Black home ownership plunges in Michigan

The percentage of African-Americans who own their own homes dropped in Michigan more than any other state, down to 40 percent from just over half in 2000, according to a report.

Much of that decline was seen in Detroit, which until the early 2000s had some of the highest levels of black home ownership in the country, said Mark Treskon, a research associate with the Urban Institute. The Washington D.C.-based think tank issued the report Tuesday. 

"The city and the region was a destination for people to build wealth and equity," Treskon said. "The loss of that equity has really harmed the ability of region's residents to build wealth for themselves and their families to set themselves up for the future."

In comparison, home ownership rates for whites state-wide dropped from 79 percent in 2000 to 76 percent in 2016. 

The burgeoning auto industry made Detroit a destination for job-seeking blacks nearly a century ago, leading to wealth creation passed down through generations and home ownership rates rarely seen previously. 

But manufacturing job loss from the Great Recession followed by foreclosure was the major factor bringing down Michigan's numbers, Treskon said. The fallout of subprime lending hit Detroit, in which 40 percent of the state's black population resides, particularly hard. 

The city had one of the highest rates of subprime lending in the country, according to federal records analyzed by The News. New lending has been scarce, although improving. Last year the city saw 994 mortgages, up from 736 in 2016, according to the Detroit Home Mortgage program.

Today, the city has flipped from majority homeowner to 54 percent renter as of 2016, U.S. Census Bureau data.

Within the state, Oakland County saw the biggest drop in home ownership among blacks, declining nearly 12 percentage points to 41 percent followed by Wayne County's 11 percentage point loss to 42 percent and Macomb County's drop of 8 percentage points to 32 percent. Nationally, black home ownership is at 41 percent.

The numbers reflect the high costs of living in Detroit, said Kenneth Patterson Jr., vice president of the Oakman Boulevard Community Association, who has seen neighbors struggle to keep their homes. High water costs, large property tax bills and costly car and home insurance policies can push some over the edge, he said. 

"There just seems to be so many things anchoring us down," said Patterson, 34, who owns his family home of 70 years. 

But people are desperate to get their slice of the American dream, he said, pointing to the hundreds lined up outside City Hall for a chance at a free home who were duped on July 4. 

"There has to be a long-term solution," Patterson said. "We are desensitized to what is happening."

The decline has been greatest for middle-age blacks in Michigan, ages 45-64. That group went from from 60 percent homeowners in 2000 to 41 percent in 2016.

The report recommends reforms to reduce tax foreclosures and legal protections for owners in land contracts in hopes of raising the numbers.

"Foreclosure is the most serious reason for the reduction in home ownership and this issue is the focus (of the) city's efforts to change the direction of home ownership numbers," Arthur Jemison, the city's chief of services and infrastructure, wrote in an email. "Keeping Detroiters in their homes in the city is our number one priority."

This year about 780 owner-occupied homes are headed to foreclosure from a high of more than 6,400 in 2015, Jemison said. 

Some housing advocates also argue modern-day redlining keeps blacks from owning homes. An analysis by Reveal from The Center for Investigative Reporting found that in the Detroit metropolitan area, black applicants were almost twice as likely to be denied a conventional home purchase loan as white applicants in 2016.

Lysa Davis, a former bank executive who is now a consultant in Detroit, says education is part of the solution, starting in schools.  

"The educational systems are set up for people to get a good job so they can be homeowners and start a family, then it is important to also teach them how to budget and maintain affordability as they acquire, grow and invest," Davis said. "Do not assume they get this education from home."