Immigration
The subject of immigration can incite controversy when brought up in conversation. Immigration is at levels unprecedented since the early twentieth century, and undocumented immigration appears to account for almost half of the total U.S. immigration.
The number of migrants coming to the United States each year, legally and illegally, grew very rapidly starting in the mid-1990s, hit a peak at the end of the decade, and then declined substantially after 2001. By 2004, the annual inflow of foreign-born persons was down 24% from its all-time high in 2000, according to the Pew Hispanic Center analysis of multiple datasets collected by the Census Bureau and other government agencies.
Those who oppose immigration suggest that immigrants are taking jobs needed by native-born Americans and overwhelming service structures in the United States, and that the fiscal costs to provide services to them far exceed the benefits. The most vociferous critics even claim that immigration is at levels that will forever change American culture.
Those less alarmed by current levels of immigration point out that the United States is a country of immigrants noting that previous waves of immigrants (Germans, Irish and Italians, for example) have been assimilated over time and that many industries in the United States are heavily dependent on immigrant labor.
But both sides generally agree that undocumentedimmigration is a concern and potential security risk in the post 9-ll era.
Unauthorized migrants
The Pew Hispanic Center's estimates, which are widely accepted, suggest that there were 11.1 million unauthorized migrants in the United States a year ago. This compares to 10.3 million in 2004.
Based on analysis of other data sources that offer indications of the pace of growth in the foreign-born population (Census 2000, the March 2005 Current Population Survey (CPS) and the monthly Current Population Surveys through January 2006), the Center developed an estimate of 11.5 to 12 million for the unauthorized population as of March 2006.
In the March 2005 CPS, two-thirds (66%) of the unauthorized population had been in the country for ten years or less, and the largest share, 40% of the total or 4.4 million people had been in the country five years or less.
There were 5.4 million adult males in the unauthorized population in 2005, accounting for 49% of the total. There were 3.9 million adult females accounting for 35% of the population. There were 1.8 million children who were unauthorized, 16% of the total. In addition, there were 3.1 million children who are U.S. citizens by birth living in families in which the head of the family or a spouse was unauthorized.
About 7.2 million unauthorized migrants were employed in March 2005, accounting for about 4.9% of the civilian labor force. They made up a large share of all workers in a few more detailed occupational categories, including 24% of all workers employed in farming occupations, 17% in cleaning, 14% in construction and 12% in food preparation.
Special Class -- April 18
At Home with Diversity - Register
Date: Tuesday, April 18
Time: 9:00 a.m. to 4:00 p.m. (1 hour lunch break)
Where: Columbus Board of REALTORS®, 2700 Airport Dr.
Instructor: Sheila Bell, certified NAR At Home with Diversity instructor from Cincinnati
Cost: $60 for the 6-hour course (lunch is on your own)
CE credit: 6 hours of continuing education credit (satisfies the state of Ohio civil rights requirement)
By 2007, minority-buying power in the United States is expected to reach $2.3 trillion. Government and industry data indicate that two out of every three new households are being formed by foreignborn or minority residents in our communities. Minorities are projected to account for more than half of first-time homeowners by 2010.
As professionals, all real estate agents should develop the skills needed to reach these growing markets.
At Home with Diversity is an award-winning certification course that will empower REALTORS® to reach out and serve the increasingly diverse population. It is an educational experience designed to present a picture of the changing face of the real estate industry. More importantly, the course teaches how real estate professionals can increase their sensitivity and adaptability to future market trends. These skills will help professionals thrive as effective service providers and community leaders.
The six-hour course addresses issues of diversity, fair housing and cultural differences. All three subjects are closely related and have value for real estate professionals who must serve diverse local markets.
This is the first time the Columbus Board of REALTORS® has ever sponsored and offered this NAR program. Take advantage of this opportunity to earn the At Home with Diversity certificate.
At Home with Diversity covers:
- Diversity marketing strategies
- Demographic research for your local area
- Fair housing "must knows"
- Ways to achieve diversity and invest in your business
- Skills to build diversity awareness and communication
By taking the At Home with Diversity course, the student can earn:
- Credit toward the CIPS, CRS, and PMN designations
- Three hours of fair housing (civil rights) continuing education credit
- NAR At Home with Diversity certification
The Somali population in Columbus
In Columbus Ohio, the fastest growing market is the Somali population. Currently, there are approximately 35,000 Somalis living in our area. Although Minneapolis/St. Paul has the largest Somali population in the country, sources suggest that Columbus will surpass the twin cities by the end of 2006.
Somalia, also called the Somali Democratic Republic, is located on the Horn of Africa, the easternmost part of the African continent. The total area is 637,657 sq km, and the capital is Mogadishu. The estimated population is 7,488,773.
