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REALIZING A DREAM

The American dream of owning a home is still a reach for minorities in the Buffalo Niagara region.

Not only are minorities in Erie and Niagara counties less likely than whites to own a home, but they're less likely to be homeowners than minorities across the nation.

Far less.

While 71 percent of white households in America own homes, 47 percent of the nation's minority households are homeowners, census data shows.

It's worse in Buffalo Niagara: 37 percent of minority households in the Buffalo region own their home, compared to 71 percent of whites.

"I tried to buy a house three or four years ago but was unsuccessful," said Reninger Flores, 45, a Peru native now living in Buffalo. "With my low income, the banks, they don't believe in people like us."

The gap between white and minority homeowners -- a long-standing fact nationally -- is disturbing not only from an equity standpoint, but also because homeownership generally is seen as crucial to restoring confidence and stability to troubled urban neighborhoods.

And with a Buffalo population that's nearly half minority now, increasing minorityhomeownership opportunities is vital, some experts believe.

There's a long way to go. The gap between whites and minorities hasn't narrowed at all in metropolitan Buffalo during the past 10 years, data shows. In fact, census figures show the gap widening slightly nationally.

"You're not going to bring Buffalo back until you bring its citizens back," said Robert D. Bannister, director of Fannie Mae's Western and Central New York partnership office. "You do that by having specially designed mortgage programs to help people in the city become homeowners and by bringing in affordable rental housing."

But there are encouraging signs.

A few bright spots

Minority homeownership across the country is at its highest point ever, thanks in large part to better mortgage-lending practices and economic good times during much of the 1990s. And there are indications the Buffalo Niagara region is making strides, too.

During the 1990s, the minority homeownership rate in Buffalo Niagara was up 2.8 percent -- roughly the same nationally -- driven mostly by more than 3,500 new minority homeowners in Buffalo.

"It's been great," said Sonya Bolden, 36, a single Buffalo mother, who bought her first home recently on Martha Street, off Bailey Avenue. "I have a 9-year-old daughter, and I wanted someplace for her to call home."

But many minorities still are hampered by a variety of economic issues, experts said.

Underlying causes

The gap is a national problem. Here's why:

Income. Simply making enough money continues to be a major barrier for minorities.

"There's a strong correlation between income and homeownership," said Nicolas P. Retsinas, director of the Joint Center for Housing Studies at Harvard University. "The higher the income, the more likely you are to own a home, and minorities, in general, have lower incomes than the white population."

The nation's median household income for whites is $45,904, compared to $33,477 for Hispanics and $30,439 for African-Americans, according to the Census Bureau. Incomes are lower here, experts said.

Credit history. The demise of inner-city banks has limited minority access to lenders. And many minorities have fallen into debt because of predatory lending practices by companies that seek out low-income borrowers and sell them loans with excessively high interest rates, Retsinas said.

Coming up with down payment and closing costs. While many whites borrow from their families, fewer minorities are able to fall back on their parents, who haven't built up home equity of their own, Retsinas said.

Discrimination. Housing discrimination -- which historically has held back minorities from owning a home -- still exists today in some cases, Retsinas said.

Narrowing the gap

It's no wonder community-based organizations that promote and provide assistance to prospective buyers have a hard time reaching out to minorities.

"It's a tough job to convince them they can be homeowners for less than they're renting," said Linda Chiarenza, executive director of the West Side Neighborhood Housing Initiative. "I think people have the mind-set that renting is the way it's always going to be."

But numerous public and not-for-profit programs are working to narrow the gap.

Amherst, Cheektowaga and the Town of Tonawanda in recent years have started using federal Housing and Urban Development funds to provide loans for first-time home buyers with low to moderate incomes.

In Buffalo, several neighborhood housing agencies provide city residents with a link to housing opportunities and educate prospective buyers about owning a home.

Kensington-Bailey Neighborhood Housing Services walked Bolden through the process, while the West Side Initiative helped Flores, who never imagined he'd one day own a home.

Flores, a restaurant worker, recently bought his first house on 14th Street on Buffalo's West Side -- a two-story with plenty of room for his wife, Mary, and four girls.

Perhaps most important, banks and lending institutions have made a concerted effort to provide homeownership opportunities to minorities and low-income families, Retsinas said.

Buffalo's unique problems

In 1998, Fannie Mae, the nation's largest source of home mortgage funding, launched a $2 billion program in Western and Central New York to help low- to moderate-income families become homeowners, Bannister said.

"The bad news is we have had an exodus of people and jobs from Western New York for a half-century," Fannie Mae's Bannister said. "The good news is we have one of the most affordable housing markets in the country. If you rent, you can own a home."

Still, Buffalo and the region have to contend with added baggage.

Retsinas thinks the area's economy has a lot to do with the contrast between the percentage of minority homeowners here and nationwide.

"Buffalo certainly hasn't experienced the economic growth (of) other areas," Retsinas said.

And while experts agree banks are making an effort to provide more homeownership opportunities to low-income households, some believe the Buffalo area needs to do more.

Consider: Home mortgage lending to minorities rose 4 1/2 percentage points across the nation between 1993 and 1999; but here it was up less than 1 percentage point, according to a recently released Harvard University study.

Moreover, metro Buffalo is one of the most residentially segregated communities in the nation, compounding the dynamics. It's difficult to compare white and minority homeowners, because the homes in black neighborhoods generally don't appreciate in value as much as in white neighborhoods, said Henry L. Taylor Jr., director for the University at Buffalo's Center for Urban Studies.

"They realize if they buy a house on the East Side, when they get ready to sell that in 10 to 15 years they may not be able to sell it at a profit," Taylor said.

A stake in the neighborhood

Buffalo officials are counting on closing that gap.

"It's critical to our success in revitalizing each and every neighborhood of the city," said Fred Heinle, Buffalo's director of residential development. "You're starting to see it in neighborhoods where we're providing these opportunities."

Heinle points to Buffalo's Pratt-Willert neighborhood, where M.J. Peterson and James Management Co. created an award-winning development by building about 500 homes in the shadow of downtown during the past decade.

While officials agree not everyone wants to or should own a home, the stake homeowners have in the community has a positive ripple effect.

"Traditionally, homeowners are more involved in the neighborhoods," said David Young, executive director of Buffalo Neighborhood Housing Services. "They're more involved in the schools; they vote more often. They're paying taxes now, so they have more interest in the city and what's going on with their investment."

But the problem isn't always a lack of good homes or interested, qualified renters.

"What really becomes a factor is neighborhoods, and we have one of the poorest neighborhoods," said Bruce Williams, executive director of Broadway-Fillmore Neighborhood Housing Services. "No one wants to live there."

Taylor, the UB professor, argues that the city has done a good job creating new homeowners, but needs to focus more on providing quality rental opportunities and improving city streetscapes and commercial corridors.

When that happens, he said, city neighborhoods will start seeing more businesses -- and homeowners, such as Bolden and Flores.

"The house is wonderful. Sometimes I think this is not my house," Flores said. "Sometimes I think I'm dreaming."

News researcher Andy Bailey contributed to this report.

e-mail: jrey@buffnews.com

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