertising making it clear that blacks could not build there; such restrictions tended to keep blacks from enjoying better neighborhoods and more rapid property appreciation.

Blacks also frequently encountered difficulties when applying for a mortgage to build or purchase a home. In many cities banks would refuse to make business or home loans in certain lower-income neighborhoods, a then-legal practice known as redlining. Banks that employed this practice argued that these less-affluent neighborhoods were more dangerous, hence loans in these neighborhoods carried a higher level of risk. However such claims were rarely substantiated and the policies typically resulted in black homeowners facing added difficulty in buying a home. The practice also meant that segregated neighborhoods tended to stay segregated.

Redlining and other discriminatory housing practices were common until the 1960s, but despite these barriers black home ownership rates inched up. In 1968, shortly after the death of civil rights leader Martin Luther King, Jr., Congress passed the Fair Housing Act, explicitly prohibiting discrimination in housing rentals, sales, and all other real estate-related activities. As a result, black home ownership rates climbed sharply.

By 1990 black home ownership rates had risen dramatically, reaching 52%. The ownership gap of 26 percentage points in 1900 had fallen to fewer than 20. Other studies have found slightly lower rates of home ownership, though all available data suggests that as of 2005 the black ownership rate remains approximately 50%.

In the twenty-first century, home ownership remains a common goal for Americans; in 2004 the Census Bureau reported ownership rates in America at an all-time high of 69%, although the gap between white and black home ownership rates remained greater than 20%.

FURTHER RESOURCES

Books

Ong, Paul M. The Effects of Race and Life-Cycle on Home Ownership: A Study of Blacks and Whites in Los Angeles 1970 to 1980. Los Angeles: Graduate School of Architecture and Urban Planning, University of California, Los Angeles, 1986.

Stacey, William. Black Home Ownership: A Sociological Case Study of Metropolitan Jacksonville. New York: Praeger, 1972.

Struyk, Raymond J. Determinants of the Rate of Home Ownership of Black Relative to White Households. Washington, D. C.: Urban Institute, 1977.

Periodicals

Bajaj, Vikas, and Ron Nixon. "For Minorities, Signs of Trouble in Foreclosures." New York Times. 155 (February 22, 2006): A1, C8.

Collins, William, and Robert Margo. "Race and Home Ownership: A Century-Long View." Explorations in Economic History. 38, no. 1 (January 2001): 68-92.

Anonymous. "Single Black Female, in Her Own House Women on the World Stage." The Economist. 373 (November 18, 2004): 35.

Web sites

Harvard University: Joint Center for Housing Studies. "Publications: Home Ownership." 〈http://www.jchs.harvard.edu/publications/homeownership/index.html〉 (accessed July 3, 2006).

U.S. Census Bureau: Housing Vacancies and Homeownership. "Annual Statistics:2004." February 17, 2005 〈http://www.census.gov/hhes/www/housing/hvs/annual04/ann04t20.html〉 (accessed July 3, 2006).

Upjohn Institute for Employment Research. "Black-White Segregation, Discrimination, and Home-Ownership." August, 2001 〈http://www.upjohninst.org/publications/wp/01-71.pdf〉 (accessed July 3, 2006).