Thousands of Somalis have migrated tothe United States to escape the turmoil, factional fighting and anarchy which has plagued their country since a Siad Barre regime was ousted in 1991.
About 99% of Somalis are Sunni Muslims, the largest denomination of Islam. Islam is the fastest-growing religion in the United States, with an estimated 5 million to 10 million adherents. Its tenets strictly ban interest. Instead, lenders are supposed to invest in their clients' ventures and share in the profit or loss. For observant Muslims in the United States, the ban on interest makes it tough to buy a car and almost impossible to buy a house.
Another significant detail is that the average Somali family is 7-8 people which also poses a problem with rental housing.
The CBR has joined with several other industry groups to address the unique housing needs of our growing Somali population. Although this group is only in its early stage at press time, its intent is to offer a housing forum on the subject this summer. Your In Contract will carry a more thorough article about Somalis and their culture as well as details of the housing forum when confirmed.
Multicultural markets fuel new homeownership opportunities
By Cindy Flaherty, Director of Fannie Mae's Central and Southern Ohio Community Business Center
REALTORS® are an important link to achieving homeownership for many Americans, especially for first-time home buyers and minority families. Despite the many barriers that exist for underserved markets, new home buyers are knocking at the door and are determined to achieve the dream of homeownership.
Many minority families and new Americans realize early on that homeownership is by far the most powerful way to establish themselves financially, strengthen their roots in their communities, and build equity wealth for their families for generations. The challenge they face is how to make it an affordable reality.
We believe the number one issue facing the housing finance industry today is affordability. We need to make sure working families can afford a home and can finance it safely, which means at the lowest possible risk.
Longer-term, the industry faces a centralchallenge stemming from changing demographics: How can we house a growing population, with much of the growth coming from immigration and multicultural markets?
Where the Growth Is
While the overall homeownership rate in the United States hovers at an all-time high of 69 percent, and the rate for white families is 75 percent, currently only 51 percent of minority families own a home. This homeownership gap is also prevalent in the Columbus MSA and presents a compelling opportunity for REALTORS® to increase their business. Locally, 64 percent of white families own a home, while only 41 percent of African Americans and 30 percent of Hispanics are homeowners.
Nationally, minorities are the fastest-growing segment of our nation's population. In the next decade, the U.S. is expected to add 30 million new people, creating 13 to 15 million new households. Minority families will represent 80 percent of this population growth. By 2010, minorities will account for two-thirds of growth in the number of households and one-third of our country's population, according to the Harvard University Joint Center for Housing Studies.
By the end of 2010, minorities will comprise more than 45 percent of first-time home buyers. This population surge in the mostly underserved, ethnic markets presents a great opportunity for REALTORS® to reach a new client base.
African-American, Hispanic, Asian American Populations
While the overall population of Columbus, Ohio declined between 2002 and 2004, the minority community was growing. Consider these interesting Census facts:
- In number, the African-American community grew the most, by 22,837 people, between 2002 and 2004.
- The Hispanic community grew the fastest, by 26 percent, between 2002 and 2004.
The minority markets also represent a younger demographic nationally and in the Columbus MSA. For example, nationally Hispanic consumers are on average more than 10 years younger than white consumers -- 26 years old compared to 40 years old. Locally, the age gap is smaller but skews younger, with the average age for white Ohioans in Columbus at 34, Hispanics at 26, African Americans at 29, and Asian Americans at 31 years of age.
By reaching younger home buyers through creative marketing outreach at colleges and universities and to professional organizations, among other channels, REALTORS® could have the potential to provide repeat service for a longer period of time - from the starter home through retirement.
And let's not ignore the tremendous growth opportunity that single women represent for REALTORS® and the lending community, particularly in the African-American community. Because a growing number of women are now choosing to delay marriage longer, single female heads of household have become a viable market segment to watch.
More than any other demographic, single African American female-headed households represent the greatest opportunity. Let's briefly examine this. Nationally, this segment has the largest renter base, with 56 percent of all African-American renters being single females, according to U.S. Census data. The Columbus MSA is a mirror image, with 57 percent of all African American renters being single females.
Reaching Out to New Immigrants
When REALTORS® are armed with the latest information on the home buying process, it gives broader access to minority families and creates new business opportunities for the REALTORS® who are trusted advisors in these communities. In addition, by helping new immigrant households now - explaining the homebuying process in-language, understanding how credit works for them and against them, and increasing their financial literacy - it is more likely that homeownership will be successful for this surging market and easier for their children in the future.
