Why this is important
Housing is more than shelter. Homeownership has historically been seen as an indicator of financial security and overall stability in a community, with home owners less cost-burdened than renters (see the Cost-burdened Households measure). However, people who are white are more likely to own their own homes than are people of color. The difference in homeownership between white and non-white households is known as the homeownership gap1. There are many reasons for homeownership gap to occur, including income disparities, access to credit, racism in lending, and other practices. It is important to ensure that persons of all races in Dakota County have equal opportunities opportunity for home ownership and to establish good credit that will allow them to successfully own and manage a home.
What the data show
According to the U.S. Census Bureau’s American Community Survey Dakota County’s homeownership rate in 2011 was 77%, higher than the statewide rate of 73%. Both these figures compare favorably with the national rate in 2011 of 65%. However, the homeownership rate varies in regions and communities across the state.
The figure tracks the homeownership gap in the Twin Cities, Greater Minnesota and Minnesota between 1990 and 20112. From 2000 to 2008, the homeownership gap between white households and those of color narrowed slightly in Minnesota as well as in the Twin Cities. However, the gap has widened since 2008 and (in 2011) is larger than it was in 1990 for Minnesota and the Twin Cities. The widening gap can be mainly explained by the recent housing crisis, which affected all communities and was particularly hard on people of color. As a result, the homeownership rate for households of color dropped faster than those of white households. Given that white households’ income is higher than that of households of color, and unemployment remains higher for people of color compared to people who are white, it will take longer for the households of color to recover from the recent housing crisis.
1 The housing gap measure is calculated as a percentage based on the ownership rate for white (non-Hispanic) households minus the rate for households that identify as American Indian, Asian, black, some other race, multi-racial or Hispanic.
2 American Community Survey three-year estimates are based on data collected over a period of three years, and therefore describe the average characteristics over that time period. For example, estimates labeled 2009-2011 describe the average homeownership gap that occurred between 2009 and 2011.