Land, Housing, Homelessness: Differential Access to Homeownership

Differential Access to Homeownership

Over the past decades, the vast changes in the economy and society have led to differential access to homeownership. Most notably, the differential access to homeownership, property acquisition like land and homeless has been caused by social and economic inequality in the US. Factors such as differences in wealth, income, family structure, and racial background contribute to the differences in home ownership (Haurin, Herbert, & Rosenthal, 2007). Similarly, the differential opportunities in home ownership promote or sustain the differences in the overall quality of life like wealth, education, and employment.

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The most notable differential barrier to homeownership is affordability. The lack of sufficient income or wealth hinders low and moderate-income household from qualifying for a home mortgage. However, the lack of adequate savings to meet the down payment and the closing cost is by far one of the most fundamental barriers to buying a home. The down payment assistance programs have the potential to increase homeownership among low-income households (Haurin et al., 2007). Likewise, access to credit contributes to the differential access to homeownership. Income and wealth constraints act as a barrier in mortgage qualification especially for low-income and minority households. The situation is further worsened by weaker credit histories, higher debt level, and unstable employment. However, the structural discrimination imposed by racial or ethnic differences in the US makes it difficult for minorities to achieve homeownership (Kurz, 2004). The minorities such as blacks are highly likely to be denied access to loans as opposed to whites. The discrimination in the mortgage market imposes unfavorable mortgage terms for minorities and even predisposes them to predatory and high-priced subprime loans. Consequently, the low-income and minority households experience information deficit and limitations on housing search during the process of pursuing homeownership. The blacks, Hispanics, and low-income households lack information about the process of buying property and homes. Furthermore, housing search in whiter or affluent neighborhoods is deterred due to structural social problems such as discrimination by race and socioeconomic status (Collins & Yeskel, 2011). Therefore, the growing inequality has contributed to differential access to home ownership in the United States.

Homelessness, its Causes, and Effects

Homelessness has become a dominant crisis across the United States and can be seen everywhere including on broadcast media such as TV. The number of homeless people is on the rise. Currently, homelessness is a common feature depicting the standard of living in the US. On a broader scale, homelessness is caused by complex social or structural problems and individual choices. Homelessness is associated with the picture of people who sleep on sidewalks, parks, streets, and subway. In other words, it is linked to people who lack any kind of shelter and move from one place to another as a transient feature throughout the year. The Department of Housing and Urban Development (HUD) stipulates that homelessness is the lack of a fixed, regular and adequate residence especially at night (Thompson, 2015).

There is an inextricable link between homelessness and poverty. As the wealth and income disparity continue to rise in the US, the poor continue to suffer from structural problems of inequality. The poverty impoverished people are frequently unable to meet their education, housing, food, health care, and childcare needs. Therefore, these people must make difficult choices when constrained resources cover only a proportion of their necessities. In most cases, they drop housing as it absorbs a high percentage of their income (Bringle, 2010). According to 2016 data by the United States Census Bureau, the national poverty rate accounted for 12.7% or 40 million people (Homelessness in America, n.d). The lack of employment opportunities is a key factor that contributes to poverty. A high rate of unemployment implies difficulty in securing a job. However, securing a job does not mean that people escape the grasp of poverty. The decline in wages has put housing out of reach for the poor. Similarly, the decrease in the value of available public assistance has contributed to the increase in poverty and the rate of homelessness (Homelessness in America, n.d). States in the US have not implemented an alternative welfare system that provides benefits to families and individuals both during employment and unemployment.

The United States is facing an escalating housing affordability crisis that has led to the rise in homelessness. Millions of low-income Americans spend 70% of their income on shelter (Thrush, 2018). Rents are on the rise and the government has failed in the construction of affordable rental apartments. Besides the lack of affordable housing, differential discrimination in rentals has worsened the condition. Black families are highly likely to reside in poverty-afflicted areas that have poor educational resources, services and limited economic opportunities (Collins & Yeskel, 2011). People who become homeless are likely to have resided in such neighborhoods due to barriers experienced when moving to favorable areas. A HUD study concluded that people of color were shown few rental units, charged more and denied leases than their white counterparts fueling differential rates of homelessness (Thrush, 2018). Therefore, the need for affordable housing coupled with improved incentives on assistance programs is the solution the United States requires to tackle homelessness and the housing crisis.

