The Institute of Public Affairs at the University of Minnesota posted a report on March 18 analyzing the characteristics of individuals facing foreclosure in Minneapolis and found that the majority of foreclosures in Minneapolis involved renter households. The study also found that among families with children in the public schools, African-American and Hispanic households were disproportionately represented in foreclosures, families with school-age children made up approximately 40% of foreclosures, and that households where a language other than English was spoken at home were underrepresented among foreclosures.
In order to garner information on racial characteristics and foreign-born status, the report used data from a combination of sources including Sheriff’s Sales, the Hennepin County Assessor’s Office, and administrative data from the Minneapolis public school system. The study then used the American Community Survey as a benchmark to see if certain characteristics are over- or underrepresented. The study matched foreclosed addresses to addresses where a child is enrolled in the public school system to capture demographic statistics on the family; the address was then matched to Assessor data in order to find whether the household had received a “homestead exemption” for being owner-occupied. Non-homesteaded properties were assumed to be rental properties. Since race and language information came from schools data, the findings are limited to households with at least one child enrolled in public school.
The study finds that foreclosed properties in Minneapolis between 2006 and 2007 were disproportionably non-homesteaded properties, and by proxy, renters were facing higher rates of foreclosure that were nearly three times higher than home-owners. The study also finds that among public school families, black and Hispanic households bore the brunt of foreclosures, with 63% and 18% of foreclosed households being black and Hispanic, respectively. These figures are much higher than the overall racial breakdown of Minneapolis where blacks only account for 35% of households with school-age children and Hispanics account for 9%. Furthermore, approximately 40% of foreclosed properties had at least one school-age child, in comparison to 16.5% of all Minneapolis’ households. Finally the study finds that over 75% of the households with children in the Minneapolis public schools facing foreclosure spoke English at home.
Recommendations of this study focus, therefore, on renters. While Minnesota renters have the legal right to live in the foreclosed property for 6 months after sale, anecdotal evidence suggests that they do not receive adequate notice, leaving them little time to find housing. Increased services need to be made available to renters such as relocation services and expanding foreclosure prevention and financial literacy programs to the non-English speaking populations. Despite the results which show that foreign-born households are less likely to experience foreclosure, expanded programs for non-English speakers is important due to fewer established social networks and a weaker understanding of local residential real estate markets which can make finding alternative housing challenging.
The report, The Unraveling of the American Dream: Foreclosures in the Immigrant Community of Minneapolis by Ryan Allen can be found here: http://www.hhh.umn.edu/people/rallen/pdf/unravelingamericandream.pdf.