Section Two: Barriers to Home Ownership

Identifying the experience of American Indians.

Theme One: Economic Barriers
Theme Two: Social Barriers
Theme Three: Programmatic Barriers

Theme One: Economic Barriers

Low and moderate income American Indians face similar economic barriers to home ownership as members from other communities of color and low income whites. These barriers include obtaining enough money for a down payment, establishing good credit, earning a decent wage or income to support a mortgage, and locating housing that is affordable and in good condition.

However, one participant offered an example of a low income family's potential for home ownership which demonstrates that a variety of situations can fit into the mold of home ownership.

"I work with client base of 70 - 100 people. From that group, I've only come across one family that would consider purchasing a home, and this was from an economic view point. She was a renter with 5 or 6 children and had good disposable income base. I actually talked her into looking at home ownership. With the number of children in her home and being a foster parent, she would have more freedoms than she'd have as a renter. There are more restrictions in rentals."

Several other points were raised in defining the economic barriers to home ownership.

"Wages needed to buy homes are sorely lacking."

"Is there an issue of single parenthood here? Does the singleness make a difference? It is a lot easier for a two income household to buy house."

"There are not a lot of good housing choices for low income families."

At another Indian organization, one participant stated, "We've served clients for 10 years and less than 2 percent have owned a home. There are a number of things, like chemical dependency, which lead to discrimination. This is an important part to look at."

Income Comparisons Between American Indians and the Broader Community

If the level of income, or lack of income, can determine the desire or ability to obtain home ownership, what are the incomes of American Indians within the Twin City metro area, or even the state of Minnesota? How does this compare with the incomes of the total population?

The following table provides the number of households falling under each income category. These Census figures are for the entire state of Minnesota. Informal conversations with professionals in the mortgage lending industry and affordable housing providers convey that an annual income of roughly $20,000 on average is needed in order to buy a modestly priced home in the conventional mortgage lending market. State and local housing programs may be able to serve families and individuals with lower annual incomes depending upon the situation.

Income Comparisons
Income Level	# Households 1990 Census	# Households 1980 Census	1990 Percentage	1980 Percentage
American Indians
Income <$35,000	11,290	9,121	79.90%	95.10%
Income <$25,000	9,607	8,247	68.00%	86.00%
Income <$15,000	6,917	6,195	49.00%	64.60%
White
Income <$35,000	882,823	1,219,932	55.80%	86.60%
Income <$25,000	618,009	974,971	39.10%	69.20%
Income <$15,000	341,335	583,331	21.60%	41.40%
Total Population
Income <$35,000	932,155	1,255,338	56.50%	86.70%
Income <$25,000	658,426	1,005,569	39.90%	69.50%
Income <$15,000	369,292	605,498	22.40%	41.80%

Data: U.S. Census Bureau, Minnesota State Planning, Office of State demographer, September, 1994.

The above Income Comparisons table shows that in 1990, approximately 7,000 American Indian households with incomes below $15,000 would have a difficult time accessing home ownership in the conventional lending market. This is almost half of all American Indian households in the state. Programs, like the Minnesota Housing Finance Agency's Tribal Indian Housing and Urban Indian Housing programs, can assist some of these households. (See the section on Housing Programs for further information on these programs.)

The figures for median incomes disclose that half of the population have incomes less than the median and half possess incomes higher than the median. The median income for the American Indian, white, and total populations across the state are shown in the table at right. Note: the figures for 1980 are adjusted for 1989 dollars.

Figures from the 1990 Census also disclose the median cost of a home mortgage in the state of Minnesota. This median cost is $724. The mortgage ranges for minority groups are from a low of $523 for American Indians to a high of $868 for Asians. (MN Office of State Demographer, 1994) These figures can provide a glimpse of the home ownership experience facing American Indians, however, these mortgage figures are aggregated across the entire state. Similar figures solely for the Twin Cities metro area are expected to be much higher.

Theme Two: Social Barriers

In addition to economic barriers, participants at the various roundtable discussions described social barriers that Indian people are facing while attempting to obtain and maintain housing. As noted above, family structure and the struggles with providing for housing needs as a single parent family may be one example of a "social" barrier. Families may also be working very hard to keep together or to provide for extended family members either in the urban area or on the reservation. The lack of family or community resources may influence the ability of American Indians to move into home ownership. For example, one participant offered:

"Parenting skills may need to be examined. Often times, kids get families evicted; There is a need for self-sufficiency, chemical recovery, building partnerships with organizations that do educational activities."

Type of Household	1990 Median Income	1980 Median Income
American Indian	$15,434	$10,860
White	$31,322	$17,910
Total Households	$30,909	$17,761

Data: U.S. Census Bureau, Minnesota State Planning, Office of State Demographer. September, 1994.

Another important barrier for some families and individuals is the problem of chemical dependency. While the roundtable discussions did not focus specifically on the issue of chemical dependency, several participants acknowledged that it remains to be a crucial piece in obtaining and maintaining housing regardless if it is housing that is personally owned or rented. In discussions surrounding this issue, there was significant support for combining housing opportunities with treatment opportunities.

Theme Three: Programmatic Barriers

There may also be rules, regulations, and or eligibility requirements that create barriers for American Indians to utilize housing and other home ownership programs. Various roundtable participants acknowledged some of these programmatic barriers.

"Often home ownership programs make it easier for single moms than working poor couples to become eligible."

"The Urban Indian Housing program is very good. The money doesn't depend on tribal affiliation and this makes it very flexible. However, the money has stayed the same since its inception."

Next Section

The Well-Being of American Indian Children in Minnesota: Economic Conditions, 1994