Domestic violence is a problem that cuts across all socioeconomic groups and backgrounds and is a contributing factor to homelessness. Domestic violence victims suffer emotional, physical, sexual and psychological torture at the realms of the perpetrators. They often live in fear and when a chance arises, they flee and end up in a state of homelessness. Research indicates that domestic violence survivors are part of the vast majority of the homeless population in the US. This population is underserved by the local, state, and federal agencies because the government focuses on the chronically homeless. The HUD data stipulated that the population of the chronically homeless was 14% in 2016 (Homelessness in America, n.d). The homeless victims of abuse find it difficult to get a job because employers do not hire people without a physical address.

Mental illness is also a large contributing factor to the increasing population of the homeless. The mentally ill are susceptible to poverty, personal vulnerability, and disaffiliation leading to homelessness. These people lack the capacity to sustain employment and may receive low income inadequate to cater for shelter, healthcare, and food. Furthermore, the mentally ill suffer from delusional thinking that leads to isolation from family and friends. The withdrawal leads to the loss of a support system. As a result, the mentally ill experience homelessness for longer periods of time due to less contact with friends and family. Moreover, mental disorders lead to impaired thinking and judgment, a risk factor to homelessness and poverty. On the other hand, homelessness amplifies poor mental health. It is stressful and exacerbates previous mental disorders promoting depression, anxiety, lack of sleep and substance abuse (Bringle, 2010).

Substance abuse such as drugs and alcohol can lead to homelessness even though the relationship is complex and controversial. Addiction to drugs leads to impaired reasoning and poor financial management. Addicts spend much of their income in purchasing alcohol and drugs which impoverishes their financial well-being. Apart from that, it leads to loss of employment leading to poverty and eventually leaving on the streets. Therefore, poverty and substance abuse increase the likelihood of homelessness. Furthermore, in the absence of proper treatment, substance abuse addiction may diminish the chances of securing housing once on the streets (Thompson, 2015).

Homelessness has severe consequences for individuals. It means sleeping in rough conditions, moving between accommodation shelters and the lack of social contact such as normal family life. Besides, the long-term experience of homelessness influences a person's self-esteem. The homeless lack the opportunity to do well in employment or education due to the lack of proper living conditions (Bringle, 2010).

Economic Impact of Homelessness

Homelessness negatively affects the economic competitiveness of a nation. According to the Annual Homeless Assessment Report (AHAR) that was submitted to Congress by the HUD, homeless increased for the first time in seven years. There were 553,742 homeless people on a single night in 2017 (Von Werden, 2018). Homelessness is an economic burden to society because the homeless require the most expensive publicly funded institutions and services. It also has a negative impact on human life, productivity, and health. The federal government invests in the homeless assistance grants through HUD with the aim of ending homelessness. The program funds local and state governments as well as nonprofit providers with the resources to end mainstream homelessness. For instance, the HUD was awarded $1.96 billion in 2017 through the Continuum of Care (CoC) program for homeless services (Von Werden, 2018). Nevertheless, the CoC funding is inadequate to tackle housing and support needs for the homeless or people at the risk of becoming homeless.

References

Bringle, J. (2010). Homelessness in America Today. New York, NY: The Rosen Publishing Group.

Collins, C., & Yeskel, F. (2011). Economic Apartheid In America: A Primer On Economic Inequality & Insecurity. New York, NY: The New Press.

Haurin, D. R., Herbert, C. E., & Rosenthal, S. S. (2007). Homeownership Gaps Among Low-Income and Minority Households. Low-Income and Minority Homeownership, 9(2), 5-51. Retrieved from https://www.jstor.org/stable/20868618.Homelessness in America. (n.d.). Retrieved from https://nationalhomeless.org/about-homelessness/

Kurz, K. (2004). Home Ownership and Social Inequality In a Comparative Perspective. Stanford University Press.

Thrush, G. (2018, July 27). As Affordable Housing Crisis Grows, HUD Sits on the Sidelines. Retrieved from https://www.nytimes.com/2018/07/27/us/politics/hud-affordable-housing-crisis.html

Thompson, T. (2015). Poverty in America. New York, NY: Greenhaven Publishing LLC.

Von Werden, C. J. (2018, May 1). The Impact of Homelessness on Economic Competitiveness. Retrieved from https://www.americansecurityproject.org/impact-homelessness-economic-competitiveness/