Here are some of the most commonly identified barriers to homeownership for immigrants:
- Affordability
- Lack of funds for down payments and closing costs
- Lack of traditional credit history
- Blemished credit
- Outstanding collections on debt
- Unbanked
- Nontraditional income sources
Many lenders offer alternatives that can help overcome these barriers. For example, lenders can build an alternate credit history for potential immigrant homeowner by documenting the payment of rent or utilities. They can also accept nontraditional income sources, such as boarder income from relatives or nonrelatives, and public benefits such as Social Security Disability income or Section 8 homeownership vouchers. Families who do not have banking experience might be allowed to submit cash-on-hand for down payment and closing costs. Ask your lender about these types of alternatives.
Most lenders require that home buyers be lawful residents of the U.S., but there are many different types of legal status, including a refugee, permanent resident visa or a work visa (for professionals or seasonal workers). Many families who are not necessarily citizens, but have legal status, just don't realize they can by a home. Again, ask your lender.
Achieving Affordable Homeownership
In any discussion about marketing outreach to first-time home buyers, the challenge of affordability becomes paramount. We are concerned about affordability for three major reasons:
1. Housing costs are going up. Rising home prices are good for people who already own homes,
but tough for those trying to buy their first. Nationally, affordability has fallen to the lowest level
since 1991, primarily because of the sharp rise in home prices in recent years. While home
prices locally have risen less than the national average, affordability remains a key concern.
2. Home buyers are taking more risk. To deal with high prices, and get into a home before prices
rise even higher, many first-time home buyers are taking on riskier mortgages _ such as Interest
Only and Adjustable Rate Mortgages with negative amortization _ that may have the lowest
monthly payments, but also have a greater risk of payment shock a year or two later.
3. Overextended borrowers could lead to higher defaults and foreclosures, and result in the
American Dream unrealized or deferred for many families.
How can the housing industry help borrowers avoid selecting products that may cause them to overextend themselves? What part can REALTORS® play? There are three areas where Fannie Mae and REALTORS®, working together with lenders and the rest of the housing industry, could make a difference:
Careful Lending:
REALTORS® and lenders can help borrowers fully understand the risks associated with various loan options, especially nontraditional mortgages such as Interest Only and negative-amortization ARM mortgages. Borrowers might then be better able to determine whether they can weather the risks associated with these features.
Affordable Mortgage Options:
We need to provide affordable mortgage options which make sense for low- to moderate-income borrowers with limited funds for down payment and closing costs, and those needing extra flexibilities on credit and income sources.
Encourage Consumer Education and Counseling:
We need to educate buyers about the responsibilities of homeownership and counsel them about high-risk products. And we need to do this in simple terms that consumers can easily understand and sometime that means putting in another language.
Since REALTORS® are often the first point of contact for a home buyer, they can help debunk many of the home buying myths that are prevalent in multicultural markets, and provide a safe hand-off to a reputable lender who will present the home buyer with affordable options. With sensitivity to these needs, REALTORS® can help home buyers avoid high-cost subprime loans and help to prevent payment shock or foreclosure later on.
REALTORS® are an important link to achieving homeownership for many Americans, especially minority families. Despite the many barriers that exist for underserved markets, new home buyers are knocking at the door and are determined to achieve the dream of homeownership.
FHA ads to educate minorities on home buying
The Department of Housing and Urban Development's Federal Housing Administration (FHA) has launched a public education campaign directed at first-time minority home buyers.
The bilingual radio and newspaper-based campaign will run in 16 markets (including Columbus Ohio) targeting African American and Hispanic American communities. In addition, articles and editorials will be placed to help address barriers that minorities have faced on the road to homeownership.
The objective of the radio/outreach campaign is to acquaint first time minority homebuyers, of low to moderate income, with the quality and affordability of the FHA brand. The campaign also focuses on the dangers of predatory lending and the protective nature of FHA products.
Selecting a neighborhood
Personal contacts and exploring neighborhoods are the most common ways people learn about specific neighborhoods. But the Center study reveals some differences among ethnic homebuyers. For example, blacks are much more likely than other groups to learn about neighborhoods by driving through them. Asian buyers are more likely to use real estate information sources. Whites are more likely to use a variety of sources ? real estate promotional materials, driving through neighborhoods and personal contacts. Hispanics rely significantly on friends, family and work associates for neighborhood information.
According to the 2004 American Community Survey (ACS) sponsored by the National Association of REALTORS® and Smart Growth America, a 45-minute-or-less commute is the leading factor in deciding where to live for 79 percent of Americans. Sidewalks and other places to walk are priorities for 72 percent.
Minorities and women are even more likely than other Americans to choose a walkable neighborhood. Fifty-nine percent of women, 57 percent of Hispanics and 78 percent of African-Americans selected close-in neighborhoods over communities with bigger lots and longer commutes.
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